Legal Review of a Service Entrustment Agreement for a Stock Information YouTube Channel

Client Information

Corporate / Business Entity

 

Case Details

The client was a company planning to outsource the production and operation of a stock information YouTube channel to an external service provider.

The scope of work included content production, channel management, viewer inquiry handling, and the collection of marketing databases.

The existing service entrustment agreement included a clause stating that the service provider would bear legal responsibility if it produced content that could be viewed as spreading false information, engaging in market manipulation, or otherwise violating unfair trading regulations.

However, in practice, the company could be involved in deciding content direction, giving production instructions, reviewing final content, or approving uploads. Therefore, it was necessary to carefully review how liability would be allocated if a Korean Capital Markets Act issue arose.

The agreement also included protective clauses for the service provider, such as restrictions on the client’s abuse of superior bargaining power, prohibition of fee reductions or payment delays, the right to refuse out-of-scope requests, and limits on damages. These provisions needed to be refined so that they could function effectively in an actual dispute.

1. Review of Liability Allocation under the Korean Capital Markets Act

Decent Law Firm reviewed whether the company’s criminal liability could be excluded simply because the agreement stated that the service provider would be responsible for the content.

The review concluded that such a clause may serve as a basis for civil compensation or indemnification between the client and the service provider. However, criminal liability cannot be transferred or waived by contract.

Accordingly, Decent advised clarifying the respective roles of the client and the service provider in content planning, production instructions, review, and upload approval.

The agreement was revised to distinguish between content created independently by the service provider and content produced based on the client’s specific instructions, while also clarifying cooperation obligations in the event of a regulatory investigation or dispute.


2. Review of DB Collection and Investment Advisory Risks

The agreement also covered the collection and management of viewer contact information.

Decent reviewed the possibility that such data could be used beyond simple inquiry handling or marketing management.

If the database were connected to individual investment consultations, paid stock recommendation services, or inducement to purchase specific stocks, the structure could raise regulatory issues under Korean financial laws.

Decent therefore advised specifying the permitted purpose of DB collection, the scope of use, prohibited activities, and responsibilities for personal data management.


3. Strengthening the Practical Effectiveness of Service Provider Protection Clauses

The existing agreement included clauses prohibiting the client from unfairly reducing or delaying service fees and allowing the service provider to refuse requests outside the agreed scope of work.

However, the clauses lacked practical mechanisms such as an objection procedure, grounds for termination, and standards for delay interest.

Decent Law Firm advised refining the fee settlement process, clarifying the standard for out-of-scope requests, and defining the scope of liability for actions taken under the client’s instructions.