Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract)

Posted by Joseph Hwang Joseph Hwang 8/03/2024

Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract) - Part 12.

Joseph Hwang

* Attention: This article is based on the latest version of the “Standard Form of Exclusive Contract for Musicians (hereinafter referred to as “SFEC,” Notice No. 2024-0021, Ministry of Culture, Sports and Tourism of the Republic of Korea, amended on June 3, 2024).”

** Contract parties: Artist (hereinafter referred to as “Artist”) and artist management company (hereinafter referred to as “Company”)

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Article 11 (Response to Infringement)

Suppose a third party infringes the rights outlined in Articles 8 to 10. In that case, the Company shall take measures to eliminate such infringement at its responsibility and expense, and the Artist shall cooperate with the Company’s measures to eradicate such infringement.

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The SFEC stipulates that the Company will respond to the illegal behavior on behalf of the Artist when a third party infringes on the Artist’s inherent rights. The Company earns revenues by providing the Artist’s pop culture art services to third parties based on the Artist’s rights. SFEC enables the Company’s business on behalf of the Artist to be protected by law. The basis for the Company’s revenue is the Artist’s rights, and the Company exercises its exclusive rights by the delegation and representation of the Artist’s rights through the contract.

However, if a third party interferes with the performance of the Company’s rights or infringes the Company’s rights through illegal acts, the Company and the Artist will suffer economic damages, in addition to defamation. The Company shall take legal action on behalf of the Artist to recover the infringed rights or damages caused at this time. The basis for this is the delegation and representation of rights between the Artist and the Company, and a contract such as SFEC is the legal origin.

Several issues should be considered when the Company takes action to recover rights. While the relationship of delegation and representation requires legal action against the infringing third party, whether the cause of action allows the Company to take unilateral legal action against the third party on behalf of the Artist should be determined on a case-by-case basis. For example, the Company should be limited to taking legal action on behalf of the Artist due to a breach of the Artist’s personality rights. This is because personality rights are not legally assignable or transferable. This is legally known as “locus standi.” Although being the contract between the Company and the Artist, in some cases, the Company needs to prove that it has standing to sue the third party on behalf of the Artist. The Company cannot take legal action directly under unattainable conditions; the Artist should file a lawsuit against the third party alone with assistance from the Company only.

Therefore, on a case-by-case basis, the Artist and the Company should cooperate to ensure that the legal requirements to recover rights are furnished. In particular, legal action is often costly, and legal fees, such as attorneys’ fees, may later be subject to deductions from revenue in the Company’s and Artist’s profit share. The Company and the Artist should agree upfront precisely how the costs of legal action will be settled.

* Standard contract analysis continues in the series.

** References and Quotations:

https://www.mcst.go.kr/kor/s_data/ordinance/instruction/instructionView.jsp?pSeq=2413

Series Articles

Overview

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management.html

Part 1.

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management_26.html

Part 2.

https://www.musicbusiness.co.kr/2024/06/structure-of-exclusive-management.html

Part 3.

https://www.musicbusiness.co.kr/2024/06/structure-of-exclusive-management_16.html