Key Guide to the Standard Exclusive Contract for Popular Culture Artists

Contracts

Key clauses in the standard exclusive contract issued by the Fair Trade Commission — maximum contract term, settlement method, right to access records, ban on improper expense deductions, termination, and penalties.

1. Maximum Contract Term

The standard exclusive contract for singers sets the contract term so that it does not exceed 7 years. After 7 years, the contract may be renewed only by mutual agreement, and a unilateral automatic-renewal clause may be challenged as invalid. For clauses that exclude periods when the artist cannot work, such as military service or illness, check whether the reasons and periods are specified in detail.

2. Earnings Settlement Method

The settlement schedule and revenue-sharing percentages must be specified in the contract.
The contract must also state which expenses are deducted from revenue before it is divided, and in what order (deduction items and order). Even with the same percentages, the actual income can vary greatly depending on how deductions are handled.
The agency must keep documents supporting the settlement and provide them if the artist requests them.

3. Right to Request Access to Settlement Records

Artists may request access to and copies of documents supporting the settlement, such as revenue and expense details. The Popular Culture and Arts Industry Development Act (a law governing the development of the popular culture and arts industry) also requires agencies to maintain accounting transparency. Refusing without a reasonable reason may lead to a dispute.

4. Preventing Improper Expense Deductions

Expenses incurred without the artist’s consent, as well as expenses unrelated to the work, may not be deducted from the settlement. Pay particular attention to clauses that unilaterally charge training or accommodation costs after the fact.

5. Termination and Penalties

The contract must specify what breaches allow termination and the period allowed to remedy them, for matters such as unpaid settlement amounts or being forced to take part in activities unfairly.
If penalties or damages are set at a high amount regardless of the actual loss, the clause may be excessive. If the calculation formula is complicated, consult an expert before signing.

6. Pre-Signing Checklist

Is the standard exclusive contract form being used, and which clauses have been changed?
Are the contract term and renewal conditions clear?
Are the revenue-sharing percentages, settlement schedule, deduction items, and method for providing records stated?
Are the termination grounds and penalties fair to both parties?
If you are a minor, is there consent from your legal representative and a supplementary agreement for minors?
Be sure to get a copy of the contract and consult an expert before signing.

Source: 공정거래위원회

Translated from Korean by AuditionPass. The Korean original is authoritative.

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