Kickstart Wars, Episode II: The Backers Strike Back

Previously I discussed why the adorably naive (and now cancelled) Star Wars open world RPG Kickstarter would not be able to use the Star Wars IP for his proposed game without the express permission of the copyright holder, Lucasfilm Ltd. Today I discuss the potential legal recourse a backer to a crowdfunding project has against a project organizer who fails to deliver on their promised rewards.

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Individually, a jilted backer may not pose much of a threat, but many of them together…

What is a Contract?

When a backer puts money towards a crowdfunded project and the project organizer promises rewards to backers, this actually creates a simple contract between the backer and the project organizer. According to Kickstarter’s terms of use:

When a creator posts a project on Kickstarter, they’re inviting other people to form a contract with them. Anyone who backs a project is accepting the creator’s offer, and forming that contract.

Kickstarter is not a part of this contract — the contract is a direct legal agreement between creators and their backers.

But what does it really mean to form a contract? In a nutshell, a contract is a promise that is enforceable by law. On the first day of Contracts class every semester, law school professors across the land will utter variations on the following statement: “Three elements are required for a valid enforceable contract: offer, acceptance, and consideration.” Continue reading

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