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

Posted by Joseph Hwang Joseph Hwang 8/09/2024

Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract) - Part 18.

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 20 (Supplemental Agreements)

① The Company and the Artist may enter into a Supplemental Agreement to complement the contents of this Agreement or to stipulate the provisions not regulated in this Agreement.

② In the case that the Artist provides popular culture art services as a member of a group, the provisions of Articles 8 through 10 may be set forth in a separate agreement.

③ The Supplemental Agreement under Paragraph ① shall be limited to the extent that it does not contradict or violate the contents of this Agreement.

④ The “Youth Popular Culture Artist (or Trainee) Standard Supplemental Agreement” under Article 19, Paragraph ④ is an exception to Paragraph ③ and shall take precedence over this Agreement.

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The SFEC provides standards to minimize illegal or unfair agreements between Companies and Artists in exclusive contracts. However, the standard form is often insufficient, as the contract parties need more commitments and promises than expected, so a Supplemental Agreement between the Company and the Artist is applied to the SFEC mutatis mutandis. In many cases, the most critical details are stipulated in the Supplemental Agreement thereof.

Despite this, when an Artist is required to act as a member of a group, it is necessary to consider equity with the other members, and sometimes, the primary rights of the Artist need to be supplemented or amended to suit the characteristics of the group’s activities. In such cases, Artists should avoid entering into agreements that deviate too far from the SFEC rules and harm or reduce their interests. Articles 8 through 10 of the SFEC determine how the Artist’s core values should be handled during the contract. As much as possible, the Artist should be wary of agreeing to anything that significantly diminishes the Artist’s interests or is out of proportion to the rights guaranteed to the Artist by law.

Paragraph ③ of this clause establishes the priority of legal effect and validity of the SFEC if the Supplemental Agreement that is subordinate to the SFEC contradicts or violates the original contract, the SFEC Regulations. In general, since the Supplemental Agreement is recognized as a more special contract than the original contract, the priority of the legal effect of the additional Agreement is recognized as the Supplemental Agreement; however, this clause means that the SFEC is the minimum legal contract content set by the government, so the legal effect must be based on the standard contract to preserve the meaning of establishing the standard contract. Even if the parties agree to prioritize the effectiveness of the contract in the Supplemental Agreement, this clause is a crucial contractual provision that can prevent unfair contracting.

In addition, Article 4 establishes the priority of effectiveness if the contracting party is a youth Artist and needs to enter into a standard supplemental agreement established by the Korean government for youth Artists and youth trainees. In this case, the legal effect of the Standard Supplemental Agreement for Youth Artists takes precedence. The fact that the Korean government has established a standard contract suggests that the K-pop and entertainment industries are likely to lose equity and fairness in private contracting. Business is complex, and relationships are challenging to establish in an industry that deals with people with real personalities. The K-pop industry will be able to develop further if it pays close attention to the law and equity.

* This article is the last content of the series in the Standard Contract Analysis.

** 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