Subcontracting Act (Fair Transactions in Subcontracting)
Summary
The National Assembly of the Republic of Korea enacted the Subcontracting Act governing fair transactions between large companies (contractors) and their subcontractors. The legislation establishes fair dealing obligations, payment terms, and protections for subcontractors in the supply chain. Translation provided by the Korean Law Research Institute (KLRI) e-Law service.
What changed
The Subcontracting Act establishes a comprehensive legal framework governing business relationships between contractors and subcontractors in South Korea. The law imposes fair dealing obligations on large companies engaging smaller subcontractors, addressing issues such as unfair contract terms, delayed payments, and unilateral contract modifications.
Affected parties include large companies acting as prime contractors and their subcontractors across manufacturing and construction sectors. These entities must ensure compliance with fair transaction requirements when establishing and managing subcontracting relationships. The legislation applies to both domestic Korean companies and foreign companies operating in Korea that engage subcontractors.
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Apr 18, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
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