$50,000 Lesson in Contract Law
A. James Cuticchia, PhD, JD (Aug 19, 2011)
Much has been said about a hockey event which occurred on August 11, 2011. However, it is not the game that was exceptional, rather a raffle. The father of Nick and Nate Smith purchased three tickets for a raffle at a celebrity hockey game in Minnesota. The father put each of their names on separate tickets.
Nick Smith was the lucky winner of the raffle, which gave him a chance to shoot a hockey puck through a 3 ½ inch hole to win a $50,000 cash prize. Unfortunately, Nick had left the arena. Before doing so, he told his brother Nate to take the shot for him if he won the raffle. Nate did just that and against all odds, WON!
The controversy began when Pat Smith, the father of the boys, came forward and admitted it was not Nick who took the shot. The question which is under consideration is whether the insurance company responsible for providing the prize should pay up.
While the actual terms and conditions of the raffle are yet to be made public, there is case law addressing, in part, this very problem. In 1927 the Supreme Court of Wisconsin in the case of Matta v. Katsoulas (212 N.W. 261, Wis. 1927) held that a person handing her lottery ticket to another did not transfer the prize, but rather made that person a bailee (someone to hold for her behalf). In that case Hilda Matta had to leave an event where each person received a raffle ticket, and asked Christ Katsoulas to take her ticket and let her know if she won the prize. The ticket was drawn and the people in charge of the contest spelled out the name of the woman who won the prize, an automobile. Mr. Katsoulas presented the ticket and was given a voucher to take to a garage and retrieve the automobile. When Ms. Matta heard that her ticket was drawn, she demanded that Mr. Katsoulas surrender the automobile to her. He did not.
The court held that a contract had been made between Matta and Katsoulas. When Ms. Matta asked Mr. Katsoulas to take her ticket and tell her if she won and Mr. Katsoulas took the ticket a contract was made. The court found that in this situation the law implied an agreement that Mr. Katsoulas would return to her the car if her ticket was chosen.
In this case, it could be argued that a contract was created between Nick and Nate Smith when Nick asked Nate to take the shot at the hockey game if his (Nick’s) name were drawn. At its most simple foundation, Nate agreed to take the shot FOR Nick. Thus, Nick might have a case against his brother to turn over the money to him!
One question to be addressed is whether Nate stepped into Nick’s shoes and performed the hockey shot for him. If he did, then the $50,000 would be Nick’s under a theory that Nate was an agent for Nick. If so, the next question is whether an agent for the person whose name is drawn in the raffle has the authority to act for that person. This will come down to rules of the contest, which to date have not been made available.
These rules would have to been in force at the time of the contest and available to contestants. The sponsors cannot make up any rules retroactively.
If it comes down to a court battle, it will likely be the rules which will govern this situation. The court will likely hold that a contract was created when the $30 was given to the sponsor and each of the Smiths placed their names on the tickets. But were the tickets transferable?
In cases where raffle tickets just have a number printed on them and are surrendered for the prize, it might be construed that in the absence of any rules laid out the contestants, that the ticket would be transferable – and it would be up to the transferor to make any agreements with the transferee regarding what would happen in the event that the ticket was chosen.
In this case, it was not a ticket number which was called; rather it was a specific name. Much like in the above example, it will still come down to the rules of the contest. Actually, it will ultimately be the Golden Rule which prevails. The sponsor with the Gold must abide by its Rules.
Problem you have here...they are both kids, which, in the US, makes it impossible for them to enter into any form of legally binding contract.
Posted by: Hellscream | 08/19/2011 at 04:12 PM
You are correct! It would be interesting to see if the insurance company could use that in an argument.
Posted by: LawyerScientist | 08/19/2011 at 04:37 PM
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