Kickstarter Changes the Rules

Crowdfunding startup Kickstarter updated its terms of service Friday to protect itself from lawsuits and encourage creators to keep an open dialogue with backers even if a project tanks.

The terms change comes just after news that a new Federal Trade Commission rule could make online retailers "abide by a 30-day shipping requirement" or give customers a refund, according to TechCrunch.

Kickstarter denied any connection to the possible FTC rules.Instead, Kickstarter said it wanted to make its terms clear to both creators and funders alike: they are creating a legal agreement, not with Kickstarter.

Kickstarter doesn't want any legal problems when a creator can't deliver a flying car or cat-powered boat, but it also wants to make it clear to the creators that they owe their backers communication when the project can't go on. This means creators will have to explain what happened to backers, document what went wrong and how the funds were used or how they will be used. The startup also will pressure them to be "honest" and not misrepresent themselves or their projects.
 The new terms will go into effect Oct. 19.
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