Shanna Compton points out a clause in the Zoo Press contest guidelines that permits the publisher not to select a winner in its short fiction contest even though it collects a $25 reading fee for each story submitted. For background, see my prior entry. (Thanks to Den for the link.)
So there’s likely no legal issue. Still, the situation smacks of bad faith to me. I have no problem with reading fees to keep small literary publications afloat and cover the cost of contests, but a significant number of the writers entering these contests are barely able to scrape together the money for $5 or $10 entry fees, let alone $25.
Zoe Press’ guidelines may not rise to the level of an adhesion contract, but they walk the line, in my opinion.