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weeble, as you do seem to know which end is up with contracts based on this and your posts in other Dakka legal threads, what is your opinion of the contract as shown? Obviously there's other agreements in play as there's some undefined terms in there, but based on what we do know.

To me as a complete novice, this seems like a highly unfavorable contract to DS. They have hard deadlines for things to be shipped, while the obligations of BF are very nebulous and open to interpretation (e.g. - immediately distribute funds, but based on things that have no set time for them to actually know such as order quantities which apparently took until October/November?). I assume, which is dangerous I know, that BF's actions in not getting the manufacturing information together in a timely fashion undoubtedly caused DS to miss the shipping dates specified, but if that is the case does that throw the whole contract into a quagmire? I would think there's a certain amount of reasonableness to contracts that BF couldn't force their partner to be in breach of contract by faffing about with the pledge manager, but "common sense" and "law" don't always seem to align.

However, as presented the contract does seem to favor BF though with the caveat that DS would have probably been able to live up to their commitments had BF been more on top of their end of the deal. That said, I'm not experienced in the slightest about such things and it could be that this is a routine sort of agreement that's just gone off the rails in this particular case.

 Krinsath wrote:
weeble, as you do seem to know which end is up with contracts based on this and your posts in other Dakka legal threads, what is your opinion of the contract as shown? Obviously there's other agreements in play as there's some undefined terms in there, but based on what we do know.

To me as a complete novice, this seems like a highly unfavorable contract to DS. They have hard deadlines for things to be shipped, while the obligations of BF are very nebulous and open to interpretation (e.g. - immediately distribute funds, but based on things that have no set time for them to actually know such as order quantities which apparently took until October/November?). I assume, which is dangerous I know, that BF's actions in not getting the manufacturing information together in a timely fashion undoubtedly caused DS to miss the shipping dates specified, but if that is the case does that throw the whole contract into a quagmire? I would think there's a certain amount of reasonableness to contracts that BF couldn't force their partner to be in breach of contract by faffing about with the pledge manager, but "common sense" and "law" don't always seem to align.

However, as presented the contract does seem to favor BF though with the caveat that DS would have probably been able to live up to their commitments had BF been more on top of their end of the deal. That said, I'm not experienced in the slightest about such things and it could be that this is a routine sort of agreement that's just gone off the rails in this particular case.

I would disagree that it is unfavorable to DS.

They get set moneys based off from products delivered. They only need to deliver on time...pretty easy stuff.

BF carries the brunt of the unknowns and gets a "share of the profit" - a very nebulous and often non-existent thing.

 Sean_OBrien wrote:

I would disagree that it is unfavorable to DS.

They get set moneys based off from products delivered. They only need to deliver on time...pretty easy stuff.

BF carries the brunt of the unknowns and gets a "share of the profit" - a very nebulous and often non-existent thing.

I was thinking in terms of obligations, but yes you are right that financially DS is much better off now that I read it from that angle. This also makes much more sense as to why BF would be so keen to renegotiate, though it could also be that 25% of the proceeds is now insufficient to cover shipping and BF doesn't want to lose tons of money on that deal. Or a combination of that and more besides.

So, it all comes down to money in the end in all likelihood which I think surprises....nobody? Pretty sure that's who's shocked at this anyway. Unfortunate though because Dust seems an interesting concept.

 Sean_OBrien wrote:
Might just be that is early in the morning - but I am left wondering what the W9.1, W9.2 and W9.3 are...

This is why I assumed the entire contract was longer.

weeble1000 wrote:

 Sean_OBrien wrote:
Might just be that is early in the morning - but I am left wondering what the W9.1, W9.2 and W9.3 are...

This is why I assumed the entire contract was longer.

Could be a reference to their initial contract for distribution of the Dust property as a whole maybe...?

weeble1000 wrote:

 Sean_OBrien wrote:
Might just be that is early in the morning - but I am left wondering what the W9.1, W9.2 and W9.3 are...

This is why I assumed the entire contract was longer.

Unfortunate that these sorts of things are my guilty pleasure...

Dust answered the question elsewhere...

Apparently they were citations for a previous contract that BF had not fully paid DS for (relating to their Operation Achilles product offerings).

Likely will not get anything productive done today as I dig through what is and is not available on the two companies.

 Krinsath wrote:
weeble, as you do seem to know which end is up with contracts based on this and your posts in other Dakka legal threads, what is your opinion of the contract as shown? Obviously there's other agreements in play as there's some undefined terms in there, but based on what we do know.

It is important to note that someone like Sean has more experience with drafting and negotiating contracts. My experience comes from contentious litigation that has devolved to the point of a likely trial.

So my experience is mostly with the story behind a contract dispute. I'm not paying so much attention to what the contract actually says, although it looks pretty straightforward aside from the references to what appear to be product codes that are nowhere defined in the document. I'm mostly looking at what Parente and Battlefront are saying about the situation. Contracts are negotiated by people, and people have different ideas about things.

Of course, that's one reason to have a written contract with clearly defined terms, but even contracts between billion dollar companies can often look irrationally ambiguous.

What I see here is a problem. Kickstarter fulfillment is way behind schedule and wave shipment is tearing into the profits. The Kickstarter money is finite and every additional problem along the way eats into it. Fingers have begun to be pointed, pressure has been applied, emotions are on the rise.

Whatever the contract says, there's probably enough wiggle room for both parties to feel that they are in the right. Parente is clearly miffed and feels like the aggrieved party. Now, Sean is entirely correct that Dust is in a weaker position relative to Battlefront. This means that Battlefront will feel a little safer in turning the screws and Dust will feel more helpless when pressure is applied. It does not, however, immediately mean that Battlefront is in the wrong.

The delays are a big issue with this thing. Parente is trying to lay those delays at the feet of Battlefront, which means that Battlefront has probably blamed all or some of the delays on Dust.

This is ultimately a Kickstarter problem, and it should be yet another object lesson in why backing a Kickstarter is a risky proposition. Even established companies will feth things up, and there is an inherent friction that comes with a big pile of money sitting in a bank account somewhere that everybody wants their piece of. You know the money is there, you know how much it is, and you've been waiting 18 months to get your share. That's not a happy recipe.

I find it far more likely that Battlefront wishes to renegotiate the 209K that they owe DS, which if you consider the fact that this 209K is supposed to come out of the KS funds of 460+K, and before the cost of production, cost of shipping from paolo to them, cost of shipping from them to the backers and so on. They may have taken less than they wished to in the KS. Otoh, waiting till wave 2 to do this is kinda screwy

Wow, according to a recent FB post by Paolo Parente, Battlefront spent the KS money on non-Kickstarter related Dust projects, according to Paolo Parente in this FB comment:

"...you are right, somebody tried this already... the mediation l mean, they came up with a variety of excuses why they were not giving Dust Studio the funds. The last "hilarious" one was: since they used KS $ to pay their debts for wave 9.1-.3 plus the first part of the Babylon delivery we should consider ourselves fully payed YES! try this next time you go to the grocery store! "3 kilograms of Apples + 3 Kg. of Oranges, please. Here is the money for the apples. What!? outrageous! you don`t REALLY expect me to pay for the oranges now!!!"

https://www.facebook.com...8/…

I believe that the contract is most likely full, but reference other contracts they have between them. When asked about the smallness of the contract Paolo stated this:
(the following quotes come from the Dust Tactics Fans - Official Facebook group: https://www.facebook.com/groups/303941853917/)

Paolo Parente: you are right André Winter, this contract lacks of many things including a Confidentiality Clause, that makes it eligible for being public.

When asked about the weird W9 items he said:

Rick Ivansek I believe W9 line items are the earlier pre-Kickstater main stock items that they never paid for until receiving the KS funds.

Paolo Parente That`s correct.

My guess is that those items are the newer starter boxes and/or have to do with Operation Achilles.

What I've gathered is that both companies initially shouldered large chunks of money for DUST. Dust Studios is mainly responsible for the models and IP, while Battlefront is not only responsible for distribution, but also for things (I believe) such as the rules, possibly printed materials, dice, etc. It sounds before the kickstarter Battlefront was in debt in the project and they had not paid DS for the initial models (W9 line items) that they had been selling.

The kickstarter was to get things moving and help get Battlefront out of debt on the project. Conjecture: By that time, I'm sure BF was much less enthusiastic about the project and from what I gather from customers, dragging their feet on the distribution side.

Steven Painter: This contract says to me that BF could not have made any profit from the kickstarter. Without doing the math it looks like they offered backers too much at too low a price, and items W9.1, W9.2 and W9.3 are what? Outstanding debts? Whatever they are, they would have eaten any remaining profits...

Paolo Parente: That`s correct, the goal of the KS was to help BC pay their overdue invoices to our Factoring Bank that was chasing them... There are no profits on either side. DS have invested 400K USD in the production and tooling... no profits is ok. Life goes on.

The kickstarter went through Battlefront because they have a USA based section of the company and they owed money to DS's factoring bank (for the previously unpaid items).

Terry McDonough: Thanks Paolo for putting up the contract. It certainly make for interesting reading. I know hindsight is a wonderful gift but given the bulk of the funds raised were to go to DS to pay for product & settle debts why didn't DS have the contract written so that payment was to go direct to DS & not through BF ?

Paolo Parente: Terry McDonough, for two reasons: DS is an Hong Kong company, not directly eligible for a KS, secondly the overdue payments were for the Factoring Bank to cash not to go directly to Dust Studio.

It sounds like in middle of the campaign Battlefront made the classic KS mistake of allowing backers to make various customizations to their pledges to bring in more money, which of course sounds like a good idea at the time, until you have to sort that out post kick-starter.

After the kickstarter, Battlefront used the money to pay the factoring bank to get out of debt first, when they were supposed to pay DS for the kickstarter items first.

Paolo Parente: OH! they payed the Bank before they payed us, it`s a "small" breach of contract that has been forgiven, you know... when a bank chases u...

Then came the Pledge Manager nightmare. My understanding is because of all the customized pledges, the number of backers, and allowing for add-ons post Kickstarter, BF became extremely delayed with the pledge manager, well past the contracted KS due date. I'm sure BF invested a lot more time, energy, and funds than anticipated.

Without having an accurate count of who wants what, Dust Studios was unable to know what to produce for whom. Initial items were produced by DS, but I'm sure not enough to cover all of the orders.

At some point BF also had made arrangements to distribute to stores, including the Warstore, who with their normal discount, listed pre-orders on items for less than what the backers were paying. Backers were of course angry at this, and with the fact that it seemed some of these places may get the KS items before or at the same time as them.

BF divides up the KS into 2 waves to prevent further dealy (another classic KS mistake, due to the cost of postage), and sends out the first wave of material. However there are various reports of backers receiving very little, long packings lists of various items on "Out of Stock". There were also a number of mispack reports. A number of backers become angry over lack of communication and/or responses to mispacks.

BF continues to take orders, but seems to communicate with DS about as much as their backers, which is very little. DS reports being uninformed on what to make for Wave 2 and asks backers to send them their packing slips so they can continue production while the money situation gets sorted out.
https://www.facebook.com/photo.php?fbid=10202410724509159&id=1824834735&set=gm.10152731165138918&ref=tn_tnmn

Paolo reports that he still hasn't been paid for their work (for at least the Wave 2 items) but has been continuing to make at least the amounts he's aware of (along with additionals).

Paolo also reports that mediation has already been tried (at least once):

Paolo Parente: Brynn Wood you are right, somebody tried this already... the mediation l mean, they came up with a variety of excuses why they were not giving Dust Studio the funds. The last "hilarious" one was: since they used KS $ to pay their debts for wave 9.1-.3 plus the first part of the Babylon delivery we should consider ourselves fully payed YES! try this next time you go to the grocery store! "3 kilograms of Apples + 3 Kg. of Oranges, please. Here is the money for the apples. What!? outrageous! you don`t REALLY expect me to pay for the oranges now!!!

Lol, kinda called it

Thanks for the summary carboncopy.

It does seem that BF thought they would be able to turn the line around and having failed to do so are now not happy with their arrangement. I'd be concerned that this is pretty likely to lead to a BF/DS split regardless (for obvious reasons on both sides). At that point where does Dust go from there? Direct marketing? The whole boondoggle with the KS seems to have started from their lack of reach, and that doesn't get better without a distributor of any kind.

Why does BF care if they're not making money from the DS KS? In their own words

"We generate more revenue in a single boardgame release or month of FOW sales than DUST is worth all year so this project is all about the DUST Studio and their needs and we as partners are doing our part to help" From their KS comment, May 22, 2014.

I mean, honestly I'd just be throwing this back in their face most of the time in this situation

Jesus, there's three different spellings of Spesnaz/Spetsnaz in the three listings of them I saw while going over the contract and neither one is correct That's quite a feat.

I have a very bad feeling about this. I simply hope that Dust will not end up with the same fate as AT-43.

wildger wrote:
I have a very bad feeling about this. I simply hope that Dust will not end up with the same fate as AT-43.

With the way this is going, it probably won't end up far from it. The FFG sale last november at 75% off reminded me of AT-43 and ironically the fact that I've never used any of the AT-43 stuff they sold at that discount is why I didn't order any Dust stuff at the same. Dust probably won't completely go belly up but will likely turn into a direct order from the manufacturer boutique game like Heavy Gear that almost no one carries.

Paolo Parente, the father of Dust

I get a sudden image of an Iberian-themed lich.

 warboss wrote:

wildger wrote:
I have a very bad feeling about this. I simply hope that Dust will not end up with the same fate as AT-43.

With the way this is going, it probably won't end up far from it. The FFG sale last november at 75% off reminded me of AT-43 and ironically the fact that I've never used any of the AT-43 stuff they sold at that discount is why I didn't order any Dust stuff at the same. Dust probably won't completely go belly up but will likely turn into a direct order from the manufacturer boutique game like Heavy Gear that almost no one carries.

The big difference is that Rackham owned AT-43, so when they went under, AT-43 went down with it, Paolo had no option to keep it going. Dust is owned by Paolo, so unless Dust Studios completely closes, I don't think Dust will die off. This KS isa huge hit to the brand, when it shoud have done the opposite, and that is ALL on Battlefront. The fact their customer service department has been inactive for months should tell you all you need to know about how poorly they run their business.

I believe I'll start to shy away from kickstarters involving more than one entity(other than the creator/manufacturer kind), along with album or any kind of music kickstarters. Way too much can go wrong.

Another article on the matter
http://www.somethingswrong.sg/2015/02/dust-operation-babylon-kickstarter.html

Thanks for sharing, that's the best recap of this whole mess yet.

 Sinful Hero wrote:
I believe I'll start to shy away from kickstarters involving more than one entity(other than the creator/manufacturer kind), along with album or any kind of music kickstarters. Way too much can go wrong.

That's *definitely* true, but, I think, for this KS, it's more like, "A KS doesn't make a bad company become good". See: Doom that Came to Atlantic City and Defiance.

Thanks for the article, Jehan.

ced1106 wrote:

 Sinful Hero wrote:
I believe I'll start to shy away from kickstarters involving more than one entity(other than the creator/manufacturer kind), along with album or any kind of music kickstarters. Way too much can go wrong.

That's *definitely* true, but, I think, for this KS, it's more like, "A KS doesn't make a bad company become good". See: Doom that Came to Atlantic City and Defiance.

Thanks for the article, Jehan.

Kickstarter is fine as long as you treat backing a project as a charitable donation or a speculative investment with no guarantee of return. A backer is like a junior league venture capitalist who never gets a huge return.

I back projects because I believe in them, or because I think the product is a cool idea. For me, when a Kickstarter project fulfills, I consider it a nice surprise in the mail, like a refund from a utility. Will my Tac-Tiles ever arrive? Probably, but I won't cry in my cereal if they don't. Is Aetherium going to show up one day? Most likely, and I'd love to see the product, but I backed because I love the company's philosophy. Are my Wolsung pledge rewards going to show up one day? Sure, sometime. And it will be a nice surprise when they do. But I ain't looking for them. I threw a little money at Bones 2 because I was going to buy those models when they hit retail and a wave 1 shipping slot opened up. I will honestly not be surprised if my little $10 pledge gets lost in the mix. If it does, I'll just buy them again when they hit retail. No big deal.

I back each and every Red Box Games Kickstarter on principle. I have so many RBG miniatures I likely won't ever get around to all of them. But that's not the point. Keeping those lovely products on the market is the point. Supporting a great artist and a great person is the point.

That's how you don't get 'burned' with Kickstarter. It isn't a store. It isn't a pre-order.

Yeah. That's your attitude towards KS though, not everybody's.

weeble1000 wrote:
That's how you don't get 'burned' with Kickstarter. It isn't a store. It isn't a pre-order.

Except BF were upfront about the Dust KS being a pre-order. Everybody involved knew it wasn't supposed to fund anything, other than to allow BF to pay off its outstanding debt to DS, apparently.

What makes me scratch my head is the fact that so many people chose to pre-order the game through an unreliable platform, risking non-delivery, instead of simply doing it through a respectable online store.

 -DE- wrote:

weeble1000 wrote:
That's how you don't get 'burned' with Kickstarter. It isn't a store. It isn't a pre-order.

Except BF were upfront about the Dust KS being a pre-order. Everybody involved knew it wasn't supposed to fund anything, other than to allow BF to pay off its outstanding debt to DS, apparently.

What makes me scratch my head is the fact that so many people chose to pre-order the game through an unreliable platform, risking non-delivery, instead of simply doing it through a respectable online store.

Battlefront can say what it likes. It don't make Kickstarter a preorder system.

I know my view of Kickstarter isn't the same as everyone's, but I think it is both a healthier and more objectively accurate way to view crowdfunding.

KS as a whole - no. This particular "campaign" - yes.

Also - I wouldn't call not caring what happens to hundreds of one's dollars healthy. Unless one's a millionaire.

weeble1000 wrote:
Battlefront can say what it likes. It don't make Kickstarter a preorder system.

You have that backwards. If you are acting in a manner which pretty blatantly implies you are selling a product, and you accept money given in payment for that product, you are bound by consumer protection law. You don't get to turn around and say "Oh, it wasn't really a pre-order, just a request for charitable donations!" That gak does not fly.

 -DE- wrote:
KS as a whole - no. This particular "campaign" - yes.

Also - I wouldn't call not caring what happens to hundreds of one's dollars healthy. Unless one's a millionaire.

I find that once one has spent their money, it's best to care very little. All the angst and up-front work should be done long before one parts with the money, and that really applies to retail transactions as well. That way if things look odd, the person can walk away and still have their money. Going the other way, they have to wail and gnash their teeth and hope somehow they can find some way to recover what they already had at one point. Hence why KickStarter is a thing that requires a bit of faith in the company/individual involved. If you look into a campaign and find yourself unable to trust things fully, you should probably go somewhere else that offers a more immediate or secure deal.

That doesn't excuse actions such as harming a third-party to a transaction though. While I can understand BF feeling like DS has created a boondoggle for them and the brand really isn't worth it in hindsight, that doesn't mean that they can just ignore the fact that they made a deal with the backers of the KS to deliver these things. If they want to drop DS like they're hot garbage then fine, but don't involve people who have nothing to do with the contract dispute in that. If I hired a contractor to fix my house and they received sub-standard materials from a supplier, the contractor's issues with a supplier are not my concern as the end customer. The contractor needs to live up to their agreement, regardless of how difficult or unprofitable a given partner is making it. Really the only thing that I find distasteful here is using money from a third-party to strong-arm contract negotiations, though again maybe that goes on regularly behind the scenes in the marketplace and I'm just ignorant.

weeble1000 wrote:

 -DE- wrote:

weeble1000 wrote:
That's how you don't get 'burned' with Kickstarter. It isn't a store. It isn't a pre-order.

Except BF were upfront about the Dust KS being a pre-order. Everybody involved knew it wasn't supposed to fund anything, other than to allow BF to pay off its outstanding debt to DS, apparently.

What makes me scratch my head is the fact that so many people chose to pre-order the game through an unreliable platform, risking non-delivery, instead of simply doing it through a respectable online store.

Battlefront can say what it likes. It don't make Kickstarter a preorder system.

I know my view of Kickstarter isn't the same as everyone's, but I think it is both a healthier and more objectively accurate way to view crowdfunding.

That's generally how I try to look at when I back a project also, and that may be what Kickstarter initially envisioned, but legally it's the case only if a project clearly states that. Kickstarter isn't much more than a payment collection system (not too different than Ebay actually). The terms of the agreement (no matter how poorly defined) are defined by each individual project. Just like if I say I'll pay you 50 bucks to fix my car, and you say yes, and then I pay you, that's a verbal contract that can be upheld in court. It becomes harder to prove when it's not written down or details aren't clearly defined ("the 50 was only supposed to be for the muffler, not the whole exhaust system"), but a person could still take someone to court over the poorest of contracts.

With a Kickstarter project you still have the same legal recourse as you would an online store. The things that make KS more "dangerous" is that it enables people/companies to take on more than it can handle, so you have a higher degree of broken contracts for large amounts of money, and you have transactions that last more than 6 months. Most people's recourse now days is to dispute through their credit card company. It's quick and doesn't involve going to court. You can dispute KS transactions with your credit card like any other purchase, but the further in the past the transaction, the less likely they are to do it, with 6 months being the general cutoff.