A woman buying french fries at a McDonald’s drive-through window received a game card which she thought was worth a million dollars. However, when she submitted the card to the McDonald’s redemption center, security codes revealed the card only entitled her to a relatively low dollar amount as a prize winner. Didn’t win. No problem—file a lawsuit: simply allege McDonald’s induced her to purchase the food item knowing that crooks were afoot trying to steal prize-winning game cards. That, she alleged, gave her worse odds to win the million dollars than those advertised. Therefore, she should be declared a winner of $1 million…are you actually following this logic?
But there is a happy (and, fortunately, rational) ending to this story. McDonald’s actually had “official rules” for its promotion. Those rules, among other things, had an arbitration clause which, if enforceable, would preclude her from bringing the lawsuit into court. So McDonald’s moved to dismiss the lawsuit. In addition to upholding the enforceability of the arbitration clause, this past August the U.S. Court of Appeals (7th Circuit) dismissed the woman’s argument that she could not be bound by a contract (the “official rules”) that she had never read, having gone through the drive-through window. The rules were posted near the food counter, the rules were on the reverse side of tray liners inside the restaurant, and were also posted near the drive-through window. Even the french fry containers which had the game cards attached to them mentioned that Official Rules governed participation in the game.
She was alerted that there were Official Rules, she had ample opportunity to read the Official Rules, the Official Rules were openly and conspicuously available for inspection, and it would be “unreasonable and unworkable” to require that each customer be afforded a personal reading of a lengthy set of game rules, and require each one read and then sign an agreement to be bound by their terms. Put that in your sesame seed bun for starters. A valid contract existed (and the customer is bound by the Official Rules—including the arbitration clause) because a contract does not have to be actually read to be enforceable. Here, the consumer knew and had every reason to know there were detailed rules that governed the promotion. The presence of Official Rules was clearly part of the game card promotion. The Official Rules were available and easily obtainable for inspection and review. To create a valid contract, it is enough that the Official Rules were identified to her as part of the contest and that she had an opportunity to read them.
Promotions such as sweepstakes and contests are regulated. States often have detailed regulations—some general and some targeted at categories of promotion (e.g., retail, online), others at particular industries, some relating to the target audience (e.g., children, senior citizens, cause-related charitable promotions), and yet others related to prizes (e.g., travel prizes, motor vehicles). There are regulations requiring registration and bonding in a few states (New York, Rhode Island and Florida in some circumstances), prize notification and disclosure statutes, and a variety of laws, regulations and judicial pronouncements on differentiating promotions involving chance versus those that involve skill and those that combine both—in stores, at county fairs and online. But by making sure you stay within the boundaries of the law and by ensuring your “Official Rules” are crafted and drafted properly, you can run successful promotions and withstand challenges like the one brought by our french fry purchaser in this case. Need help, call Rimon. Nobody does it better!
