Kickstarter updates terms to address creators who fail to deliver on their projects

    Even though this is not a Homerun or backers, its a good start to show creators that they have an obligation to answer to the backers. Creators must now show in detail how the funds have been used and why they couldn't complete the project.


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Kickstarter is revising its terms of use in an effort to clarify the relationship between project creators and backers, and in particular, to spell out the responsibilities that creators have to their backers, the company announced today.

Kickstarter has traditionally taken a laissez-faire approach to the service. Company officials characterize the crowdfunding site as a platform, a middleman, rather than a participant in transactions between its community members. Kickstarter has never offered any kinds of guarantees or enforcement of project completion, and won't get involved in any disputes between backers and creators except to work with authorities investigating fraud. However, Kickstarter considers the backing arrangement to be a binding legal agreement between creators and backers, with creators being legally obligated to fulfill the project and any associated rewards.

None of that is changing with the update Kickstarter announced today. But the company rewrote its terms of use in plain English rather than legalese, and added a section with notes on the creator-backer relationship, and specific requirements for creators in the event that they are unable to follow through on a project.

"Every reasonable effort" includes starting off with an explanation of the work that has been completed by that point, how the backers' funds were used and the circumstances preventing the project from being completed. Creators must "demonstrate that they've used funds appropriately and made every reasonable effort to complete the project as promised," and throughout the process, creators must continue to communicate honestly with backers. And as always, creators are required to offer refunds for unfulfilled rewards, "or else explain how those funds will be used to complete the project in some alternate form.""If a creator is unable to complete their project and fulfill rewards, they've failed to live up to the basic obligations of this agreement. To right this, they must make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers," reads the updated document.

Only if creators satisfy those stipulations are they considered to have met their obligations to their backers and "remedied the situation." Finally, the terms of use explicitly warn creators that if they don't meet those standards, they open themselves up to possible legal action from backers.

"This update reflects the best practices we've seen from our community to get the best possible outcomes from challenging situations. Incorporating them into these terms is a small but important part of building a healthy, trusted environment where people work together to bring creative projects to life," said Yancey Strickler, CEO and co-founder of Kickstarter, in a post on the company's blog.

Recent Kickstarter failures include Clang, the swordfighting game from science fiction author Neal Stephenson and developer Subutai Corporation. Stephenson officially canceled the project yesterday, more than two years after it was successfully funded for more than $526,000.

Kickstarter's revised terms of use will apply to all projects launched on or after Oct. 19.

• SOURCE
 Polygon

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