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Kickstarter Updates Terms Of Use Section Related To Failed Projects

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TechCrunch by Sarah Perez | September 19, 2014

kickstarter terms of use 300x187 - Kickstarter Updates Terms Of Use Section Related To Failed ProjectsPopular crowdfunding destination Kickstarter updated its Terms of Use today to clarify what specifically needs to happen if a project runs into trouble and creators are unable to deliver. Though Kickstarter itself is obviously not an online retailer, it does provide a platform where products are sold.

In Section 4 of Kickstarter’s revised Terms of Use, the company now explains that when customers are backing a project, they’re creating a legal agreement between themselves and the project creators, not with Kickstarter.

That alone could help to absolve Kickstarter from any legal action from backers who want to sue when projects go south, the product never ships, and their money effectively disappears.

Related: Crowdfunding Insights from 400K Kickstarter and Indiegogo Campaigns

However, Kickstarter took things a bit further in order to spell out exactly what is expected from creators when projects fail. For the most part, this involves communicating with the community of backers to explain what happened and why, documenting how the funds were used up or how they’ll be put to use to complete the project in alternate form, and offering a revised timeline.

Kickstarter also reminds creators that they need to be “honest” and not make “material misrepresentations in their communication to backers.” (In other words, scammers beware.)

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Additionally, the terms now state that creators who are unable to stand by the promises they made in their project may be subject to legal action by backers. (The possibility of legal action has always existed, but that part was not spelled out clearly in the previous terms.)

The new Terms of Use will go into effect for all projects launched on or after October 19, 2014, the company says. View the Kickstarter's Terms of Use here.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us or contact us at casano@ncfacanada.org.

share save 171 16 - Kickstarter Updates Terms Of Use Section Related To Failed Projects

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