Kickstarter has updates its terms of service in regards to what is expected of Project Creators, and what actions can be taken if they fail to deliver on successfully funded projects.
Section 4 of the new terms of service details the backer and project creator dynamic, stating that a binding legal agreement is created between customers backing a project and the project creators. Kickstarter is subsequently absolved from any legal action from backers who want to sue for projects that do not see the light of day.
Not only that, but the company also published a five-step checklist detailing what must be done when a project can’t be delivered:
Creators must follow a five-step checklist to satisfy Kickstarter that they have done everything they can to resolve the situation. They must:
- "Post an update that explains what work has been done, how funds were used, and what prevents them from finishing the project as planned"
- "Work diligently and in good faith to bring the project to the best possible conclusion in a timeframe that's communicated to backers"
- Be "able to demonstrate that they've used funds appropriately and made every reasonable effort to complete the project as promised"
- Have "been honest, and have made no material misrepresentations in their communication to backers"
- "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 updated Terms of Service arrive in the wake of several failed projects, including the Yogscast backed Yogventures sandbox game, miIDkey’s voice-activated, fingerprint secure USB drive that initially earned $473,333 through Kickstarter and additional $3 million through later investments, burning through all funds without a finished product, or the motion-controlled sword-fighting game Clang backed by science-fiction author Neal Stephenson.
You can read the changes in full, here.