Many Korean law firms have been willing to work in relationships based on a non-time charge flat fee or contingency basis for Korean clients. However, many of these law firms in Korea have been unwilling to work on alternative fee arrangements with non-Korean clients, because of, among other things, the requirement to represent the client in a far different manner than that of a Korean client and, also, reduced competition in the foreign-client market, because of the reality that only
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International Arbitrations in Korea under the IBA Rules
Procedural Arbitration rules are key to the efficient and effective adjudication of arbitration disputes in Korea and, also, worldwide. These arbitration rules govern and set out the framework for the arbitration process. Evidence gathering and presentation are important aspects of the above procedure, and yet, institutional and ad hoc rules that provide arbitration guidelines on other matters such as the appointment of arbitrators and the nature of award and costs are, usually, silent on this point. Advantages of such a
Continue readingAdhesion Contract in South Korea: Regulating Unfair Terms and Conditions
Adhesion Contract is a contract drafted by a party with stronger bargaining power and signed by a party with lesser bargaining power. The party that has weaker bargaining power does not have the capacity to negotiate the terms and conditions of the contract and they just adhere completely to what the party with the upper hand has to offer. In South Korea, in order to avoid such unfair one-way contract and prevent business persons from imposing unfair terms and conditions
Continue readingCalculation of Korean Hourly Wage Rate under the Minimum Wage Act of Korea
Korea’s minimum wage as per the Korean Minimum Wage Act in 2019 is determined by the Minister of Employment & Labor as KRW 8,350 per hour. The latest decisions of the Supreme Court developed a calculation standard/method for determining an hourly wage rate that is not in line with the opinion of the Ministry of Employment & Labor. In many such cases, a Ministry, simply, pushes to amend the law. This matter is important, since the standard hourly wage rate
Continue readingKorea Due Diligence for Joint Ventures, Licensing, OEMs and Buying a Korean Company
Intending to execute a joint venture agreement with a Korean company? Buying a Korean company? Licensing technology to a Korean company? OEM with a Korean supplier? Selling to a Korean company?Before going to bed with a Korean company (or individual) do a little due diligence. The motivation for this article is an article by my friends over at the China Law Blog. Due diligence in Korea is not much different than due diligence in China. However, don’t forget what is
Continue readingHow Foreign Importers Entering Korea May Prosper from the Korean Middle Class in Korea being Screwed by Inflation: Screwflation
This is an older article we posted nearly eight years ago. However, we fear the same is occurring today. Inflation may be a serious issue for Korea in the next couple of years. The Korea Times has reported that stagnant wages and food inflation is leading to “Screwflation” in Korea. This phenomenon is a potential opportunity for importers with an eagerness to directly access the market. The term Screwflation was coined by Wall Street guru Doug Kass. Kass explains the
Continue readingLiquidated Damages v. Penalties in Korean contracts
As a NY attorney, it’s a bit strange for me to read a Korean contract and see how the word “penalty” is used. In the United States (as well as other common law jurisdictions), when a contract contains a “penalty,” the clause is, often, invalidated. Korea, however, allows some “penalties” in contracts. Cutting to the chase, this is merely an issue of confusing and overlapping terminology. But since its confusing, it is worth explaining. To start with, a bit of
Continue readingTermination of Commercial Agent/Distribution Agreements in Korea: Korea’s Agent Compensation Rule
In many cases of termination of a distribution/agent agreement in Korea compensation must be paid to the commission agent. In many cases, the same rules are applied to distributors. The law on the termination of Commission Agent-type agreement is governed, mainly, by the Commercial Act of Korea and its enforcement decrees. Korea law does not facially differentiate between termination and expiration of agent/distribution agreements. The following explanation is, only, a brief overview of Korea’s Distribution/ Agency Law relating to termination of
Continue readingDistribution Agreements in Korea: Crawl before you Walk
Prior to going into any relationship with a distributor/agent in Korea, please read my post entitled: Finding a Korean Distributor: The Top 10 Things to Know Before Going to Bed with a Distributor in Korea. Please read that post in combination with this post, prior to engaging a distributor in Korea. We see too many Korean distribution and agency agreements that are merely spun U.S. or European agreements. Please have your Korean distribution agreement and all agreements you have in Korea drafted
Continue readingLiquidated (Penalty) Damages Necessary in Most Korean NDA and Non-Compete Agreements
For any company engaged in negotiations, agreements, pre-M & A due diligence, OEM outsourcing or other activities with a Korean business or individuals that may lead to you disclosing your companies intellectual property, know-how or other proprietary information, always include in your no-competition, non-use, non-circumvention and non-compete agreements a liquidated damages (Penalty Damages) clause. Without a Penalty Damages Clause – good luck in proving damages when a breach occurs. If the other party refuses to sign the clause, this is good
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