Ask Korea Law

Published by Chung & Partners


Leave a comment

Is Defaulting Korean Supplier Liable for the Foreign Distributor’s Damages and Loss of Profits Resulting from the Failure of 3rd Party Reseller Deal?

그림 2A distributor from the U.S. entered into a distributorship contract with Korean supplier (exporter) for certain goods.  Of course, the U.S. distributor was thinking to resell the goods in U.S. market for a markup. But the problem broke up after the contract was duly singed and executed.  With no reason, Korean supplier suddenly refused to sell the goods and rescinded the contract.  Due to this unexpected turmoil by the foreign supplier, the U.S. distributor could not properly perform the reselling deals with the local warehouse stores, which the distributor had thought very lucrative. There would be no doubt that the act of Korean distributor constitutes a breach of distributorship agreement. But, the U.S. distributor did not pay anything, yet.  The only loss they encountered was they lost a good deal with 3rd party by reason of the Korean supplier’s breach of contract.  Now, the U.S. distributor tries to recover damages and loss of profits from the supplier in Korea which they suffered from the failure of the reselling deal with the local warehouse stores.  In this case, can the U.S. distributor prevail in Korean court and under Korean law?

The key legal issue would be whether the Korean supplier knew of the fact that the distributor had completed their negotiation with 3rd party for the resale agreement.  According to the ruling from the Supreme Court of South Korea, if the supplier knew of the fact, the supplier is liable for the distributor’s loss relating to failure or non-performance of the resale agreement with 3rd party.  By contrast, Continue reading


Leave a comment

How To Collect Your Claim In Korea – Filing a Lawsuit in Korea: Overview

I have been asked so many times from foreign companies or individuals, “what shall I do to collect my money under Korean laws?”.

There are certain steps widely and generally taken here in Korea, which is not quite different from other countries.

1.  Sending a formal demand letter in the name of Korean attorney

This is optional, but there is possibility of voluntary repayment by the Korean debtor after receiving a demand letter from a Korean lawyer.  It is effective especially when the debtor in Korea misconceives that foreigners cannot find a way to collect the money far away here in Korea.

2. Filing a request for the Payment Order to the Korean court

This is also optional.  Payment order is much convenient, inexpensive, fast and easy way to get a judgment from the court compared to a lawsuit.  It is widely known that Korean court has a tendency to issue Payment Order easily.  A Payment Order shall be issued without questioning the debtor.  If no objection has been raised from the debtor within 2 weeks, then the Payment Order has the same effect as a final and conclusive judgement.  If the debtor objects to it, then the court regards your request for a Payment Order as a filing lawsuit and initiates your trial against the debtor(hearings and handing down a  Continue reading