Participation of Small and Medium Enterprises in the Establishment and Revision of Standard Agreements... "Preventing Unfair Trade Contracts"

On the 24th, the Cabinet approved the amendment to the Win-Win Cooperation Act

From now on, small and medium-sized enterprises (SMEs) will be able to directly participate in the establishment and revision of standard agreements.

Deputy Prime Minister and Minister of Education Lee Ju-ho (right) and Minister of SMEs and Startups Lee Young are entering the Cabinet meeting held at the Government Seoul Office in Jongno-gu, Seoul, on the morning of the 24th.
[Photo by Yonhap News]

The Ministry of SMEs and Startups announced that the amendment to the "Act on the Promotion of Mutual Cooperation between Large and Small Businesses," which clarifies the grounds for establishing, revising, and recommending the use of standard agreements related to consignment and subcontracting transactions, was approved at the Cabinet meeting on the 24th.

The amendment stipulates that the Minister of SMEs and Startups can establish, revise, or designate standard agreements and recommend their use. It also allows consignment or subcontracting companies or SME organizations to prepare drafts for the establishment or revision of standard agreements and request review from the Minister of SMEs and Startups.

Furthermore, when establishing or revising standard agreements, it is mandatory to hear the opinions of the related parties in the transaction field, such as consignment or subcontracting companies or SME organizations, and grounds have been included to appoint and operate advisory committee members for the establishment and revision of standard agreements.

The amendment will be fully implemented one year after its promulgation. Subordinate laws and regulations will be organized ahead of the system implementation.

Jeong Gi-hwan, the Policy Officer for Mutual Cooperation at the Ministry of SMEs and Startups, said, “This amendment to the Mutual Cooperation Act will serve as an opportunity to prevent unfair trade contracts and establish a sound transaction order.” He added, “In particular, as the procedure for direct participation and reflection of opinions from transaction parties in the process of establishing and revising standard agreements is institutionalized, it is expected that standard agreements that reflect the characteristics of industries and the realities of companies can be created and disseminated.”

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