The Higher Regional Court of Celle in Germany recently ruled on the question whether fashion model agency contracts are so-called “contracts of higher nature” according to German Civil Law with the consequence that the model could more easily terminate the contract. The company in question concluded an agency contract with an 18-year old fashion model to provide her with promotion of her work and development of her talent in return for a commission.
Model agencies like these are responsible for booking, billing, and eventually paying the models for their time. By handling the details, an agency allows a model to focus on modelling and not on the business end.
The agency contract was limited to five years and was to be renewed for two years at a time if it was not terminated at least nine months before expiry. The model terminated the contract after a term of about six years and refused to make further payments to the agency thereafter.
The issue in question: was she allowed to do that? According to § 627 BGB (German Civil Code), a contract on services can in principle also be terminated without good cause and without observing a notice period if it is based on a special position of trust and involves services of a “higher nature”. Such services of a higher nature can be those, which require special expertise, skills or scientific education or which concern the personal sphere of life. The law intends to cover activities that require academic training and are characterised by a particularly qualified occupational profile. This rule commonly applies to contracts with lawyers or doctors, but the Court decided that it also applies for an artist’s agency, since it supports and provides for the models with its special expertise and contacts and is thus in a similar position of trust.
By agreeing on a fixed contract period, the parties have excluded this non-binding rule of 627 BGB. Unluckily – for the agency – though, this exclusion was done in a pre-formulated contract, which is subject to a stricter control of general terms and conditions. Clauses in such general terms and conditions that unduly disadvantage one party can be invalidated by a court.
The long-term promotion of artists’ careers could justify excluding the possibility of termination for a certain period of time because initial investments only pay off as the career develops. However, if the agency’s performance did not meet the model’s expectations, the model would in fact have no possibility to change agencies over a long period of time. In the judges’ opinion, this would be all the more serious because the business opportunities for models shrink with increasing age. Therefore, the court saw a disadvantage in excluding the rule of § 627 BGB in this long-term contract, which led to the result that the model was in fact allowed to terminate the contract earlier than the contractual clauses permitted.
Source: Higher Regional Court Celle, judgement of April 1st 2021 – 13 U 10/20