Kickstarter Updates Terms With Creator Obligation To Finish Projects

In a move to renew confidence in crowdfunding for projects including video games, Kickstarter has updated their terms of service to require that creators finish their projects.

These provisions are easy to understand, but they cannot be taken for granted. If creators fail to meet their obligations, this opens them up to liability and legal action from the backers.

Kickstarter explains that the reworded terms were intended to make the original intent of their terms and conditions clearer. Under these new terms, there can be no dispute that creators have an obligation to their backers to finish their project. If they are unable to deliver, they did not live up to the obligations of the agreement.

This provision does take into account that projects can be delayed, or even fail and have to be cancelled. However, creators are still obligated to take any reasonable steps to finish the project in a way that is satisfactory to the backers.

If the project cannot be completed, a creator has not met their obligations unless they do this:

·         Explain what work was finished, how funds were used, and why the cannot finish the project

·         They have taken all steps possible to finish the project ‘to the best possible conclusion’

·         They can prove they used the money and went about production appropriately and reasonably

·         They did not make any material misrepresentations in their communication to backers

·         They use funds to finish project in a satisfactory form, or return funds to backers who did not receive their reward. If there isn’t enough money left, they have to divide the money in proportion to donations given

With this new policy in place, backers have a legal recourse when developers fail to deliver on their games as promised. After the controversies caused by cancelled Kickstarters such as Yogscast and Spacebase DF-9, this has been long overdue.

Note that these terms still do not put any obligation on Kickstarter to monitor or compel their creators to finish their projects. They do give backers and creators clarity in terms of their rights and obligations.

Are these terms satisfactory to you? Do you think this should be made standard for all crowdfunding companies? What further changes, if any, would you like to see made? Let us know in the comments below.

Image is from Spacebase DF-9.