Sweepstakes Checklist:

Be sure no purchase is necessary—do not require participants to pay a fee to enter the sweepstakes. Do not require participants to purchase a product to enter the sweepstakes. Allow an alternate, free entry method.
Be aware of, and comply with, the most restrictive state law applicable to a multi-state sweepstakes. If required, register your sweepstakes with the applicable state agency. If required, pay any fee or post any bond that an applicable state agency might require. Consider restricting eligibility to less than all states, if that strategy is consistent with your business purpose.
Be clear and precise with sweepstakes rules. Problems with sweepstakes frequently arise from ambiguities in the sweepstakes rules. Any ambiguities will be construed against the sweepstakes promoter and in favor of the participant. Have multiple readers (including legal counsel) review the rules for clarity and precision.
Avoid turning a sweepstakes into a contest. Chance—not the participant's skill—should determine whether a participant wins a prize.
Award all sweepstakes prizes. If you do not plan to award all prizes, the rules of the sweepstakes should state that "unclaimed prizes will not be awarded."
Do not make any misleading or deceptive statements about the sweepstakes, its rules, conditions, or prizes.
Prepare, keep and retain records of the sweepstakes rules and sweepstakes award protocol, and disseminate a winners' list.
Consider retaining legal counsel to review the sweepstakes rules.

Stephen E. Story is chairman of the Franchise Practice Group at Kaufman & Canoles in Hampton Roads, Va. He can be reached at (757) 624-3257 or sestory@kaufcan.com.

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