A company in Beijing signed an artist-agent contract with a Taiwan compatriot surnamed Lai, stipulating that the company would exclusively manage Lai's worldwide commercial and non-commercial performing activities.
The company later alleged that Lai had engaged in unspecified conduct that significantly diminished the artist's commercial value and disrupted the company's operations. It claimed Lai had breached the contract and filed a lawsuit seeking a penalty of 2 million yuan ($278,338).
During the proceedings, the Beijing No 4 Intermediate People's Court, recognizing the breakdown of trust between the parties and the remaining term of their contract, mediated between them. The court guided the parties in discussing whether to continue the contract and analyzed the respective faults of each party during their performance.
Taking into comprehensive consideration the performance opportunities provided by the company to Lai under the contract, as well as Lai's income obtained from fulfilling the contract, the court adjusted the contractually agreed-upon penalty for breach of contract and facilitated the development of a settlement plan. Under the court's guidance, the parties reached a settlement agreement, and Lai fully fulfilled the obligations stipulated in it.
An artist-agent contract between an agency and an artist involves multiple legal relationships such as entrustment, agency, and intermediary, and is thus an atypical contract.
Due to the personal nature of these contracts, and especially given the relatively disadvantaged position of artists early in their careers, these contracts often stipulate lengthy terms, impose numerous restrictions on artists' activities and set high penalties for breach.
However, allowing artists to unilaterally terminate contracts without bearing responsibility for their breach would violate the principle of good faith and be detrimental to the healthy development of the entertainment industry.
Therefore, when handling such cases, courts not only consider the need to equally protect the legitimate rights and interests of both parties in accordance with the law, but also guide them to uphold the values of contractual fidelity and fairness, so as to provide strong judicial support for the healthy and sustainable development of the cultural and entertainment industries.
The new court was set up as a division under the Beijing No 4 Intermediate People＇s Court, as the intermediate court has specialized in handling capital-related commercial disputes involving overseas litigants since 2018...
