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Damages (general/other)

Damages Specialist Lawyer | Damages for Unauthorized Breach of an Exclusive Contract, the Agency's Full Claim Amount Granted

The client who sought out a damages specialist attorney is the head of an entertainment agency and requested a consultation with a specialist attorney in order to claim damages against an artist under contract who had unilaterally breached an exclusive contract.

CONTENTS
  • 1. Damages Specialist Lawyer | Consultation Regarding Breach of an Exclusive Contract
  • 2. Damages Specialist Lawyer | Laws on Damages After Termination of an Exclusive Contract
    • - Rescission and Termination of a Contract: What Is the Difference?
  • 3. Damages Specialist Lawyer | Pleading Strategy to Represent the Agency
    • - The Defendant's Default: The Defendant's Disappearance and Unauthorized Departure
    • - Terms Specified in the Contract: Penalty for Contract Termination
  • 4. Damages Specialist Lawyer | Court Grants the Full Amount of the Damages Claim
    • - Litigation Regarding Breach of an Exclusive Contract, With a Damages Specialist Lawyer

1. Damages Specialist Lawyer | Consultation Regarding Breach of an Exclusive Contract

Consultation with a damages specialist attorney regarding breach of an exclusive contract

The client who sought out this firm to consult with a damages specialist attorney was the head of an entertainment agency.

Around 2021, the client, holding a high regard for the development potential of an aspiring actor (hereinafter the defendant), entered into a 7-year exclusive contract, and thereafter spared no full-scale investment in the defendant.

However, after receiving acting lessons and the like for about two years, the defendant suddenly disappeared without notice for a month, citing reasons such as a knee injury and psychological pressure.

Unlike the anxious client, the defendant kept putting off returning to the agency day after day, and eventually even avoided the client's contact regarding terminating the contract by mutual agreement, saying that it "felt threatening."

Accordingly, the client, judging that the contract could no longer be continued, proceeded with terminating the contract and separating from the defendant.

The client resolved to claim damages against the defendant, in whom he had completely lost trust, but felt at a loss about pursuing a claim for damages lawsuit on his own for the approximately 70 million won he had provided, including living expenses, grooming expenses, and acting lesson fees.

Accordingly, the client sought out and requested the assistance of this firm, which holds data on similar cases and has the expertise of attorneys who have extensive experience with claim for damages lawsuits from the company's standpoint.

2. Damages Specialist Lawyer | Laws on Damages After Termination of an Exclusive Contract

An exclusive contract between an entertainment agency and an affiliated entertainer is generally concluded in accordance with the standard contract for popular culture and arts personnel.

The agency and the affiliated entertainer may change the contents of the contract by written agreement; however, if either of the two violates the terms of the contract through intent or negligence, a grace period of 14 days may be set to demand correction of the violation.

If the violation is not corrected within the period, the other party may cancel or terminate the contract, and accordingly may file a 🔗claim for damages lawsuit.

Article 390 of the Civil Act (Non-performance of Obligation and Damages)

If an obligor fails to perform in accordance with the substance of the obligation, the obligee may claim damages. However, this shall not apply where the performance has become impossible without the intent or negligence of the obligor.

Damages specialist attorney statutes related to damages after termination of an exclusive contract
Example of the standard exclusive contract for popular culture and arts personnel. Source: Ministry of Culture, Sports and Tourism

Rescission and Termination of a Contract: What Is the Difference?

🔗Rescission and Termination of Contract both involve ending a contract and so may appear at first glance to be similar terms, but there is a difference depending on the point at which the effect arises and whether the effect continues.

Rescission of Contract

Eliminating the effect of the contract retroactively, as if the contract had never existed from the beginning

Termination of Contract

Eliminating the future effect from the point at which the intent to terminate is expressed

3. Damages Specialist Lawyer | Pleading Strategy to Represent the Agency

The damages attorney prepared a pleading strategy that could represent the client's side and established a strategy aimed at having the entire amount sought granted.

In particular, for the client who wished for a swift conclusion of the case, the attorney designed solid legal arguments and filed the complaint within three weeks of the consultation with the client.

The Defendant's Default: The Defendant's Disappearance and Unauthorized Departure

1. To engage in entertainment activities by exercising one's talent and ability

2. Not to damage the agency's reputation or credit

The above is part of the provisions of the standard exclusive contract concluded between the client and the defendant. Under these provisions, the defendant's disappearance and unauthorized departure were a clear breach of contract.

Even at the appointment with a drama director that the client had arranged with difficulty for the defendant, who wanted to become an actor, the defendant did not show up without a word of explanation, and this amounted to a significant blow to the client's reputation in the industry.

The damages specialist attorney pointed out the conduct of the defendant, who unilaterally demanded termination of the contract and then disappeared, and proved that the defendant had failed to perform the obligation through KakaoTalk message records, call recordings, and schedule screenshots, among others.

Terms Specified in the Contract: Penalty for Contract Termination

Upon reviewing the contract in question, it was found that the contract provisions specified matters related to termination of the contract.

It was specified that, where the artist terminates the contract, the artist would pay, as a penalty for breach, the full amount of all invested costs and the revenue expected over the remaining contract period (the amount obtained by multiplying the average monthly sales for the two years immediately preceding the time of termination by the number of months remaining in the contract).

The damages specialist attorney emphasized that the defendant had an obligation to pay the damages debt, and estimated the direct training activity costs.

Accordingly, using receipts and purchase agreements and the like, it was proven that approximately 70 million won had been invested for the defendant in the form of the contract deposit, acting lesson fees, living and dignity-maintenance expenses, and cosmetic procedures and care costs.

4. Damages Specialist Lawyer | Court Grants the Full Amount of the Damages Claim

Full amount of damages claimed granted following the argument of a damages specialist attorney

The court that decided this damages case recognized the defendant's nonperformance of obligations in line with the argument of the firm's damages specialist attorney, and rendered a judgment granting the full amount of damages claimed.

Submitting the defense counsel's opinion centered on the point that 'the amount in question was investment funds solely for the defendant's debut and activities,' rather than merely submitting a statement of accounts, raised the likelihood that the full amount claimed would be granted.

Although the contract provisions specified that the income expected during the remaining contract period was also to be paid as a penalty for breach, the client wished to recover only the investment funds in order to conclude the case more quickly than through other claims for consolation money, and this outcome actively reflected the client's wishes.

Litigation Regarding Breach of an Exclusive Contract, With a Damages Specialist Lawyer

A lawsuit for contract termination and damages arising from a breach by an affiliated entertainer requires consideration of the legitimacy of the grounds for termination, whether one party failed to perform its contractual obligations, the appropriate scope of the claim for damages, and the burden of proof.

Because this is an area that requires professional legal judgment, we encourage you to resolve it with the help of an experienced damages attorney with many years of experience.

This firm maintains head and branch offices throughout the country and listens to clients' accounts.

If you need a consultation regarding a claim for damages, 🔗legal consultation booking, we encourage you to proceed with one.

손해배상전문변호사 | 전속계약 무단파기 손해배상, 기획사 측 청구금액 전액 인용

This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
Unauthorized reproduction, duplication, or distribution and other copyright infringements may result in legal action under applicable laws.

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