Brief Fact Summary. A promotion at a casino allowed contestants to spin a wheel in an attempt to win $1 million dollars. An individual spun the wheel and a dispute arose as to whether the individual won the $1 million dollars.
Synopsis of Rule of Law. "[M]inimal detriment to a participant in a promotional contest is sufficient consideration for a valid contract."
In a diversity action, the choice of law rules of the forum state determine which state's law will be applied.View Full Point of Law
Issue. Does adequate consideration exist when a person participates in a promotion?
Held. Under both New Jersey and Pennsylvania law, adequate consideration is a prerequisite for an enforceable contract. Consideration is defined as a "bargained for exchange, and it may take the form of either a detriment to the promisee or a benefit to the promisor." Something of value must pass from the "player to the casino." The court relied on [Lucky Calendar Co. v. Cohen] a New Jersey Supreme Court case concerning a lottery type advertising campaign, in which contestants were required to fill out a coupon and deposit it in a box in hopes of winning a prize. The [Lucky] court observed: "[T]he consideration in a lottery, as in any form of simple contract, need not be money or the promise of money. Nor need it be of intrinsic value; 'a rose, a hawk or a peppercorn' will suffice, provided it is what is asked for by the promisor and is not illegal …. Whether a 'peppercorn' or the filling in and delivering of a coupon is sufficient consideration for a promise depends only on whether it was the requested detriment to the promisee induced by the promise. That is consideration which is regarded as such by the parties." The [Lucky] court further observed, " '[c]ompleting the coupon and arranging for the deposit of it in the box' at the store was the detriment to the promisee, and the 'increase in volume of business' was the benefit to the promisor and its customer, the owner of the Acme stores." The court also relied on a Pennsylvania case, [Cobaugh v. Klick-Lewis, Inc.], which held that in the context of a promotion where shooting a hole in one could lead to winning a free car, "the promisor benefitted from the publicity of the promotional advertising, and the golfer performed an act that he was under no legal obligation to perform." Here, the casino "offered the promotion in order to generate patronage of and excitement within the casino" and was by no means altruistic. Also, the Plaintiff suffered various detriments. As such, the Plaintiff "provided adequate consideration to form a contract with Tropicana.
Discussion. This case offers a good illustration of the purpose of consideration, and how it is applied to contests and other games of chance.