Download - 2007. 6. 28
1 Fair Trade Commission Republic of Korea
2007. 6. 28.
An Introduction to
Regulations on Adhesion Contracts
An Introduction to
Regulations on Adhesion Contracts
Jung-Hai Yoon, Ph.D.Director General
Headquarters for Consumer PolicyKorea Fair Trade Commission
<Competition Workshop>
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Contents
What are Adhesion Contracts?ⅠⅠ
Functions of Adhesion ContractsⅡⅡ
The Need for RegulationsⅢⅢ
Foreign Legislative CasesⅣⅣ
Korea’s Legislative CaseⅤⅤ
Corrective Measures ⅥⅥ
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Ⅰ. What are Adhesion Contracts?Ⅰ. What are Adhesion Contracts?
Contrac
t
Terms
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Any provisions forming a part of a contract prepared by a contracting party in a certain form to use when entering into an agreement with multiple parties.
Adhesion ContractsAdhesion Contracts
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Ⅱ. Functions of Adhesion ContractsⅡ. Functions of Adhesion Contracts
MassTransactions
Modern Society
Use ofAdhesion Contracts
SpeedySimplifiedtransactions
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Ⅲ. The Need for RegulationsⅢ. The Need for Regulations
Establishment of sound transaction order & consumer protection
Regulation of unfair Adhesion Contracts
Customers enjoy superficial freedom in deciding on contract
terms and form
Companies devise and use Adhesion Contracts
to their advantage
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Ⅳ. Foreign Legislative CasesⅣ. Foreign Legislative Cases
EU –
(1993) UK – (1977)
– Law on Unfair Provisions in Consumer Contracts (1999) Germany – Normal Transaction Contract Term Act (AGBG) (1976)
– (2002) France – Law on Consumer Protection and Consumer Information
in relation to goods and services (1978)
– Code de la Consommation (1993) Sweden – (1971) Israel – (1964) U.S. – Uniform Commercial Code (1952)
– (1981) Japan – Consumer Contract Act (2000) Korea – Regulation on Adhesion Contracts (1986)
Guidelines on Unfair Adhesion Contracts inConsumer Contracts
Unfair Adhesion Contracts Act
Normal Transaction Contract Term Act
Incorporated into Civil Law
Regulations on Unfair Contracts
Standard Contract Act
Contract Law Restatement
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Ⅴ. Korea’s Legislative CaseⅤ. Korea’s Legislative Case
Contract Tom, a student, pays $300 to become a member of a fitness center for three months Situation but suddenly he finds that he has to move Request Tom asks for a partial refund for the remainder of the membership that he will be unable to use due to unavoidable circumstances. Answer However, the fitness center employee denies Tom of any refund citing their Member Adhesion Contract states “No refund of usage fee”. Examination : Invalid · If Tom requested a refund prior to using the facilities: full refund · If Tom requested a refund during his membership: partial refund after deducting the usage fee of days used and a penalty of 10% of $300
Case 1Case 1
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Contract Book wholesaler Kyobo entered into an agency agreement with Publisher McMillan, and paid $1,000 as a deposit under the agreement Situation When the agency agreement expired Request Kyobo requested McMillan to return the deposit Answer but McMillan refused to do so claiming the agreement stated that the deposit was “to be returned one year after the termination of the contract”. Examination : Invalid · McMillan received the deposit as a security for Kyobo’s liabilities · The deposit should be returned to Kyobo upon contract termination or cancellation · Therefore, upon termination of agreement, McMillan must return the deposit to Kyobo after deducting any monies Kyobo owes McMilan
Case 2Case 2
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Unfair Adhesion Contracts are invalid
Even if certain provisions of the contract term are invalid,
other provisions remain valid and effective.
Provided, however, in the case the valid provisions fail to
achieve the goal of the contract or
are disadvantageous to the customer, the entire contract is
invalid.(the principle that puts the writer at a disadvantage)
Ⅵ. Corrective measures & Standard Adhesion Contract System
Ⅵ. Corrective measures & Standard Adhesion Contract System
Effectiveness of Unfair Adhesion Contracts
Effectiveness of Unfair Adhesion Contracts
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Application for Examination A party that has legal interests Consumer organizations under
the Framework Act on Consumer Korea Consumer Agency
Examination conducted under the authority of the KFTC
KFTC Examination of
Adhesion Contracts
KFTC Examination of
Adhesion Contracts
KFTC
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‘87~’92 ‘93~’97 ‘98~’02
48
‘03~’06
Examination Applications & Corrective Measures
43
1,488
No. of Applications
No. of Corrective Measures
359
4,171
698
4,562
456
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Definition
A standard contract in a certain field takes into account the
positions of the business and client, and establishes fair rights
and obligations of both contracting parties for the
Objectives for the creation a sound transaction order and prevention of unfair Adhesion Contracts.
Condition Business have the discretion to use the Standard Adhesion Contract Enactment & Adoption As of June ’07, 54 Standard Adhesion Contracts have been adopted in 22 Transaction fields
Standard Contract Term System
Standard Contract Term System
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Standard Adhesion Contracts in Effect (2007.6)Fields (no.) Name of Standard Contract
1. Apartment sales & Housing Lease (2)
Standard Apartment Agreement, Standard Housing Lease Agreement
2.Hospitals (2) Surgery Agreement (examination & anesthesia), Hospitalization Agreement
3. Bank credit loans (13)
Basic Agreement on Bank Credit Loans (business, household), Loan & Security Agreement (business), Loan Agreement (household), Additional Agreement Ⅰ(increase of ceiling), Payment Certification Agreement (business, household), Mortgage Agreement, Continuing Guarantee, Guarantee
4. Store sales Store Sale Agreement
5. Department Store Lease Department Store Lease Agreement
6. Bank deposit transactions(4)
Basic Deposit Transaction Adhesion Contract, Free Deposit & Withdrawal Account Adhesion Contract, Accumulative Deposit Account Adhesion Contract, Installment Account Adhesion Contract
7. Parking Lot Parking Lot Management Regulations
8. Leisure condominium(3)Condominium Sale Agreement, Condominium Admission Agreement, Condominium Facilities Usage Adhesion Contract
9. Travel (2)Standard Domestic Travel Adhesion Contract, Standard International Travel Adhesion Contract
10. Gift certificate Standard Gift Certificate Adhesion Contract
11. e-commerce(3)Standard Adhesion Contract for the Usage of Internet Cybermalls, Standard e-Commerce Adhesion Contract, Standard e-Insurance Adhesion Contract
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Fields (no.) Name of Standard Adhesion Contract
12. Performance Arts Standard Movie Theater Adhesion Contract
13. Franchise Standard Franchise (restaurants) Adhesion Contract
14. Transportation Standard Express Delivery Adhesion Contract
15. Ceremonial Occasions(3) Standard Adhesion Contract for Marriage Information Business, Standard Adhesion Contract for Funeral Parlors, Standard Adhesion Contract for Marriage Halls
16. Education services(4)Standard Adhesion Contract for Driving Institutions, Standard Adhesion Contract for Private Institutions, Standard Adhesion Contract for Study Abroad Agencies, Standard Adhesion Contract for Tutorial Books
17. Culture, Sports, Entertainment(4)
Standard Golf Course Usage Adhesion Contract, Standard Fitness Club Adhesion Contract, Standard Adhesion Contract for System Operators, Standard Adhesion Contract for Relay Operators
18. Packing & Handling services Standard Adhesion Contract for Packing & Cargo Handling
19. Loan transactions Standard Loan Adhesion Contract
20. Electronic goods & sales device (3)
Standard Adhesion Contract for Vending Machines, Standard Adhesion Contract for Water Purifier Lease (rental), Standard Adhesion Contract for Unmanned Guard System
21. Dry cleaning Standard Adhesion Contract for Dry Cleaning Business
22. Automobile Standard Adhesion Contract for Car Sales (New)
22 fields of transactions 54 Standard Adhesion Contracts
Standard Adhesion Contracts in Effect (2007.6)
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