KFTC Revises 7 Standard Distribution Contracts to Clarify Payment Dates

Payment start dates for direct purchases in retail distribution must now be counted from the actual product delivery day, under a revised standard contract system issued by the Fair Trade Commission, Korea Fair Trade Commission reported.

The regulatory changes apply to seven types of standard distribution contracts.

The Fair Trade Commission revised the contracts to clarify that the product receipt date, which serves as the starting point for calculating payment delivery dates, is the actual product delivery day. The agency also introduced measures to prevent large-scale retailers from imposing unagreed-upon costs, such as advertising expenses, onto suppliers.

The revisions cover seven standard contracts across various sectors, including two types for online shopping malls (direct purchase, consignment transactions), two types for department stores and large supermarkets (direct purchase, special contract purchase), duty-free shops (direct purchase), convenience stores (direct purchase), and television home shopping.

Under the revised system, the standard contracts explicitly state that the product receipt date under the Large-Scale Retail Business Act is the day the products are handed over. The sequence of inspection-related clauses was moved behind the payment-related clauses to show that the product receipt date is the delivery day prior to product inspection.

Provisions regarding the prior notification of other costs—previously included in only four types of standard contracts—were expanded to direct-purchase standard contracts for online shopping malls and other sectors.

Under the updated rules, if additional costs not specified in the contract are imposed, retailers must notify suppliers in writing or via an electronic system capable of confirming receipt at the time of contract execution. Costs that are not notified in advance or agreed upon cannot be charged additionally, regardless of their name.

The Fair Trade Commission plans to actively promote and encourage the use of the revised standard contracts among major business associations and industry policy consumers. The agency has established and distributed a total of 10 types of standard contracts by transaction type and business category since the enforcement of the Large-Scale Retail Business Act on Jan. 1, 2012, continuously updating them in response to industry demands and related institutional improvements.