Yogventures Highlights Kickstarter’s Disturbing Legal Grey Area

Although everyone is convinced that Yogscast is in clear violation of Kickstarter policy after they raised more than half a million dollars for the game Yogventures, cancelled the project after Beta testing and refused to refund the backers, certain interpretations of Kickstarter’s terms and conditions could mean they are indeed, not obligated to do anything.

One thing is for sure: Kickstarter is certainly not liable. Go ahead and count the amount of times the terms of use say anything like “Kickstarter is not liable,” or that “Kickstarter is not a party to that agreement between the Backer and Project Creator.” But Yogscast has to be liable, right? An article on Kotaku seems to think this passage from the FAQ is a smoking gun:

smokinggun

Not so. This hinges on two elements: 1) the meaning of the phrase “good-faith effort,” and 2) what it means to “fulfill all rewards.” In law, and especially tort law, “good-faith effort” is one of the most ambiguous terms, usually left up to a reasonable person standard as determined by a judge. Looking at Kickstarter’s own terms, though, it lays out potential steps a project creator must take if they are struggling, likely enough to constitute a good-faith effort to complete the project and fulfill the rewards.

goodfaith

The steps Yogscast took are almost identical to those listed when problems came up. They posted a project update, detailing all the speed bumps and emailed it to all backers. Being in the same section, it’s likely that these are the steps to show that Yogscast were making a “good-faith effort” and, as stated in the second paragraph, backers are encouraged to “be patient and understanding.” Regardless, though, the terms and agreements states that project creators should fulfill the rewards promised. Upon further investigation, Kickstarter is not exactly clear on what that means:

problems

Notice the ambiguity in the language. “Steps could include …” or “satisfy backers” don’t have clear prescriptions or clear definitions. Sure, Yogscast could give people refunds if they desire, but Kickstarter isn’t exactly telling them to, and this may be the basis for their claim that they aren’t “obligated” to refund backers. This passage implies that anything that can “satisfy” the backers could qualify as a refund or a fulfillment of promise. Read the Reddit post where that email was posted; it seems like some users were just happy they responded.

Especially given that Yogscast even detailed “exactly how funds were used,” it seems like they are playing this one exactly by the book to avoid any potential legal recourse. That is why the book needs to be changed. Basically, the only deterrent for messing up a project clearly outlined in Kickstarter’s policy is the company’s reputation.

reputation

That’s it. Really, Kickstarter? I’m sure the destruction of Yogscast’s reputation will give a lot of solace to the 13,647 backers who collectively pledged $567,665, some of whom individually pledged thousands, and Yogcast has a good case to say that they don’t have to give them one penny of it back. The ambiguities in Kickstarter’s policy allows an open door for developers to gamble on their own abilities using other people’s money.

To Yogscast:

I don’t know of any situation in the real world where “I don’t have the money to pay my debt” is a valid excuse. No excuses. Do the right thing. If that means a refund, so be it. I know you say you footed a lot of the cost out of your own pocket. Are you forgetting the other pockets that went into the project? You made your bed, now pay for it.

To the Backers:

Demand they pay for it. Whether or not you are satisfied with a little email, or beta access into a future indie project, or whatever other token of appreciation they can come up with to satisfy you, this cannot be tolerated. Letting Yogcast buy you off with anything other than what they promised sets a dangerous precedent that anyone can use your money to try their hand at game creation, fail, and not be held accountable.

To Kickstarter:

Change your policy to hold project creators more accountable. Enough of this “steps could include” and “satisfy the backer” nonsense. You aren’t legally liable, and if that’s enough for you, then fine. But people are taking advantage of the loopholes in your website that harm first and foremost the backers. Show you care.