Valid and Enforceable Korean Contracts: Korean Contract Law Basics

In Korea, contracts are legally binding and enforceable agreements under the law. They can be created for a wide range of purposes, such as employment, real estate, intellectual property, and commercial transactions.

A contract, in South Korea, is an agreement between two or more parties that creates, modifies, or terminates legally enforceable obligations. To constitute a legally enforceable contract in Korea, there must be:

1. Mutual consent: Both parties must agree to the terms and conditions of the contract. This can be achieved through an offer and acceptance (“Meeting of the Minds”). As in common law jurisdictions, the first element of a valid and enforceable contract is an offer. In Korea, as in much of the world, the offer must be a specific and detailed expression of the offer. Acceptance of the offer, without modifications or caveats, is deemed an acceptance of the contract and, thus, a valid and enforceable agreement between the parties.
2. Legal Capacity: The parties must possess the necessary legal capacity to enter into a contract. This requires the parties to meet the legal age requirement and be of sound mind.
3. Object: A contract must have a specific and lawful objective. In other words, the purpose of the contract must not contravene any laws or public policies established in Korea. Thus, a contract for the illegal sale of opioids is not an enforceable contract in Korea.
4. Consideration: In Korea, consideration is not a prerequisite for the enforcement of a contract. However, courts may consider similar issues in determining if the parties mutually consented to the contract or a party was deceived in the execution of the contract. Thus, a one-sided contract that imposes obligations on one party without any detriment to that party is viewed with suspicion by Korean courts.
5. Form: To be enforceable in Korea, a contract does not need to be in written form, and in most types of relationships, Korea has no requirement for an agreement to be in writing for an agreement to be enforceable.

It is important to highlight that certain contracts in Korea require specific formalities for enforceability. Additionally, specific laws and regulations may govern certain types of contracts, such as employment or real estate agreements, thereby limiting the “freedom of contract.”

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Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients with their contentious, non-contentious, and business development needs, and is regularly quoted by leading media sources on Asia’s legal and business issues. Sean is rated a Top 100 attorney, and his firm was rated a top dispute resolution law firm in Korea.   

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at: Schedule a Call with Attorney Sean Hayes.