If Social Distancing Level 3 is Enforced for Weddings and Accommodations, Contracts Can Be Canceled Without Penalty

Drafting Standard Contracts to Prevent 'Hadogup Gapjil' Abuse

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] When a social distancing level 3 measure is implemented due to infectious diseases such as the novel coronavirus infection (COVID-19), contracts for venues such as wedding halls can be canceled without penalty fees.

On the 2nd, the Fair Trade Commission introduced 17 major systems that will change from this year, divided into four areas.

If subcontract payment interest is delayed, prior agreement between principal and subcontractor required

[Image source=Yonhap News]

First, the requirements for applying for adjustment of subcontract delivery payments will be relaxed. Until now, even if applied through a small and medium enterprise cooperative, one had to wait 60 days after the contract was signed, but this waiting period will be eliminated.

In case of delayed interest, prior agreement between the principal and subcontractor businesses is required. If subcontract payments are unfairly reduced, the subcontractor can claim payment.

To this end, the Fair Trade Commission revised or newly established standard contracts for eight industries including construction, machinery, pharmaceutical manufacturing, automobile, electrical, electronics, defense, and elevator installation works.

To reduce habitual subcontract violations, the Fair Trade Commission will notify related ministries of the list of offenders, and when the ministries take action, the details of the measures will be disclosed.

Protecting small business owners hit hard by COVID-19... Convenience stores can terminate contracts without penalty if business fails in the first year

A protection plan for franchise, distribution, and agency small business owners hit hard by COVID-19 was presented.

First, convenience stores, laundry businesses, and automobile repair franchises can terminate franchise contracts without penalty fees if they fail to achieve the sales target set by headquarters within one year of opening.

Standard agency contracts were newly prepared for six industries including furniture, book publishing, boilers, home appliances, petroleum distribution, and medical devices.

The contracts specify minimum contract periods (for example, 4 years for medical devices) and risk-sharing criteria in crisis situations such as COVID-19.

Unfair trade review guidelines specify criteria to prevent online shopping malls from unreasonable returns and shifting promotional costs.

If social distancing reaches level 3, contracts for wedding halls, etc. can be canceled without penalty fees

As the new variant of the coronavirus (COVID-19) originating from the UK spreads, triggering emergency responses in countries worldwide, officials are seen disinfecting the arrival hall at Terminal 1 of Incheon International Airport on Yeongjongdo Island on the afternoon of the 29th last year. (Image source=Yonhap News)

When social distancing level 3 measures are implemented due to COVID-19, consumers can cancel contracts without penalty fees in five industries: weddings, travel, airlines, accommodations, and dining.

The validity period of mobile gift certificates is set to at least one year, and businesses are required to notify consumers as the expiration date approaches.

Additional delivery charges for remote island and mountainous areas must be mandatorily displayed from the product information provision stage.

Rewards given for reporting disguised affiliates of large corporations

Regulations on unfair internal transactions by large corporations will also be strengthened. The Fair Trade Commission plans to revise the Enforcement Decree of the Fair Trade Act in the first half of the year to provide rewards for reporting large corporate groups that omit domestic affiliates.

However, corporate defense rights will be guaranteed. Legal procedures will be strengthened, such as mandating the issuance of official documents during on-site investigations by the Fair Trade Commission.

Additionally, on-site investigations will generally be prohibited during the review stage. Access to materials secured by the Fair Trade Commission related to dispositions will be allowed in a limited manner.

This content was produced with the assistance of AI translation services.