[1] The meaning of "exclusive management agreement" and the standard for determining its legal nature

[2] Where Gap, an artist, entered into an exclusive agreement with Eul to delegate the management work related to Eul's entertainment activities to Eul, and subsequently Gap terminated the exclusive agreement on the ground of damage to trust relationship, the case holding that the legal nature of the exclusive agreement constitutes a bearer contract similar to the delegation, and that Gap may terminate the exclusive agreement when the trust relationship between the parties to the agreement is broken out

[3] In exceptional cases where the court has an obligation to accept an application for resumption of pleadings by the parties, and to resume pleadings

[1] The term “exclusive management contract” refers to a contract with the main content that an affiliated company or manager provides an artist with the services related to the management of entertainment business, and an artist bears the obligation not to engage in entertainment activities directly or through a third party only through his/her affiliated company or manager. The legal nature of the contract ought to be determined by specifically examining various circumstances, such as the purpose of the contract in question, the content and nature of the obligation borne by the parties concerned, the status and nature of the parties concerned, the difference in personal guidance, negotiating power, the difference in remuneration or the method of distributing profits.

[2] Where Gap, an artist, entered into an exclusive agreement with Eul to delegate the management work related to Gap's entertainment activities to Eul, and subsequently Gap terminated the exclusive agreement on the grounds of damage to the trust relationship, the case holding that since the above exclusive agreement basically aims to entrust Eul with the management work of entertainment activities to the other party and faithfully perform the management work related to Gap's entertainment activities, the contract's nature, which is basically established by one party's entrustment to the other party and the other party's consent, should be paid 50% of the remainder after deducting all income generated in relation to entertainment activities from Gap's entertainment activities in return for the management of affairs, and it is distinct from the typical delegation contract, such as the payment of exclusive fee to Gap, and thus, the legal nature of the exclusive agreement cannot be deemed as a typical delegation contract under the Civil Act, and thus, it cannot be deemed that the contract's existence of the trust relationship between the parties to the above exclusive agreement cannot be deemed as being an exclusive contract that is contrary to the trust relationship, and thus, it cannot be viewed that the above exclusive agreement cannot be terminated at any time because it is an inevitable and significant reason for the parties to terminate the above exclusive agreement.

[3] Where a party has filed an application for resumption of pleadings to submit arguments and certifications after the closing of pleadings, the issue of whether to accept the application is subject to the court’s discretion in principle. Cases where the court is obligated to resume pleadings and proceed with hearings are limited to cases where a judgment against the party without providing the party an opportunity to submit arguments and certifications is contrary to procedural justice pursued by the Civil Procedure Act. This constitutes cases where the party who filed the application for resumption of pleadings was unable to properly have the opportunity to submit arguments and certifications due to the circumstances for which it is difficult for him/her to be responsible before the closing of pleadings, and where the subject of arguments and certification constitutes facts requiring proof

[1] Article 680 of the Civil Code / [2] Articles 543, 680, and 689 of the Civil Code / [3] Article 142 of the Civil Procedure Act

[3] Supreme Court Decision 2010Da20532 Decided October 28, 2010 (Gong2010Ha, 2157)

Plaintiff (Law Firm Space, Attorneys Park Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Chang-gu et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2016Na2027557 decided August 17, 2017

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Whether the exclusive agreement of this case is revoked

The lower court determined that the Plaintiff could not be deemed to have induced the Defendant or entered into the instant exclusive agreement due to the Defendant’s mistake. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, without exhaust all necessary deliberations,

2. The reference point for termination and settlement of the instant exclusive agreement

A. An exclusive management agreement refers to a contract with the main content that an affiliated company or manager provides services related to the management of entertainment business of an artist, and an artist is obligated to perform entertainment activities only through his/her affiliated company or manager and not to perform entertainment activities directly or through a third party. The legal nature thereof must be specifically examined and determined by specifically examining various circumstances, such as the purpose of the relevant contract, the content and nature of the obligations borne by the parties concerned, the status and nature of the parties concerned, the difference in their personal guidance and negotiating power, the difference in remuneration or the method of distributing profits.

In light of these legal principles, the following conclusions may be derived from the facts duly admitted by the court below. The main contents of the instant exclusive agreement are that the Plaintiff faithfully performs the duties of management related to entertainment activities by delegation from the Defendant. Thus, one party has the nature of delegation contract formed by one of the parties to entrust the other party with the management of affairs and the other party to consent thereto. However, the Plaintiff, who is in charge of entertainment activities, received all incomes generated in relation to entertainment activities in return for the performance of affairs, received them in return for the management of affairs, and paid 50% out of the remainder after deducting the expenses, and the Defendant paid the exclusive fee to the Defendant on a specified day of every month. Accordingly, the legal nature of the instant exclusive agreement is distinct from the typical delegation contract stipulated in the Civil Act, such as the payment of the exclusive fee to the Defendant. Therefore, the legal nature of the instant exclusive agreement cannot

B. Considering these circumstances, the instant exclusive contract, unlike the delegation contract under the Civil Act, has a strong interest with respect to its existence, and thus, the Defendant, an artist, cannot terminate the contract at any time. However, in light of the fact that the instant exclusive contract basically has the nature of the delegation contract, it is not deemed that the contract can be terminated only when there is a serious reason for not expecting the existence of the contract.

In order to achieve the purpose of the instant exclusive agreement by its nature, it is essential to maintain a high level of trust between contracting parties, and the obligation of the Defendant, an artist, pursuant to the instant exclusive agreement, cannot be substituted by any other person. Coercive performance of the obligation to perform exclusive activities against an artist, on the ground that the trust relationship between the parties is broken, does not constitute a serious reason for not being able to expect the continued existence of the contract, would result in excessively infringing on the artist’s personality rights. Therefore, if the trust relationship between the parties to the instant exclusive agreement is broken, the Defendant, an artist, can terminate the instant exclusive agreement.

C. The lower court determined as follows with respect to the termination of the instant exclusive agreement. The Plaintiff committed an act that may infringe on the Defendant’s personality right, such as having the Defendant drive the Defendant, who is a minor female, even though his/her mother was indicted on suspicion that he/she had raped with the Defendant. On or after January 2, 2014, as the de facto trust relationship between the original Defendant was destroyed, the Plaintiff was unable to engage in entertainment activities for the Defendant, and the Defendant was also engaged in entertainment activities separate from the Plaintiff, and filed a criminal complaint in the process. The Defendant terminated the instant exclusive agreement on the grounds that the trust relationship with the Plaintiff was destroyed on or around June 17, 2014, was lawful, and thus the instant exclusive agreement was terminated.

Although the reasoning of the lower judgment is inadequate, the conclusion that the instant exclusive agreement constitutes a bearer contract similar to delegation, and that the instant exclusive agreement was terminated and terminated on June 17, 2014 is acceptable. In so doing, the lower court did not err by failing to exhaust all necessary deliberations, exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, violating the principle of pleading, or misapprehending the legal nature of the instant exclusive agreement and the legal doctrine on the termination of the contract, thereby adversely affecting the conclusion of the judgment.

3. Calculation of settlement amount, return of unjust gains, offset defenses;

The lower court acknowledged that the Defendant’s settlement amount unpaid to the Plaintiff is KRW 190,862,460, and subsequently rejected the Defendant’s defense that the Plaintiff offsets the Plaintiff’s claim against the Plaintiff’s claim for damages or for return of unjust enrichment. In addition, the lower court determined that the Defendant was liable to return KRW 117,026,279, which the Plaintiff spent for the Plaintiff’s entertainment activities to the Plaintiff as unjust enrichment. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not exhaust all necessary deliberations and did not err by exceeding the bounds of

4. Whether the obligation to resume pleadings has been violated;

In principle, where a party has filed an application for resumption of pleadings to submit arguments and certifications after the closing of pleadings, the issue of whether to accept the application shall be subject to the court’s discretion. Cases where the court is obligated to resume pleadings and continue hearings are limited to cases where a judgment against the party without granting the party an opportunity to submit arguments and certifications is contrary to procedural justice pursued by the Civil Procedure Act. This constitutes cases where the party who filed the application for resumption of pleadings has not been properly given an opportunity to submit arguments and certifications due to the circumstances for which it is difficult for the party to be held responsible before the closing of pleadings, and where the subject of the allegation and certification constitutes facts requiring proof as much as the subject of the judgment depends on the outcome of the judgment (see Supreme Court Decision 2010Da20532, Oct. 28,

Examining the record in light of the above legal principles, it is difficult to view that there was an exceptional circumstance under which the lower court should resume the pleading and continue the hearing, on the grounds that the Defendant was unable to be held liable prior to the closing of argument, and that the Defendant was unable to have been given an opportunity to submit arguments and certifications, and that the subject of its assertion and certification constitutes a major fact of proof to the extent that the judgment would depend on the outcome of the judgment. Therefore, the lower

5. Conclusion

The Defendant’s appeal is dismissed as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-won (Presiding Justice)