"Corrugated Board Processing Industry Also Establishes Standard Contract"... Fair Trade Commission Revises Standard Subcontract Agreement

[Asia Economy Reporter Eunju Lee] Standard subcontract agreements will also be distributed in the corrugated cardboard processing industry and the fastener (metal bolts and nuts as manufacturing accessories) manufacturing industry.

The Fair Trade Commission announced on the 29th that it has established and revised standard subcontract agreements for 18 industries. The standard subcontract agreement is a contract established and distributed by the Fair Trade Commission to set balanced transaction conditions between the original business operator and the subcontractor, and it is currently distributed in 50 industries. In response to requests from related industries, the Fair Trade Commission newly established standard subcontract agreements for the corrugated cardboard processing industry and the fastener manufacturing industry, and revised standard subcontract agreements for 16 industries including the shipbuilding industry.

The standard contracts for the 18 industries newly include a provision that requires the signing of a confidentiality agreement when providing technical data. Reflecting the delivery price linkage system, which is scheduled to be legislated through the amendment of the Win-Win Cooperation Act, the contracts allow for the inclusion of subcontract payment linkage conditions according to major raw material price fluctuations. Additionally, it is stipulated that subcontractors may stop work if a serious accident occurs or is likely to occur during the work.

The newly established standard subcontract agreements for the corrugated cardboard processing and fastener manufacturing industries include provisions to narrow the subcontractor’s liability for damages occurring during the delivery process of the subject matter. If the original business operator does not receive the subject matter, the subcontractor is only liable for damages caused by intentional or gross negligence, and losses and management costs due to delays are borne by the original business operator. It also specifies that if the original business operator delays inspection without justifiable reasons, the subject matter is deemed to have passed inspection 10 days after the delivery date.

The Fair Trade Commission stated, “We focused on preventing damages to subcontractors considering unfair subcontracting practices identified through feedback from related industries,” and added, “We will cooperate with business associations in the relevant industries to ensure that the newly established and revised standard subcontract agreements are more widely utilized.”

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