Consumer Dispute Resolution | Easy to Find, Practical Law

Purchase contract for goods

Entering into a contract

- Purchasing a good means a purchase contract has been concluded between the consumer and the business operator. This kind of purchase contract on goods is established in principle when a consumer makes an offer and the business operator accepts the offer.

Withdrawing the purchase intention

- When a consumer changes his or her mind and returns a product after purchase, it is called a withdrawal of offer. In principle, an offer cannot be withdrawn (Article 527 of the 「Civil Act」).

※ But for general transactions, depending on the sales policy of the seller, the consumer is permitted to return a good as long as he or she assumes the return expenses and the value of the good is not damaged.

- While the Korean law recognizes a consumer’s right to withdraw an offer, it also seeks to prevent the consumer from making impulsive purchases. Thus, the consumer can withdraw his/her intention to conclude a contract after a certain amount of time, if the transaction has been done through installment transaction, electronic commerce(e-commerce), mail order, or door-to-door sales.

Service use contract

Closing a contract using terms and conditions

- When one uses the public transportation system, it is akin to signing a transportation service use contract. But since signing such contract with individual consumers is very impractical, it is accomplished using terms and conditions.

- The term “terms and conditions” means the content of a contract that has a consistent format; it is used when one party has to sign repeatedly a specific kind of contract with a multiple number of counterparts (Article 2-1 of the 「Act on the Regulation of Terms and Conditions」).

- Thus, in the following cases, contracts are not signed individually with each party, but a standard set of contract terms prepared by the business operator beforehand is proposed to the consumer, who must then accept it en masse in order for the contract to be concluded: insurance contracts including fire and life insurance, gas/electricity/water supply contract, transportation contracts for subway/bus/taxi/airline/shipping transportations, contracts for savings and deposit accounts, contracts for postal and telephone services, contracts for entering movie theaters, storage rental contracts, and contracts for medical checkups.

- If a business person and a customer agree on a matter in a manner that is different from the manner stipulated in terms and conditions, the agreement shall prevail over terms and conditions (Article 4 of the 「Act on the Regulation of Terms and Conditions」).

Precautions when purchasing goods for each sale/transaction format

Sales format

- The sales formats can be classified as either "general sales" wherein the goods are displayed and sold in a store and/or "special sales" wherein the goods are sold through other types of channels. Special sales include door-to-door sales, mail order (e-commerce, TV home shopping included), telemarketing, multi-level sales, and installment transaction.

General sales

- When a consumer makes a purchase through a general sales channel, it is a general contract signing and is processed according to the laws and terms and conditions on general contracts.

Special sales

Category	Precautions
Door-to-Door Sales	The buyer must ask for the national resident card, permits, or registration card from the salesman. In addition, the name of the salesman and his company name & address must be checked, including whether the salesman is carrying the proper identification cards. Goods sold door-to-door are very diverse, and they include health foods, cosmetics, automobile accessories, vacuum cleaners, and learning materials. The main forms of consumer harm are the business operator’s refusal to accept the withdrawal of offer from consumers, demand for excessive penalty, and failure to implement the terms of the contract.
E-commerce & Mail Order (including TV home shopping)	Unlike regular commercial transactions, in e-commerce & mail order purchases, the consumer cannot directly look at and touch the product but has to make a purchase decision based on the advertisement. Thus, the consumer cannot determine the product quality, and, during the process of delivery to the consumer, mishaps could occur such as product damage or loss. Therefore, the following must be checked: ① The product advertisement and displayed description must be carefully checked for the following items: contents of the product, price, quality, who pays the delivery cost, acceptable dates for return, who pays for the costs of return, requirements for return ② In the event of order cancellation or return of goods, the contract, advertisement, and receipt must be kept. Even for internet purchases, the terms of the contract must be printed out or saved in case of disputes. ③ Availability of A/S or replaceability of parts and maintenance costs must be looked into carefully. Because, in mail order purchases, the consumer has to rely on advertisement or PC/TV screen when making purchases, the actual product state could be different from what is shown on the screen image. A consumer who makes a mail order purchase, therefore, must keep a copy of the screen capture of the advertisement in case of disputes.
Multi-Level Sales	Verify that the company is registered with the city/provincial government or financial cooperative as a multi-level sales company. Financial compensation can be sought from a multi-level marketing company through a financial cooperative if it is registered. The registration status can be verified through the city/provincial government or financial cooperatives (MutualAidCooperative& Consumer, KoreaSpecialSalesFinancialCooperativeAssociation). If the company is registered, check the revenue, commission rate, and consumer complaint processing in the "Multi-Level Marketing Company Information" section before applying for membership.
Installment Transaction	In order to minimize damage from impulsive purchases, it is required by law to perform certain duties so that the buyer can fully understand the installment payment contract. These include showing the payment schedule in the contract, notifying the buyer, and giving a copy of the contract to the buyer (Article 5(1) of the 「Installment Transactions Act」). Therefore, check the contract to see if these details are included or omitted or if there are any inaccuracies.
Continuing Transaction	Unlike regular one-time transactions, a poorly worded continuing transaction contract will wreak damage continuously. So before concluding the contract, the contents, period, and provisions must be carefully examined. When a contract is entered into, it should be in writing, and the contract should be kept for reference. Matters other than those set forth in the clauses must be included in the special provisions. Promises given orally by the salesperson cannot be validated and must therefore be included in the contract.

- When a consumer wishes to return the goods he/she purchased through special sales, he or she must express to the business operator an intention to withdraw the offer within the time period specified by the law.

※ The declaration of offer withdrawal should be done not orally but through certified mail contents service provided by the post office. This way, evidence can be provided when a dispute arises later.

Sales method	Reason for offer withdrawal	Offer withdrawal period	Cost of returning goods
Door-to- doorsales& multi-levelsales	1. When the goods are delivered earlier or at the same time as the issuance of the contract.	14 days from the day the contract is received.	The cost of returning goods is borne by the seller (Articles 9(9) and 18(8) of the 「Act on Door-to-Door Sales, etc.」).
	2. When the goods are delivered later than the issuance of the contract.	14 days from the day the goods are received or delivery begins.
	3. When the contract has not been received from the seller.	14 days from the day the seller’s address became known or such became possible to know.
	4. When the received contract does not indicate the seller’s address.	14 days from the day the seller’s address became known or such became possible to know.
	5. When, due to the seller’s changed address, it is not possible to withdraw the offer within the time period given in 1, 2.	14 days from the day the seller’s address became known or such became possible to know.
	6. When the contract does not contain any terms on the withdrawal of contract.	14 days from the day withdrawal of the offer was possible or could have been known.
	7. When the seller interferes with the withdrawal of the offer.	14 days from the day the act of interfering ceases.
E-commerce and mailorder	When the goods are delivered earlier or at the same time as the issuance of the contract.	7 days from the day the contract is received from the business operator.	Based on restitution obligations, the cost of returning goods must be borne by the consumer. However, if the contents of goods are different from what is described in the advertisements or the contract, the cost of return must be borne by the business operator (Article 18(9) and (10) of the 「Act on the Consumer Protection in Electronic Commerce, etc.)
E-commerce and mailorder	When the goods are delivered later than the issuance of the contract.	7 days from the day the goods are delivered or delivery begins.
Installment transaction	When the contract has not been received, or the received contract does not indicate the seller’s address.	7 days from the day the business operator’s address became known or such became possible to know.	Based on restitution obligations, the cost of returning goods must be borne by the installment transactor (Article 10(10) of the 「Installment Transactions Act」).
	When the offer could not be withdrawn within the period allocated for withdrawal because of address change by the business operator.	7 days from the day the business operator’s address became known or such became possible to know.
	When the contents of the goods are different from what is in the advertisement or what is described in the contract.	3 months from the day the goods were received or 30 days from the day this fact became known.

Precautionswhenusingthegoods

Precautions when using the goods

- In case of problems that might arise later, the consumer must secure the contract, bill, receipt, purchase cancellation certificate, instruction manual, and letter of guarantee.

- The product must be used according to the instruction manual. The product may not be covered by the free warranty if it is not used according to the instruction manual and a problem arises.

Lawsandregulationsondamagerelief

Laws and regulations on damage relief

Name of act	Description
「Civil Act」	Cancellation of fraudulent sales contract (Articles 140 to 146 of the 「Civil Act」) Cancellation/Clearing of contract (Articles 543 to 553 of the 「Civil Act」) Make a claim for damage from breach of contract/illegal acts (Article 750 of the 「Civil Act」)
「Act on Door-to-Door Sales, etc.」	Withdrawal of offer made through door-to-door sales/multi-level sales (Articles 8, 9, 17 and 18 of the 「Act on Door-to-Door Sales, etc.」) Cancellation of continuing transaction contract (Articles 31 and 32 of the 「Act on Door-to-Door Sales, etc.」)
「Act on the Consumer Protection in Electronic Commerce, etc.」	Withdrawal of offer made through e-commerce/ mail order/ TV home shopping (Articles 17 and 18 of the 「Act on the Consumer Protection in Electronic Commerce, etc.」)
「Installment Transactions Act」	Withdrawal of offer made through installment transaction (Articles 8 and 10 of the 「Installment Transactions Act」) Invoke credit card defense right (Article 16 of the 「Installment Transactions Act」)
「Act on the Regulation of Terms and Conditions」	When the standardized contract has not been issued, or the obligation to explain the contract has not been fulfilled, the contents of the contract cannot be invoked (Article 3 of the 「Act on the Regulation of Terms and Conditions」). Invalidity of unfair clauses in contracts and prohibition of their use (Articles 6 and 17 of the 「Act on the Regulation of Terms and Conditions」)
「Consumer Framework Act」「ConsumerDisputeResolutionCriteria」	Types of Damage & Compensation Criteria (Article 16 of the 「Consumer Framework Act」 and 「ConsumerDisputeResolutionCriteria」)
Other individual acts concerning consumers	Provides grounds for judging illegal acts committed by businesses (Prohibit selling/manufacturing, prohibit false labelling/exaggerated advertisements, etc.)

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