The Fair Trade Commission of Korea (FTC) created a sample standard-form Exclusive Agent Agreement for Entertainment Agreements, in Korea, that was, recently, challenged by the Chinese Band Twin Duo “Tasty.”
The Chinese band filed a lawsuit against the Korean entertainment company – SM C&C – in order to invalidate a 7-year exclusive agent agreement – claiming that because of major differences with the Korean entertainment company, the relationship between the parties was frustrated. SM utilized a standard-form agency agreement that was developed by the FTC.
In 2015GaHab19327, the Seoul Central District Court ruled, among other things, that:
- The FTCs standard-form agency agreement is presumptively valid in the entertainment business in Korea. The Seoul Central District Court, further, noted that the intent of this exclusive agreement was not to bind the entertainers to long terms, thus, the FTC made the standard-form exclusive agency agreement term at seven years in order to protect entertainers.
- The court, also, noted that the liquidated damages clause, in the agreement, was valid, since it was difficult to ascertain the actual damages and the liquidated damage sum was not, on its face, excessive.
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- Liquidated Damages vs. Penalty Damages: Korean Contract Law Basics
- Distribution Agreement in Korea: Factors to Always Keep in Mind
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