Contracts with Korean suppliers: the clauses that matter

Most orders from Korea run on a purchase order and an email thread. That works until it does not, and the moment it stops working is the moment you discover which country’s law applies and where you would have to go to argue about it.

Governing law and where disputes are heard

These are two separate questions and people routinely conflate them. Governing law decides which country’s rules interpret the contract. Jurisdiction decides where you argue. You can have English law heard in Seoul, or Korean law heard in Singapore.

A Korean supplier will usually propose Korean law and the Korean courts. That is not unreasonable — it is their home ground, exactly as your home courts would be yours. What matters is that you know which you agreed to.

The clauses worth arguing over

Specification and approved sample

The most common dispute is not fraud. It is disagreement about what was ordered. Attach the specification and reference the approved sample explicitly, with a date. Without that, every quality argument becomes one person’s recollection against another’s.

Inspection and acceptance

Say who inspects, when, against what standard, and what happens on failure. Say how long you have to reject after delivery — silence here often means acceptance is deemed to have happened far sooner than you would like.

Payment terms tied to events

“30% deposit, 70% before shipment” is weaker than “30% deposit, 70% against a clean inspection report and a copy of the on-board bill of lading”. Same money, entirely different leverage.

Tooling and moulds

If you paid for a mould, say in writing that you own it and can have it released on request. Buyers discover with depressing regularity that the tooling they funded is treated as the factory’s property, and it becomes the reason they cannot move production.

Exclusivity, if it matters

By default a factory may sell the same product to anyone. If that matters, it has to be written, scoped by territory and time, and usually paid for — the same point that applies to formula ownership in cosmetics manufacturing.

Language, and which version wins

Bilingual contracts are normal. State which language governs if the two versions conflict, because they will conflict — translation is never exact. A supplier proposing that the Korean version prevails is not being sharp; it is the natural default for them. Decide deliberately rather than by omission.

Signing, seals and who is bound

Korean companies execute documents with a registered corporate seal (법인인감) rather than a signature. What matters more is that the entity named is the entity you checked.

Confirm the registered name on the contract matches the registration record, and if the company is incorporated, that the person signing has authority — the directors are on the court registry extract. A contract with a trading name that is not a registered entity binds nobody.