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Acme Co is putting together a big promotional mashup for something that's internal to the company, but they need images from outside that help illustrate the theme. So they hold a photography contest on that theme. They say they will award seven top prizes of $7K each, but there's a $100 entry fee (plus rights to use of the entered photo) to encourage pre-filtering. One person can enter up to twice, each with a separate fee. Winners are supposed to be selected based purely on skill, not on luck. There are no geographic restrictions on eligibility. Judges' decisions are final.

The contest gets run and the time comes for announcing the winners. Acme says "Hi all, thanks much for your entries. We got 50 good entries that we plan to use in our mash-up, and we're pleased to announce four people who are our winners: Mike B., Janice D., Nannette C. and Mike B. again. Congratulations to them and thanks everybody for entering!"

There are three people who are winners, which is less than both four and seven, and both of those are in turn well under 50. Acme Co saves a bunch of money by not awarding the other prizes. In practice, none of the other entrants can individually do anything because they can't prove they would have won, and it would be an even more expensive failure to get to that point. (Is that true?)

Has Acme Co. found a way to save money that is safe under the law in practice? If not, why not? What are the real risks? How and when can this strategy break down?

What would any of the non-winning entrants be able to do about this in practice?

CA, US is given as an example jurisdiction, but feel free to answer for others if you know others better.

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They say they will award seven top prizes

There are three people who are winners

Acne lied about how many winners there would be and the fact that there were proposed to be more than there were may have induced people to enter.

Well, that looks like sufficient evidence to prove the tort of misrepresentation right there.

I'll run the class action on a contingency basis.

  • Would a few dozen good entries be enough to satisfy the numerosity requirements for class certification? – WBT Aug 1 '17 at 14:08
  • Also, who would have standing, since no individual entrant could prove they specifically were damaged by the misrepresentation? – WBT Aug 1 '17 at 15:53
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    Everyone who paid $100 and invested time was damaged – Dale M Aug 1 '17 at 19:56
  • Acme's going to argue they would have sunk that cost if they weren't the winners, regardless of how many other people were chosen. (Are there any relevant precedents?) – WBT Aug 2 '17 at 3:35
  • @DaleM Slight nitpick, Acne didn't lie about how many winners there would be, they lied about how many prizes there would be. If there were four winners, three of whom got double prizes, then the correct number of prizes was awarded ; alternatively, if there was no limit on the number of entries, it is conceivable that the best 7 entries are all submitted by the same 3 people. Otherwise +1. – sharur Feb 14 '18 at 20:14

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