Kickstarter Updates Terms For Failed Funded Projects


Have you ever backed a Kickstarter project, only to have it fall flat and get nothing in return? That’s about to change as the company has updated their Terms of Use for all projects launched on or after October 19, 2014.

As with any project, unforeseeable can arise making it difficult – or even impossible – for that project to be completed. However, in the crowdsourced funding arena, hundreds – if not thousands – of backers can be out various amounts of money and see nothing in return if the project they backed falls flat.

Kickstarter is finally recognizing this as a major issue with their site and have updated their Terms of Use for project creators and what they must do on the off chance their funded project fails.

When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers.

Throughout the process, creators owe their backers a high standard of effort, honest communication, and a dedication to bringing the project to life. At the same time, backers must understand that when they back a project, they’re helping to create something new — not ordering something that already exists. There may be changes or delays, and there’s a chance something could happen that prevents the creator from being able to finish the project as promised.

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. A creator in this position has only remedied the situation and met their obligations to backers if:

  • they post an update that explains what work has been done, how funds were used, and what prevents them from finishing the project as planned;
  • they work diligently and in good faith to bring the project to the best possible conclusion in a timeframe that’s communicated to backers;
  • they’re able to demonstrate that they’ve used funds appropriately and made every reasonable effort to complete the project as promised;
  • they’ve been honest, and have made no material misrepresentations in their communication to backers; and
  • they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.

The creator is solely responsible for fulfilling the promises made in their project. If they’re unable to satisfy the terms of this agreement, they may be subject to legal action by backers.

While this Terms of Use update bodes well for backers of failed projects, Kickstarter also removes themselves of any responsibility for failed contracts by stating that they are not part of any contract between project creators and their backers.

Have you backed a failed Kickstarter project before? What did the project creator do to make things right? Let us know what you think about these updated Terms of Use in the comments below, or on Google+, Facebook, or Twitter.

  Source: Kickstarter Blog  Source: Kickstarter Terms of Use

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