Farm Giveaway Is a First for Web, But Is It Legal?

Rohit Khare (
Sun, 15 Sep 96 01:43:12 -0400

September 14, 1996

Farm Giveaway Is a First for Web, But Is It Legal?


Hoping to circumvent real estate agents and other hassles involved in selling
a home, Joseph A. Sortet of Linden, Tenn., has borrowed an idea from others
who have offered their houses as prizes in fee-to-enter contests publicized in
magazines or newspapers. Last month, he posted a Web site inviting interested
readers to try to win his farm in rural Perry County.

Many agree that his novel site is an Internet first. But another issue is
murkier: whether the contest passes legal muster in the brave new world of Web

Contestants are being asked to submit $20 and an essay, either satirical or
serious, on why Bill Clinton should be re-elected President of the United
States. If he receives at least 5,000 responses, which would cover the cost of
the home and transaction fees, Sortet plans to reward the author of the best
essay with the home -- "a fisherman's paradise, a hunter's paradise" -- where
he has lived with his wife and three children for four years.

"My wife and I tried to sell our farm through conventional means and we got
fed up with the real estate mumbo-jumbo," Sortet, a 41-year-old organic
farmer, who also works for a contractor in Nashville, said recently. "I saw an
article in a magazine about writing an essay to sell a farm, and I said 'I'd
like to do that on the Internet.' "

Sortet believes that his house contest marks a first for the Internet and he
may be right. Donna L. Hoffman, associate professor of management at
Vanderbilt University and an expert on electronic commerce, says she knows of
no one else who has tried this kind of cyber-giveaway before.

)Sortet said he launched his site without giving a thought to whether the law
might place any restrictions on it, because he assumed that commerce on the
Internet was unregulated. "I didn't think there was anything in the Internet
that I had to get approval of," he said.

But there are those who argue that the Web does not free a contest sponsor
from adhering to contest regulations in the state in which it is sponsored --
or anywhere else it is advertised on the global network. After an inquiry from
a reporter this week, Mark S. Williams, the director of the Tennessee
Division of Consumer Affairs, said he was going to look into the contest to
find out more about it.

In Tennessee, Williams explained, raffle-type contests are generally banned,
unless they involve skill. Essay writing might qualify as a skill, if the
judge of the contest has expertise in the field related to the subject, he

The problem is that it is unclear who will judge the Sortet contest.

Sortet planned to select the final winner from a group of semi-finalists
chosen with the help of Perry County Sheriff Thomas Ward. Ward could arguably
qualify as an expert, Williams allowed. But Ward said this week that he knew
little about Sortet or the contest and did not wish to participate.

He said Sortet may have posted his name on the Web site, saying he would be a
judge, as the result of misunderstanding. Ward said he had agreed to Sortet's
request that the sheriff confirm the existence of the house, should his
office receive inquiries about the contest. For his part, Sortet said this
week that he thought Ward had agreed to help with the judging as well.

)Tennessee's rules might not be the only ones that apply. Lawyers caution
that contest regulation is not suspended merely because a contest is
publicized in cyberspace rather than a newspaper or magazine. Jonathan
Rosenoer, a California lawyer and author of a soon-to-be-published book on the
law of the Internet, said contests are governed by many types of state and
federal laws -- from disclosure to registration requirements -- and that these
statutes apply to virtual contests as well.

"Just because it's the Internet doesn't mean you can ignore the legal
liabilities and risk factors that you would otherwise have to attend to in
non-Internet life," Rosenoer said. "And you need to recognize that once you
are on the Internet, you open yourself up not just to local and state laws in
which you reside, but you make yourself subject to foreign laws as well."

Sortet said that if he were to discover that his contest did not conform to
the law, he would try to change the contest to make sure it was in compliance.
Should that prove too expensive, he said he would exclude from participation
residents of states where his contest raises legal questions.

Despite the complications, some say that Sortet may be on to something with
his contest.

"It's a wonderful idea," said Hoffman, the Vanderbilt professor. House
giveaway competitions are "a natural" for the Web, she said, "because it's a
much bigger market."

"This way, you have the potential to reach millions of people, if you know
what you are doing," Hoffman said.

The key word is "potential." As of August 1995, the World Wide Web was used
by about 11.5 million people in the United States age 16 or older and has
grown in popularity considerably since, according to Hoffman. But attracting
all those surfers to one's site is no easy matter. "The trick is to target
people who want to live in that area or own a farm or both," she said.

So far, Sortet said this week, he has received many inquiries about the
contest, but no envelopes with cash. He hopes this will change once word of
the site spreads. His fantasy is to get many more than 5,000 contestants.

"I went on the Internet because of the potential of the all the people that
could possibly respond to it," he said.

Related Sites

* _Joseph A. Sortet's Linden, Tenn., farm contest_

* _Project 2000 Vanderbilt U. research project on electronic commerce_

* _Rosenoer's Cyberlaw site_