Protect Yourself Before You Start a Contest - Part 6 of An Aud Life dot Com

Written by John Cow on August 22nd, 2008

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First of all I have to come right out and say that I am not a legal professional and any advice I give is not to be construed as anything other then my personal opinion.

Holding a contest can be very fun, it can get you good exposure and is a great way to interact with your readers… the problem is you can also get into a lot of trouble if you are not careful.

A lot of people do not realize how much at risk they are when it comes to their online business and if there are certain things that are not already in place, then holding any type of contest or giveaway can add fuel to a potentially HUGE fire.

Before you even consider announcing your contest, you want to make sure that you have a proper…

  • privacy policy
  • terms of use

…and if you do any ecommerce transactions (such as sell sponsor ads), then a…

  • purchase agreement

Now I realize that some of you might not understand the need for this, after all…

Its Just My Little Blog!

Well I think you would be incredibly surprised to find out what seaming ‘harmless’ and often ’stupid’ little things have got people into HUGE trouble, simply because they did not have a clear privacy policy or terms of use. The way I look at it is why even play with the chance of this happening, take the time and make sure you protect yourself.

TIP –> I also highly recommend, if you have not already done so, that you incorporate your business. In the USA, the state of Nevada is very affordable to get incorporated in and they do not charge any state income tax. The cool thing is you do not even have to be a resident of the USA to do this in Nevada and the tax benefits PLUS the protection it provides is huge. This however is an entire different series of posts to get into.

A good example of how the documents can protect you is with minors. If you offer products, services or contests and someone under the age of 18 years of age participates this can be a potential legal nightmare, especially if you ask for any personal information. This is why on JohnCow I state very clear in the contest rules and it is stated in the privacy policy that anyone below the age of 18 is not permitted.

URGENT –> If your site targets anyone under the age of 18 you will want to understand very clearly the “Children’s Online Privacy Act (COPA)” and consult with a lawyer.

For any of you nay-sayer’s that think I am full of crap or too worried, all I can say is.. I Do Not Care!

It is your business… it is your blog…. it is your life. If you want to risk running a business and a contest without protecting yourself, its your decision… but I think it would be nuts.

NOTE –> These documents do not give you the right to make up rules that cheat or scam people. They are in place to protect you and your business, not to take advantage of others. I am sure I do not need to mention this but you never know.

Another important point is do not just copy and steal someone else’s documents from their site, for example here on JohnCow our documents are purchased through ‘Internet Law Compliance‘ and they are copyright protected. If you want to get the forms for free then there are free options available and if you type in “free privacy policy template” or “free terms of use template” you will find lots of options. Be careful with these though, if you are getting serious with your business, you will really want to consider doing this right. The nice thing about using ‘Internet Law Compliance‘ is they also have a lot of training material they provide you that is very eye opening.

So now I have a question for you… is your blog or web site protected?

In the next post I am going to cover setting up the rules of the contest and then we should be able to launch it at http://www.anaudlife.com!

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    34 Comments »

    Comment by Ryan McLean
    2008-08-22 22:09:28

    Wow, great tips

    I just started running a contest on my ‘little’ blog and this has been a great post to get my ass into gear when it comes to legal stuff. I never even considered it. More on this topic would be awesome

     
     
    2008-08-23 09:54:56

    Yes, you should plan well before starting a contest. A contest can either bring you down or bring you up. Anyway, i am searching for blog templates for now since my current site is damn bad.. :(

    Money Making and Blogging Tipss last blog post..Blog Optimize | Google Keyword Tools: Adwords

     
    Comment by Barbara Baker
    2008-08-23 12:03:52

    Thanks so much for the great information…I will definitely have to work on this for my site. I am new to much of this and it is great to come here and learn things that I otherwise would have gone a long time without knowing.

    Thanks Barbara

    Barbara Bakers last blog post..Free for all…add your giveaway, contest or sweepstake!!

     
    Comment by Get Your Green On
    2008-08-23 14:43:43

    Good point about the privacy policy. These things are very important.

    Get Your Green Ons last blog post..Free Gas Card - I did this and it worked. Lovin it!

     
    Comment by Suite J
    2008-08-23 19:13:26

    Awesome! Very important points, especially regarding copying policies from others. Besides being copyrighted, their custom policy may not actually legally apply or be relevant to your business. This could be true simply from a very small section in the policy that you may have overlooked in your attempt to copy/paste quickly. :)

    I’m loving this series. Very valuable. Thanks.

    Cheers!

    Jay

    Suite Js last blog post..Flippin’ Fridays: How To Avoid Being Scammed By Fraudulent Buyers

     
    Comment by Sarv007
    2008-08-24 03:06:55

    hey john !

    can u also tell us that how to make “terms and condition page” for our blogs..

    what to include in it?

    what to say in it?

    what restrictions ?

    pls tell us a quick way………….

    Yours reader

    sarv007

    Sarv007s last blog post..best free General Utilities-Other Applications

     
    Comment by Mon-Mon.com
    2008-08-24 09:18:18

    Never knew you have to protect yourself like that. It seems so business-y when it’s just an innocent blog contest, lol.

    Mon-Mon.coms last blog post..Text-Link-Ads - Can You Say Easy Money?

     
    Comment by WAHM Tara
    2008-08-24 17:37:20

    Thank you for this contest information. I have been planning doing a contest on my blog for some time. I do have a privacy policy on the blog but do not have a terms of use.

    WAHM Taras last blog post..John Cow Win Big Contest

     
    Comment by zim
    2008-08-24 21:04:26

    I don’t see a huge advantage in incorporating in another state.

    For example, if you incorporate in another state, you still have to have YOUR state recognize that corporation. After all, ultimately you still conduct business in your state and reside there. Having your out of state corporation recognized involves paying the proper fees, etc. to your own state, and as far as I know, you still must pay tax to your state.

    It would be interesting if anyone could elaborate on what the real advantages might be to do this (I think privacy protection, ease of partnerships, etc.) might be the real advantages, if that is important to someone.

    Comment by John Cow
    2008-08-24 22:37:32

    Actually you do not need to live in neveda and there is a bunch of other things that are different with that state and the corporate law but I meant more for the non US citizens, Neveda is great for non americans to create US corportations. I did it back in 1998.

    The main point of it all is get incorporated… it matters not where.

     
     
    Comment by Gus Subscribed to comments via email
    2008-08-25 08:01:18

    Thank God that I live in country where the law in internet doesnt start work in that way that I had road here :wink: But it only question of time, when the goverment will realized how much money people make over here… :grin:

    Guss last blog post..?????? ????????? ???????:

     
    Comment by Colin Klinkert
    2008-08-25 10:24:43

    I am about to setup a trust and use it for when i register companies. Good advice and nice post bringing this to everyones attention.

     
    Comment by revenue
    2008-08-25 12:28:48

    Well Untill now i don’t have any idea what topic i have to make a contest for my blogs, but i think we should make a contest, maybe later i will thanks :)

     
    Comment by SEO Diva
    2008-08-25 13:54:58

    Thanks for posting this information - I had never considered the legal implications of holding a contest.

    Instead of incorporating, I’ve been advised to get an LLC (limited liability company). Intuit has a small business section where they help you decide which you need, then you can incorporate or get an LLC for a reasonable price. This is the link: http://mycorporation.intuit.com

     
    Comment by Bradley P White Subscribed to comments via email
    2008-08-25 13:59:34

    Thanks for the tip on Internet Law Compliance. I purchased this after seeing you refrence it on your site. I had my Ohio attorney review it and make sure that it was in compliance with our state laws and my health care niche. The ILC product is very comprehensive and saved me hundreds of dollars in setting up my legal protection.

    Thanks,

    Bradley P.White

    http://www.supersizeyourhealth.com

     
    Comment by Peggie
    2008-08-25 14:50:09

    Wow! As a coach who works predominantly with women in service-based businesses, I spend a great deal of time discussing points like these — but D’oh! I wasn’t thinking at all this way when it came to my “little” blog! I appreciate the wake-up call! Keep up the great work!

     
    Comment by Amy
    2008-08-25 15:01:20

    Everyone seems to think that Nevada and Delaware are the best states in which to incorporate a business, but that’s generally not the case if you reside and conduct business outside of these states. For out-of-state businesses, Nevada is actually very expensive because of all of the fees, and Nevada corporations do not offer the same benefits for non-residents as they do for residents. In addition, if you file in NV and conduct business elsewhere, you still have to file as a “foreign corporation” in your home state, which results in more paperwork and more fees (and taxes). Although I am not an attorney and none of what I say should be considered legal advice, I have done extensive research on this topic, and I have found that in general, it’s best to incorporate (or form an LLC) in whatever state you conduct business.

     
    2008-08-25 16:51:05

    For $100, it’s worth it - saves you a lot of time & money if you were to get into trouble.

    As for incorporation, there are information from your State’s website (be sure it’s a .gov site) on how to get started. I incorporated my own in CA.

     
    Comment by grandmapeg Subscribed to comments via email
    2008-08-25 17:12:04

    Thanks for re-emphasizing the importance of staying out of trouble on a blog, and for suggesting a legal source for privacy and terms of service.

    Wow, just looked at your terms of service and discovered compensation was required. I declare that my time and effort of replying to your posts is a type of compensation to you.

    The terms of service would seem to preclude our referring to your site or even taking notes about the great advice you are giving (copying for personal use). Have a bit of mercy on those of us who have less than a photographic memory but would like to keep the spirit of the law. Will you reconsider the “personal use” and clarify that maybe you mean any personal use that would result in any distribution to any other person?

    Grandmapeg.wordpress.com

    grandmapegs last blog post..Cameras at weddings, garage sales

     
    Comment by Terry
    2008-08-25 19:25:40

    Here is a link to a Law Blog on the sujbect, you can download free for one website Terms Of Use and Privacy templates.

    http://mikeyounglaw.com/wp/

    Terrys last blog post..Wind-turbine-13, Note Card

     
    Comment by Kalpesh Ajugia Subscribed to comments via email
    2008-08-26 02:09:34

    Very informative post. This is really going to help the newbies looking to host a contest on their blogs. All bloggers definitely need to be aware of this to successfully run a contest competition etc and stay out of unwanted trouble.

    Kalpesh Ajugias last blog post..Crunch Now: Subscribe To Win $1000.00 Cash From Crunch Now

     
    Comment by Colin Klinkert
    2008-08-26 02:33:14

    Just ordered through your link Jason ;)

     
    2008-08-27 19:27:17

    Can’t wait for the follow up!

     
    Comment by Tom Subscribed to comments via email
    2008-08-28 10:56:27

    oh boy, contests need to be looked at from the state level as well. For example, in Ohio, a raffle is considered gambling. Gambling is against the law in Ohio. Also, I believe, it cannot be a game of chance and has to be open to all persons without purchase. Additionally, you cannot keep any of the money or goods, it all must be given away. There are exceptions for non profits though.

     
    Comment by Tom Subscribed to comments via email
    Comment by John Cow
    2008-08-28 11:08:18

    This is if you take money for the raffle but yes you need to be careful.

     
     
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