Entertainment Law News: Kickstarter Policy Changes

The Move Towards a More Transparent Kickstarter

by: Anthony Zangrillo

Recently, the most successful crowd funding website Kickstarter updated its Terms of Use.  Some backers have outcried for more transparency in the projects they support.  Without notice, creators have cancelled projects, months after beginning the creative process, wasting many of the funds received.  Kickstarter has claimed that these updated policies reflect a longterm effort to clear up any lingering ambiguities of a creator’s failure to deliver.

Analyzing the new terms, section 4 of the document states that customers backing a project enter into a binding legal agreement with the project creators.  This clarification most notably relieves Kickstarter of any contractual obligations, if a project never fully comes to fruition.

Surprisingly, Kickstarter goes on to mention the specific duties that a creator has towards his backers.  The creator must communicate with the community of backers to explain what problems arose and why they have delayed the project.  Additionally, the creators must provide documentation of their funds, which will make this enterprise less secretive.  Finally, the creators should explain future plans for an alternate project, if possible, with a revised timeline.

The most interesting language with the section calls for “honest” representation, clearly showing that Kickstarter takes a firm stance against scammers and misrepresentation.

According to Kickstarter, backers can now sue any creators that do not meet the above requirements.  While the public has always assumed legal action would remedy any failure to produce content, many of my own personal fears have subsided thanks to this extra legal provision.

The company claims that the new Terms of Use will go into effect for all projects launched on or after October 19, 2014.

Check out the online document here: https://www.kickstarter.com/terms-of-use#section4