Contracts form the bedrock of professional relationships, especially in industries like entertainment, where clarity on expectations and responsibilities is crucial. A recent legal dispute between the K-pop group NewJeans and their management label ADOR illustrates the legal, financial, and reputational consequences that can arise when one party fails to fulfil their duties under a contract.
The Dispute Between NewJeans and ADOR
NewJeans, a K-pop group formed under ADOR (a subsidiary of HYBE), debuted in July 2022 and achieved rapid success, even topping the Billboard 200 chart. However, in late 2024, the group sought to terminate their exclusive contracts with ADOR, citing unmet obligations and a breakdown of trust. A key issue for NewJeans was the departure of Min Hee-Jin, who had served as the group’s creative director, playing a pivotal role in shaping their image and artistic vision. The group believed her departure negatively impacted their success and artistic direction.
In response, ADOR filed for a provisional injunction in January 2025 to maintain the exclusivity of the group's contract, preventing them from pursuing independent activities. By February 2025, this legal action was extended to stop NewJeans from engaging in music production and performances without ADOR's consent.
Court Ruling and Its Implications
On 21 March 2025, the Seoul Central District Court ruled in favour of ADOR, issuing a preliminary injunction that upheld the exclusivity of the contract. The court’s decision prohibited NewJeans from undertaking independent projects under the NJZ name without ADOR's approval.
The court concluded that NewJeans had not provided enough evidence to justify the termination of the contract. Despite the group's claims of mistreatment and desire for a rebrand, the court emphasised the binding nature of the agreement, asserting that the contract’s terms should be honoured.
Consequences of Failing to Discharge Contractual Duties
The legal conflict between NewJeans and ADOR highlights the significant consequences of failing to fulfil contractual obligations:
- Legal Enforcement: The ruling reaffirmed that once a contract is made, it is enforceable unless there is a legitimate reason for termination. A party cannot simply walk away from an agreement because they are dissatisfied with the terms.
- Financial and Professional Risks: For NewJeans, being bound by the contract meant they could not explore independent opportunities, which could lead to financial setbacks and hinder professional growth.
- Reputational Damage: Both ADOR and NewJeans faced reputational damage due to the public nature of their dispute, which could undermine trust with fans, stakeholders, and future business partners.
The Importance of Communication and Transparency
The case also underscores the importance of open communication between all parties involved in a contract. If issues like the removal of a key figure or unmet expectations arise, early discussions could help resolve concerns before they escalate into legal disputes. Timely communication might have prevented this legal conflict and preserved the professional relationship between the group and the label.
English Contract Law and South Korean Contract Law: Common Principles
The NewJeans case illustrates how law operates similarly under English contract law and South Korean. Both legal systems recognise freedom of contract, meaning once parties agree to a contract, they are bound by its terms. In both jurisdictions, there is minimal protection for parties who wish to back out simply because they find the terms unfavourable. If a party voluntarily enters into a contract, they are expected to fulfil their obligations unless there are legal grounds to terminate, such as fraud or coercion.
No Relief from "Bad Deals"
The NewJeans situation serves as a reminder that in both jurisdictions, there is no automatic protection from entering a bad deal. The principle of caveat emptor (let the buyer beware) means that if a party enters a contract without fully understanding or agreeing to its terms, the law will not intervene to help them escape the agreement.
Conclusion: The Necessity of Honouring Contracts
The NewJeans and ADOR case highlights the critical importance of fulfilling contractual duties. In the entertainment industry, where timing, relationships, and public perception are vital, honouring contractual obligations is essential for business success and professional integrity. This case reinforces that even when one party feels they have entered into an unfavourable agreement, the legal system will not offer a way out unless there are valid reasons, such as fraud or misrepresentation. Contracts must be carefully negotiated and fully understood before being signed, as both South Korean and English law emphasise the binding nature of agreements once they are made.
By Gerard LeCain, Solicitor - Company Commercial Department
