A recent amendment of the Korean Civil Procedure Act added Article 217-2 came into effect. The Amendment to the Civil Procedure Act of Korea has codified a holding by the Seoul Central District Court and other Korean courts noting, in part, that Korean Courts may refuse to “recognize foreign damage awards that clearly exceed amounts considered reasonable in Korea in violation of good morals and the social order of Korea” (99 KaHap 14496, S. Cent. Distr. Court, 10/20/2000). The AmendmentContinue reading
Tag: Korean liquidated damages
Liquidated (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 goodContinue reading
Liquidated Damages vs. Penalty Damages: Korean Contract Law Basics
Liquidated Damages v. Penalty Damages in Korea In Korea, liquidated damage clauses in South Korean contracts may be invalidated if the liquidated damage amount is deemed, by a Korean court of law, as “unduly excessive.” (Civil Act Art. 398(2)). Article 398 of the Civil Act may be found below. Korean Liquidated damages law is governed by the Civil Act of Korea and related Korean Law. However, if an agreement, in Korea, notes a “penalty,” the amount of the “penalty isContinue reading
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