• The Korean Journal of Air & Space Law and Policy
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• v.31 no.2
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• pp.37-72
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• 2016

In the aerospace field, besides special purpose airplanes, contracts for supply of various types of products such as prototypes, unmanned aerial vehicles and space launch vehicles are increasing. In the case of the contractor, it was planned to spend a large amount of money to supply the production, but if the purchase specification that presents the quality and performance standard of the product is poor or lacks the capacity to judge the performance, consuming enormous amounts of time and money. Even if the undertaker does not have the ability to supply the products with the required performance and quality to achieve the purpose of the contract, he/she must pay the cost of burial due to the incompleteness of the work and the compensation for the cancellation of the contract. In this case, the defendant ordered the plaintiff to supply the aircraft by the Happy Box method, which is capable of ILS Offset flight as specified in the Purchase Specification, but the plaintiff attempted to supply the aircraft by the RNAV method. Although the ILS ground signal can be inspected by the RNAV method, the aircraft manufactured in the manner claimed by the plaintiff does not have the ILS Offset flight function required by the purchase specification, so the defendant can not achieve the purpose required by the purchase specification. It was a question of whether a defendant's cancellation of contract was legitimate. The aircraft, which is the object of this contract, is a subordinate substitute, so the case contract is of undertaking. Therefore, in order to complete the work in this contract, the major structural parts of the aircraft must be manufactured as agreed and have the performance generally required in the social sense. However, the aircraft delivered by the plaintiff has serious defects because the defendant can not achieve the purpose required by the purchase specification due to the lack of the ILS Offset flight function required by the purchase specification. This deficiency is impossible for the plaintiff to repair, so the defendant 's cancellation of the contract is legitimate.

• Journal of Distribution Science
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• v.10 no.2
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• pp.29-41
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• 2012

This paper undertakes a conceptual review of transaction cost to broaden the understanding of the transaction cost analysis (TCA) approach. More than 40 years have passed since Coase's fundamental insight that transaction, coordination, and contracting costs must be considered explicitly in explaining the extent of vertical integration. Coase (1937) forced economists to identify previously neglected constraints on the trading process to foster efficient intrafirm, rather than interfirm, transactions. The transaction cost approach to economic organization study regards transactions as the basic units of analysis and holds that understanding transaction cost economy is central to organizational study. The approach applies to determining efficient boundaries, as between firms and markets, and to internal transaction organization, including employment relations design. TCA, developed principally by Oliver Williamson (1975,1979,1981a) blends institutional economics, organizational theory, and contract law. Further progress in transaction costs research awaits the identification of critical dimensions in which transaction costs differ and an examination of the economizing properties of alternative institutional modes for organizing transactions. The crucial investment distinction is: To what degree are transaction-specific (non-marketable) expenses incurred? Unspecialized items pose few hazards, since buyers can turn toalternative sources, and suppliers can sell output intended for one order to other buyers. Non-marketability problems arise when specific parties' identities have important cost-bearing consequences. Transactions of this kind are labeled idiosyncratic. The summarized results of the review are as follows. First, firms' distribution decisions often prompt examination of the make-or-buy question: Should a marketing activity be performed within the organization by company employees or contracted to an external agent? Second, manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (the company sales force and distribution division) or independent intermediaries (outside sales agents and distribution)? Third, the authors develop a theoretical extension to the basic transaction cost model by combining insights from various theories with the TCA approach. Fourth, other such extensions are likely required for the general model to be applied to different channel situations. It is naive to assume the basic model appliesacross markedly different channel contexts without modifications and extensions. Although this study contributes to scholastic research, it is limited by several factors. First, the theoretical perspective of TCA has attracted considerable recent interest in the area of marketing channels. The analysis aims to match the properties of efficient governance structures with the attributes of the transaction. Second, empirical evidence about TCA's basic propositions is sketchy. Apart from Anderson's (1985) study of the vertical integration of the selling function and John's (1984) study of opportunism by franchised dealers, virtually no marketing studies involving the constructs implicated in the analysis have been reported. We hope, therefore, that further research will clarify distinctions between the different aspects of specific assets. Another important line of future research is the integration of efficiency-oriented TCA with organizational approaches that emphasize specific assets' conceptual definition and industry structure. Finally, research of transaction costs, uncertainty, opportunism, and switching costs is critical to future study.

• Korean Journal of Veterinary Research
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• v.49 no.2
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• pp.141-147
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• 2009

In Korea, burial is the most common method of disposing animal carcasses culled due to brucellosis infection. However, burial has many disadvantages such as shortage of appropriate burial sites, possibile pollution of ground water supply, and negative view of the public. In this study, we have reviewed 3 legal methods for disposing bovine carcasses, which are burial, incineration, and rendering. We also described the overall process, advantages and disadvantages, and required costs for each method. About 75% of bovine brucellosis outbreak farms had less than 3 reactors, and in our study, rendering required the least amount of cost for farms with a small number of reactors (1-3 heads). Our findings suggest that the use of rendering should be encouraged for farms with bovine brucellosis and other methods considered only if rendering is inappropriate.

• KDI Journal of Economic Policy
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• v.13 no.1
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• pp.35-63
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• 1991

Currently, Korea's banking industry holds a sizable amount of non-performing loans which stem from the government-led bailout of many troubled firms in the 1980s. Although this burden was somewhat relieved with the aid of banks' recapitalization in the booming securities market between 1986-88, the insolvent credits still resulted in low profitability in the banking sector and have been detrimental to the progress of financial liberalization and internationalization. This paper surveys the corporate bailout experiences of major advanced countries and Korea in the past and derives a rationale for readjustment measures against non-performing loans, in which rescue plans depend on the nature of the financial system. Considering the features of Korea's financial system and the banking sector's recent performance, it discusses possible means of liquidation in keeping with the rationale. The conflict of interests among parties involved in non-performing loans is widely known as one of the major constraints in writing off the loans. Specifically, in the case of Korea, the government's excessive intervention in allocating credits has preempted the legitimate role of the banking sector, which now only passively manages its past loans, and has implicitly confused private with public risk. This paper argues that to minimize the incidence of insolvent loan readjustment, the government's role should be reduced and that the correspondent banks should be more active in the liquidation process, through the market mechanism, reflecting their access to detailed information on the troubled firms. One solution is that banks, after classifying the insolvent loans by the lateness or possibility of repayment, would swap the relatively sound loans for preferred stock and gradually write off the bad ones by expanding the banks' retained earnings and revaluing the banks' assets. Specifically, the debt-equity swap can benefit both creditors and debtors in the sense that it raises the liquidity and profitability of bank assets and strengthens the debtor's financial structure by easing the debt service burden. Such a creditor-led or market-led solution improves the financial strength and autonomy of the banking sector, thereby fostering more efficient resource allocation and risk sharing.