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MCN agencies (Multi-Channel Network) claim that they can help you with "account incubation", "follower growth" and "monetization". However, once disputes arise out of cooperation, the minor consequence is deduction of your earnings, while the severe one is being saddled with exorbitant liquidated damages. This article will continue to inform you of the legal pitfalls that require your utmost vigilance throughout the entire process of contract signing, contract performance and contract termination, and provide practical response strategies.

III. Who Shall Be Liable for "Failure to Meet Performance Targets"? The Liability Shall Not Be Imposed on You Alone!

Case Review Company A entrusted Company B (an MCN institution) to carry out live-stream e-commerce sales activities. As the sales volume fell short of expectations and Company B was penalized by the platform for regulatory violations, Company A filed a lawsuit against Company B. The contract only contained an ambiguous stipulation that "comprehensive services shall be provided".

Court Judgment: Company B loses the case and shall pay liquidated damages.

Grounds: As professional institutions, MCNs shall assume more obligations (such as rule training, script review and exception handling), and shall not transfer all risks to their cooperating parties.

Cooperation Guide ✅ The contract must specify the obligations of MCNs in detail, for example:

• How many legal review sessions for live streaming scripts are provided each month?

l Whether dedicated personnel are assigned to follow up on and handle changes to platform rules;

l In the event of abnormalities such as traffic throttling and content removal, the MCN shall assist in filing an appeal within 24 hours.

• Confidentiality Obligations for Information Concerning Business Cooperation and Commercial Orders

✅ Performance appraisal shall be reasonable: Absolute indicators such as "guaranteed minimum sales" (which are largely subject to the influence of the market and platform algorithms) shall be avoided;

The parties may stipulate that "the completion of basic tasks shall be deemed as meeting the required standards", instead of applying the result-only assessment criterion.

【Negotiation Skills】The MCN shall be required to list the *Service List* as an annex to the contract to prevent the "free support" from becoming an empty promise.

IV. Difficulty in Contract Termination? The Court May Rule in Your Favor Under a Contract Deadlock! Case Review After Xiao C entered into the contract, the MCN compelled him to switch to an inappropriate live streaming platform. Xiao C refused and put forward a request for contract termination, following which he was demanded to pay a large sum of liquidated damages.

Court Judgment: The contract is rescinded; Xiao C shall only compensate the MCN for its actual losses, with the compensation amount far lower than the liquidated damages stipulated in the contract.

Grounds: The two parties have fallen into a contract deadlock, and the continued performance of the contract is manifestly unfair to Xiao C.

Cooperation Guide ✅ Prevent "deadlock" at the time of contract execution: 1. Clearly stipulate: Circumstances under which the contract may be terminated without liability (e.g. MCN fails to provide operational support for two consecutive months);

l Restrict the right of MCN to unilaterally designate or replace platforms;

l Liquidated damages shall be linked to your actual gains, e.g., "shall not exceed three times the average income over the preceding six months".

✅ In the event of a deadlock: l Do not suspend broadcasting without authorization; issue the *Letter of Negotiated Contract Termination* first.

l Retain evidence of MCN's breach of contract (e.g. failure to make payment, failure to provide services);

Initiating a lawsuit proactively to claim "termination of the contract + reduction of liquidated damages" is more advantageous than passively responding to a lawsuit.