In Korea, contracts are agreements that are legally binding and enforceable 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 Korea, is an agreement between two or more parties to create, modify, or terminate obligations that are legally enforceable. To constitute a legally enforceable contract in Korea, there must be:
- 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 contract between the parties.
- Legal capacity: It is imperative that the parties possess the legal capacity to enter into a contract. This requires the parties to meet the legal age requirements
- 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.
- Consideration: Consideration is not a prerequisite for the enforcement of a contract in Korea. However, courts may consider like 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 and no detriment to that party is looked on with suspicion by Korean courts.
- 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. Also, specific laws and regulations may govern certain types of contracts, such as employment or real estate agreements and, thus, may limit the “freedom of contract.”
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