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Kickstarter updated its terms of use late last week, mostly cleaning up the site's fine-print language to better spell out the relationship between project creators and backers. It will remain hands-off while project leads enter agreements with their supporters, which worked well for the funding platform to this point, as it reached $1 billion in pledges in March.
Those contracts are the focus of the revised terms, as Kickstarter is now emphasizing the actions creators must take if they fail to live up to their word as well as the potential consequences if they walk away. The boldest inclusion stressed that creators who are unable to satisfy the terms "may be subject to legal action by backers." While Kickstarter still won't involve itself in the proceedings, this opens a clearer lane for possible lawsuits from project backers should creators fail to live up to their agreement or offer alternative solutions.
Kickstarter also introduced a checklist for creators that don't complete their project and fulfill backer rewards, an improvement over its previously vague terms. The funding service will require that failing creators post updates to explain the project's status, how funds were used and what will continue to keep the project from being completed. If creators don't offer a clear roadmap to supporters that demonstrates that "they've used funds appropriately and made every reasonable effort to complete the project as promised," they are to "offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged)." Alternatively, creators will have to explain "how those funds will be used to complete the project in some alternate form."
The new terms will go into effect on October 19 and will affect all projects created on or after that date. That means already-failed projects, such as the recently-canceled sword-fighting simulator Clang from sci-fi novelist Neal Stephenson, won't be impacted by the new, clear terms. Clang earned $526,125 on Kickstarter in July 2012 before it went dark for some time, being paused by Stephenson one year ago before its official cancellation last week. The developer opted to grant roughly $700 in refunds for about two dozen backers, and while Stephenson said the team did deliver a prototype game, he admitted it "wasn't very fun to play."
