Recently, the second-instance trial of the contract dispute case between CAI Shaofen (the “Plaintiff”) and Zhou Liu Fu Jewelry Co., Ltd. (hereinafter referred to as "Zhou Liu Fu") over the overdue use of portrait for advertising was concluded. Neither of the two instances courts supported CAI Shaofen's sky-high claim of 9.3 million yuan for breach of contract. Unitalen represented Zhou Liu Fu and won the case.

Case Brief

(I) Demands of the opposing party

The Plaintiff alleged that Zhou Liu Fu failed to "withdraw or recall the plaintiff's name and portrait", which constituted a serious breach of contract, and demanded that Zhou Liu Fu cease the infringement and pay compensation of 9.3 million yuan in overdue usage fees and other damages.

(II) Facts of the case

1. Both parties agreed that during the period from December 1, 2017 to November 30, 2019, CAI Shaofen would serve as the brand ambassador of Zhou Liu Fu Jewelry, and agreed that within 2 months (before January 31, 2020) after the expiration of the agreed period, Zhou Liu Fu shall withdraw or recall relevant campaigning materials containing the plaintiff's name and portrait.

2. Zhou Liu Fu signed a contract with a new ambassador in June 2019, and officially launched the promotion for the new endorsement in August 2019. However, evidence collected by the Plaintiff shows that although the brand ambassador displayed on the homepage of Zhou Liu Fu's official website after the expiration of the original contract (CAI Shaofen being the ambassador) is not the plaintiff CAI Shaofen, relevant contents containing her name and portrait are still displayed after searching for her name, with the release time falling with the contract use period. As a result, CAI Shaofen alleges that Zhou Liu Fu has committed a serious breach of contract and should compensate her for the overdue usage fees.

(III) Decision of the court

The court of the first instance ruled that Zhou Liu Fu shall withdraw the contents involving CAI Shaofen and pay the opposing party an appropriate amount of 20,000 yuan as attorney fees, while rejecting the rest of the claims, that is, the court did not support any "overdue usage fees" or compensation for breach of contract claimed by CAI Shaofen. CAI Shaofen was not satisfied with the ruling and filed an appeal. The court of the second instance rejected the appeal and upheld the original judgment.

Typical Significance

The court employed a dual standard of "contract interpretation" and "factual judgment" in the determination of liability, and this case further clarified the method to analyze the amount of compensation. The court held that upon the termination of the endorsement relationship, WeChat official account posts, Weibo posts, and other We-media articles published during the endorsement period and still remaining after the termination of the endorsement should be deleted as stipulated in the contract. However, the failure to delete such contents does not constitute a serious breach of contract, and thus CAI Shaofen's claim for compensation for breach of contract was not supported. This judicial approach effectively balanced the interests of both the brand and the ambassador, representing a new development in the dispute case of advertising endorsement.