Notice for Staff Room Wall (Offer) NATIONAL LOTTERY SYNDICATE : [WORKPLACE NAME] Since the National Lottery was launched in November 1994, it has been popular for groups to pool money together for the purchase of tickets for online draws. Not only is it more exciting playing in a group, but the more lines the group buys, the more entries they have in each game, and the more chances they have of winning (NL Website, 2006). We have decided to organise a syndicate at [Workplace], and hope that, as an employee of [Workplace], you will decide to join us in increasing your chances of winning a prize. Remember, even if our syndicate does not win, we contribute to good causes every time we play! Syndicates are often conducted informally but, since there is a potential for a large returns, it is essential that the rights and obligations of members of the syndicate, and of the organiser, are set out clearly in writing (EFP, 2003). Also of note, if there is no appropriate syndicate agreement in place, any of the prize monies distributed to other syndicate winners may be subject to inheritance tax. We have therefore drafted a suitable Agreement for [Workplace]’s syndicate. If, as an employee of [Workplace], you would like to participate in our syndicate, please review the provisions of our Syndicate Agreement in line with the Guidance Notes provided, and add your name and address to Schedule 1. Please then sign the Agreement in the presence of an independent witness (who should also give their name, address and signature), and return it to our Syndicate Manager, [Name]. These notes explain the Syndicate Agreement, setting out the meaning of each clause and the reasons why it has been included. If, after reading these notes, you are still unsure as to your rights and obligations under the Syndicate Agreement, we recommend that you seek independent legal advice. Why have a formal agreement? Lottery Syndicates are often conducted informally but this is unwise as there is the potential for a large payout. All sorts of difficult situations may arise – for example, where someone doesn’t pay their stake during a winning week, or someone demands that they were entitled to a bigger share of the winnings than other people (perhaps because they have been in the syndicate for longer). A formal agreement in writing deals with all of these eventualities, setting out exactly what each Member has agreed to. We are also aware that, where National Lottery winnings are shared out among the members of a syndicate in accordance with “a pre-existing enforceable arrangement” made before the win, there is no liability to inheritance tax since the syndicate manager does not make a “gift” or “chargeable transfer” – however, where no suitable agreement exists, inheritance may be payable (HMRC Statement E14 as amended in 1996, Division H3.4). Although this does not need to be recorded in writing, the HMRC advise this (HMRC Statement E14, supra). It is important to show that the parties to the syndicate intend it to be legally binding and more than a mere social arrangement so that, in the event of a prize being won, all parties are paid what they are due in accordance with what they have agreed. In Simpkins v Pays (1955), three persons regularly contributed to a competition and one week the entry was successful but the defendant refused to pay the plaintiff his share of the prize and claimed there was no intention to create a legally binding relationship. Although the plaintiff was successful in claiming his share, other claimants have been less successful in proving that all parties intended there to be a contractually binding agreement, particularly where there has been proximity of relationship (see, for example, Balfour v Balfour (1919) in which it was held that there was no intention to create a legally binding agreement between husband and wife to pay A£30 per month maintenance to the wife; also see Hoddinott v Hoddinott (1949) 2 KB 406, CA). Clearly such disputes could have been avoided had a suitable agreement been in place – a written agreement can be used as legal evidence if any Member of the syndicate disagrees with how any winnings are to be distributed. The essentials of our agreement For an agreement to be binding, there must be, amongst other things, a valid offer and acceptance. An offer is an expression by one person or group of persons, made to another, of his willingness to be bound to a contract with that other on terms either certain or capable of being rendered certain. The offer may be made to an individual (e.g., British Bank Foreign Trade Ltd v Novinex Ltd (1949)) or to a group of persons (e.g., The Satanita (1897)), or to the world at large (Carlill v Carbolic Smoke Ball Co (1893)). Our offer was made through a notice on the staff room wall and it is clear that we have made the offer only to employees of [Workplace]. This is simply to keep the syndicate administrable. Although advertisements and notices are not always construed as offers (such as in Partridge v Crittenden (1968) where further negotiation of terms was necessary to reach a binding agreement), we have ensured that our notice amounts to a formal offer by stating that, to join the syndicate, no further negotiations are necessary; an employee need only to avail themselves of the terms of the Agreement and insert their details into Schedule 1 (Part 1 or 2) to accept. In order to accept our offer to join the Syndicate, you need to comply with the terms of acceptance in the Notice, by adding your name and address to Schedule 1 (Part 1 or 2). You then need to sign the Agreement in the presence of an independent witness (who should also give their name, address and signature), and return it to our Syndicate Manager, [Name]. By doing this, you are demonstrating that you agree to the terms of the offer unequivocally and unconditionally (Taylor v Laird (1856)). Please note that this is the only mode of acceptance that we can allow – any other purported acceptance by some other means will amount only to a counter-offer in which case there will be no binding contract (Burton v Great Northern Rly Co (1854)). The remaining guidance notes below set out the reasons for the inclusion of the main provisions of the Agreement, and cite authority for each provision.
Clauses 1.7 – 1.9 are general interpretation clauses, so that for example, where the Agreement refers to ‘he’ it also includes ‘she’, and where the agreement refers to ‘the Members’ it also means a single member. Clause 2 sets out the purpose of the Agreement, for the avoidance of doubt.
The Agreement has been designed to accommodate not only the original members of [Workplace]’s syndicate (which are to be set out in Schedule 1 Part 1), but also any persons joining the Company in the future who may wish to play (which are to be set out in Schedule 1 Part 2). The Schedule is easily amended to accommodate new players. Because Schedule 1 Parts 1 and 2 is so easily amended, for the avoidance of doubt, we have included Clause 1.2 to the effect that to be a Member of the syndicate, you must include your name, address and signature in Schedule 1 (Part 1 or 2), which must be witnessed by an independent person (i.e. someone who is not a Member and who is not associated with the Syndicate in any way). You also need to include your date of joining – this is relevant to Clause 2 of the Agreement because you will be participating in the Syndicate from the next Saturday draw following your date of joining. We have also included provisions to allow any Member to resign from the Syndicate. Again, for the avoidance of doubt, this must be done by entering your name and address and signature, to be witnessed by an independent person, into Schedule 1 Part 3, together with the date on which the entry is made. This will prevent any dispute over what instructions were given to the Syndicate Manager.
We have agreed that our syndicate will only play in the Saturday Lotto draw, and this is set out at Clause 1.1. Wherever the Agreement refers to ‘the Lottery’, this means the Saturday Lotto draw. At this time, our agreed stake is A£1.00 per Member and this is set out at Clause 1.4 and in Schedule 2. We have included this in a schedule so that we can easily amend the Agreement in future if we decide that each Member wants to put more into the syndicate – we have made any such amendment subject to a unanimous decision so that all Members must agree to such changes. We have agreed that the tickets we purchase will be Lucky Dip tickets – these are tickets purchased which allow the National Lottery to allocate completely random Lottery numbers (Clause 4.3).
Clause 4 lays down quite strict requirements for ‘participating’ in the syndicate. Members are required to pay their stake to the Syndicate Manager by 13:00 on the Friday preceding each Lottery draw and if they do not comply with these provisions, they will not be construed as participating in the draw.
Clause 3.1 places the responsibility of collecting any prize on the Syndicate Manager, [Name]. The Syndicate Manager must collect the prize and hold it ‘on trust’: this means that, although they have the money in their possession, it does not belong to them and they are holding it for the other Members until it can be paid over (Abrahams v Trustee of the Property of Abrahams (1999)). Clause 3.3 provides that any prize won will be shared between the Members of the Syndicate who have participated in the draw for that week. Clause 3.4 requires that the Syndicate Manager pay the prize to the Members entitled to it within seven days. This is important because large prizes could potentially accumulate a substantial amount of interest if paid into a bank account, which the Manager could benefit from and/or the Members could lose out on. If the prize is not paid within seven days, therefore, interest becomes due at a standard contract rate (Clause 3.5).
The Agreement provides for a Syndicate Manager who will run the syndicate – this will be [Name] as identified in Schedule 1 Part 3. The Syndicate Manager can also be a Member. Clause 7 sets out the responsibilities of the Syndicate Manager which include to collect subscriptions, purchase Lucky Dip tickets, check whether the tickets have won a prize, obtain any prizes and distribute them to the Members entitled. The Syndicate Manager also has to keep records of all contributions and prizes which can be inspected by any Member, and to keep the Agreement (particularly the Schedules) up to date. We have included a provision that the Syndicate Manager may not purchase any Lucky Dip tickets for their own personal use on the same day as purchasing tickets for the syndicate – this is to avoid any confusion as to whose tickets have won since all syndicate tickets will be purchased on the Friday before the relevant draw. We have also included a clause that resolves the Syndicate Manager from any liability in respect of any failure to win a prize in the Lottery or any other financial loss or claim arising out of the Agreement, in the absence of any deliberate wrongdoing.
We have included a clause which states that the Members do not agree to participate in publicity as a result of winning a prize under the Agreement. We appreciate that some Members may not object to publicity but we feel that since publicity is intrusive, we need to protect the present and future Members that wish to avoid such intrusion.
The Agreement makes it clear that [Workplace] does not acquire any rights or obligations as a result of participation in the syndicate by its employees. Agreement for National Lottery syndicate This Agreement is made the day of between the persons listed in Schedule 1 to this agreement.
In this agreement:
By entering into this agreement, the Members are agreeing to join together to participate in the Lottery, commencing with the next prize draw after the date of their joining.
SCHEDULE 1 Original Members (names, addresses and witnessed signatures of original Members) Subsequent Members (names, addresses and witnessed signatures of persons joining later, with dates of joining) Former Members (names of Members who have resigned, with dates of termination of membership) The Syndicate Manager (name, address and signature of the Organiser and of any successor Organiser) SCHEDULE 2 Amount of the Stake (e.g. “A£1.00”) SCHEDULE 3
Abrahams v Trustee of the Property of Abrahams (1999) BPIR 637 Balfour v Balfour (1919) 2 KB 571 British Bank Foreign Trade Ltd v Novinex Ltd  1 KB 623,  1 All ER 155, CA Burton v Great Northern Rly Co (1854) 9 Exch 507 Carlill v Carbolic Smoke Ball Co  1 QB 256 CA Hoddinott v Hoddinott (1949) 2 KB 406, CA Partridge v Crittenden (1968) 2 All ER 421 Simpkins v Pays (1955) 3 All ER 10 Taylor v Laird (1856) 1 H & N 266; 25 LJ Ex 329 The Satanita  AC 59, HL
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