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Comment by NelsonMinar | Hacker News Reader

The old terms and conditions in funding a Kickstarter were very clear. Either the project delivered, or else all the backers got their money refunded. There's no "good hearted" about it in the contractual materials.

The truth is that no one's ever collected from this and there have been a lot of funded, failed Kickstarter projects that never refunded anything. Until this one.

A lot of people say Kickstarter shouldn't be like this, that no one should expect refunds. But that wasn't the way the site worked until a couple of years ago when the TOS changed.

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IIRC, refund was mentioned but absolutely no mechanism (legal nor financial) was in place to ensure it happened, relying on the failing company's obligations to suffice. That doesn't work too well when the whole point is the one entity tasked with performing the refunds doesn't have any money (anymore) or means to do so.

I'm wondering myself, having payed into a project which keeps promising "almost there" and nearly a year late shows little more than a video of a lame prototype unlike what most backers expect. Trying to stay optimistic, but resigned to it falling thru - and there being no money remaining to refund.

I think this article shows exactly the mechanism to enforce it - you sue for breach of contract.

Now, for most people, getting their 20 bucks back is not worth the trouble and costs of a lawsuit. Which is exactly why the suit in this case was carried out at a higher level, taking advantage of the fact that the guy running the project as well as some backers lived in the same jurisdiction.

> or else all the backers got their money refunded

Refunded from what? If you have the money to "refund" people why would you ask for their money in the first place?

Author can refund the backers even if he does not have the money anymore. Loans, debts, etc.

Do you have a link to the old terms? I don't remember that ever being the case that they were to refund the money after the project went through.

For projects backed before Oct 19 2014: https://www.kickstarter.com/terms-of-use/oct2012

Under "Projects: Fundraising and Commerce": "Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill."

> By backing a fundraising campaign on Kickstarter, you as the Backer accept that offer and the contract between Backer and Project Creator is formed. Kickstarter is not a party to that agreement between the Backer and Project Creator. All dealings are solely between Users.

I'm not convinced. The section you referenced pertains to the backing rewards only. They are, and always seem to have been, very hands-off about the delivery of the project.

The project itself is almost always also the reward.

e.g., "$50 tier, get a copy of the game"

Unless none of the reward tiers involve the project itself, and are all things like t-shirts and stickers...

I disagree. "5$ donation, get nothing" wouldn't require a refund.

The project purpose is to make a game. That's separate from the reward tier "get a copy of the game". So if the project fails, the backers who bought a copy of said game need to get a refund.

This is some interesting wording. How can a third party enter separate parties into a contract?

Do projects really setup their own contracts with their funders?

Contracts fall under civil law. There is no statutory definition of what constitutes offers and acceptance. So in this case, were I a lawyer, I'd argue that the TOS is a legal contract, and by using the site, you have implicitly agreed to the definition of contract acceptance specified in the TOS.

Whether it holds up in court is a different question, but this lawsuit at least gave a precedent.

Do you have any examples of implicit acceptance of arbitrary contracts merely through accessing a network resource?

Of course not - The contract would be made when money was exchanged, not when the site was accessed.

Sure, but the money is exchanged between kickstarter and the participants (backers and makers). The participants don't exchange directly with each other.

Yup, that is a likely counter argument to be made in court if anyone ever sues over these issues. As I said, though, this is civil law, so it would come down to how lawyers argue it and what judges think. In civil cases, answers are rarely black and white.

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