Creators Must Complete Their Kickstarter Projects

Kickstarter logoKickstarter has updated its terms of use to emphasize that those who use Kickstarter to fund their project must actually, you know, complete the project. Creators are also expected to fulfill each reward. It is only after a creator has done so that they’ve satisfied their obligation to their backers. Of course, this is referring to projects that have been fully funded by backers (not the ones that didn’t raise enough to get fully funded).

A key point is that the creator of a project has a legal obligation to the people who back the project on Kickstarter. Unsatisfied backers can potentially take legal action against a creator who raised funds but never produced the product. This isn’t new, it is simply being pointed out in an extremely clear way.

The new terms of use clarify the obligations that creators have to their backers. If a creator of a fully funded project fails to complete the project and fulfill rewards, they are required to “make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers”.

They are also going to be held accountable in other ways. Creators who are unable to complete their project must post an update that explains what work has been completed, how the funds were used, and what prevents them from finishing the project as planned. Other requirements include being able to demonstrate that they used the funds appropriately and that they made every reasonable effort to complete the project on time. This would be helpful in situations where a person had something tragic and unexpected happen that prevented them from finishing the project.

It also sounds to me like an attempt to ward off scammers. One cannot simply create a Kickstarter account, and then abscond with the money after the project is fully funded, without producing the product. I believe these new terms of use are a push for honesty and transparency from the people who use Kickstarter to fundraise a project that they are hoping to create.