• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.47
• /
• pp.157-182
• /
• 2010

A counter-guarantee is an independent undertaking and it functions in the same way as an ordinary independent guarantee. However, the typical notion of independence which applies to the relationship between the guarantee and the underlying contract cannot be exactly transposed to the relationship between the counter-guarantee and the primary guarantee, because the primary guarantor bears its duties that derive from the mandate. In this respect, this study reviews, with some critics, a Korean appellate court's decision and argues that, in spite of the principle of independence between the counter-guarantee and the primary guarantee, the primary guarantor may not be entitled to reimbursement from the counter-guarantor, if it is objectively evident that the primary guarantor has failed to perform its duty of verifying compliance under the primary guarantor or if it is objectively evident that the primary guarantor knows that it is objectively evident that there was fraudulent calling by the beneficiary under the primary guarantee.

• Korea Trade Review
• /
• v.43 no.6
• /
• pp.25-50
• /
• 2018

It is an undeniable fact that the counter-guarantees are always exposed to wrongful or fraudulent demands for payment due to its institutional hallmarks and simplicity. Generally counter-guarantees are payable by presenting a written statement indicating that the local guarantor was in receipt of the beneficiary's statement that the principal was in breach of the underlying contract without any proof of any default. No proof of actual payment of guarantee is required. These matters may lead to numerous disputes or conflicts between the parties concerned. These problems raise may legal issues such as a guarantor(or a counter-guarantor)'s dishonor, the wrongful or fraudulent demands for payment, and the fraudulent conspiracy or the acquiescence of the local guarantor in the course of the procedural demand for payment. On the other hand, the guarantor's dishonor or an injunction are sometimes misused as dispute resolution method between parties involved. Therefore, this research analyzed the guarantor's wrongful dishonor and related issues such as an injunction, fraud exception, and others under the counter-guarantee regime focusing on the relevant cases. This paper also suggested practical implications and countermeasures from a business point of view.

• 월간 기계설비
• /
• s.278
• /
• pp.38-43
• /
• 2013

대한설비건설협회는 하도급자인 회원사의 권리보호와 원도급자의 불법 불공정 하도급 거래행위를 개선코자 국회, 국토교통부, 공정거래위원회 등 여러 관련 부처에 지속적으로 제도개선을 추진하고 있다. 특히, 원도급자가 하도급자에게 일방적으로 불이익을 강요하는 부당한 특약을 설정하거나, 원도급자의 하도급지급보증 사고발생 시 하도급자의 보증금 청구에도 보증기관이 보증금을 지급하지 않아 하도급자인 회원사의 피해가 빈번함에 따라 제도개선을 추진해 왔다. 이러한 노력으로 최근 공정거래위원회에서는 하도급법을 개정하여 하도급공사의 부당특약 금지조항을 신설하고, 하도급대금지급 보증기관의 보증금 지급사유를 법률에 명시하게 됐다.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.58
• /
• pp.215-236
• /
• 2013

It is quite true that the more Korean contractors receive overseas contracts, the more they need guarantees. The top market for them is the Middle East countries, consisting of more than the half of the total amount awarded last year and the trend is increasing as well. The problem, however, is that employers in these countries are reluctant to use international rules for guarantee such as URDG or ISP98 and easily make unfair callings. However, Korean contractors(applicants), especially small and medium sized enterprises(SMEs) tend to hurriedly enter a contract without looking into its contents as well as guarantees. They do not realize the importance of the guarantees until they receive callings from the employers(beneficiaries). Being independent from the underlying contracts, guarantee is the equivalent to cash in that it usually does not require any proof of demand when calling and the guarantor should make a payment within usually 5 business days after the request. It is often observed these days that several Korean SMEs go bankrupt due to liquidity risks after receiving unfair callings from employers in the Middle East countries. In retrospect, some cases could be obviated if contractors were a little more careful in checking the contents of a guarantee at the time of concluding a contract. For example, there is one case where the underlying contract includes a reduction clause in the Advance Payment bond and the guarantee does not have that clause. In the end, the Korean contractor had to take the whole burden of the bond amount though it had finished 81% of the project. Nobody could argue that contractors should take a full responsibility if they fail in their obligations. However, the employer's wrongful callings need to be prevented in the first place, if possible. As there shouldn't be a case where one party is at a disadvantage against the other like the case mentioned above, useful insight is being sought to minimize unfair calling risks for the benefit of the applicant. First, the applicant should carefully look into every detail of the potential guarantee before signing a contract, heeding especially that there is a reduction clause in the AP bond. Second, the governing principles for guarantee should be the ones that are internally used such as URDG758 that is objective in terms of callings given that, for example, it specifies that the requirement for a supporting statement when making a demand is a default rule. It is also recommended that the form of guarantees be the standard demand guarantee. Third, parties involved in issuing guarantees are advised to understand international rules for guarantee like URDG758 and ISP98 and to play a key role in guiding SME contractors in Korea so that they can protect themselves from possible wrongful callings, particularly from employers in the Middle East countries. I hope this study would give a wake-up call for Korean SMEs wishing to do business in the Middle East countries and remind them of the importance of guarantee itself and its governing principles.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.58
• /
• pp.179-213
• /
• 2013

While a performance type guarantee is required as a security for non-performance risk by a seller, a payment guarantee is used as a security for non-payment risk by a buyer(or a borrower in a loan agreement). A payment guarantee is a type of independent bank guarantee, bank guarantee, bond, demand guarantee, or standby letter of credit. A guarantor accepts a credit risk of a principal which is normally a buyer in a contract for sale of goods. A payment guarantee is independent of the underlying relationship between the applicant and the beneficiary. The guarantor is only empowered to examine the beneficiary's demand and determine the payment on its face to the terms of the guarantee. A payment guarantee is thus different from a suretyship. The principle of independence carries a significant advantages for a guarantor as well as for a beneficiary. While a documentary credit requires B/L, commercial invoice, packing list, inspection certificate, etc., a typical payment guarantee does not require any evidence for a seller's performance of the underlying contract other than written demand. In this respect payment guarnatee can be a more secured facility than a documentary credit. A payment guarantee normally comes into force from the issuing date and shall remain in effect until all sums guaranteed shall be paid in full by a buyer(or a borrower) or by a guarantor. Although a guarantor shall pay a demand made in accordance with the terms and conditions of the payment guarantee, a payment demand may be denied when it is determined to be abusive or unfair.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.53
• /
• pp.75-97
• /
• 2012

This study primarily concerns the transfer of letter of credit. A transferable credit is a credit that clearly specifies it is 'transferable' and may be made available in whole or in part to second beneficiary by the request of the first beneficiary. the transfer of the credit is available where the seller as a middleman in intermediate trades purchases from domestic and international supplier. The purpose of this study is to examine the transfer of letter of credit in the UCP600. Having recognized the differences, the study analyzes the transfer of letter of credit under the UCP600 in comparison to those under the ISP98. The ISP98, like the UCP600, stipulates for the requirement of transfer, the number of transfer, conditions of transfer, the replacement of the name of first beneficiary.

• 월간 기계설비
• /
• no.10 s.219
• /
• pp.99-106
• /
• 2008

최근 경기침체로 인한 건설사의 도산으로 설비업계의 어려움이 가중됨에 따라 공제조합에 대한 보증금 청구가 급격하게 증가하고 있어 조합의 부담이 커지고 있다. 이러한 사태는 고유가에 따른 원자재 가격 상승이 가장 큰 원인이나 "저가수주"도 한 몫 하고 있어 조합원 스스로 자정이 필요하다는 여론이 대두되고 있다. 이러한 문제를 근원적으로 해결하기 위한 방법 중 하나로 현행제도의 이해와 문제점 사례, 문제해결을 위한 방안 등을 자세히 알 필요가 있다. 본지는 '저가수주공사에 대한 이해와 대처방안'을 5회에 걸쳐 연재 할 계획이다.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.50
• /
• pp.109-136
• /
• 2011

Bank Guarantee system is commonly used as useful financial instruments to support various overseas and domestic business activities by providing bank guarantees. Therefore, it will be able to develop as a useful socio-economic useful system. However, some procedural problem can arise from the processes under demands for payment. Therefore, it is very important to review the requirements of the demand for payment and compliance standard for the examination of a presentation under the guarantee system. It is necessary to examine main issues under the revised URDG 758. The URDG introduced the same examination principle of "need not be identical to, but shall not conflict with' as that of UCP 600. The main changes of the URDG 758 like this imply the mitigation of the compliance standard for examination. So, This paper is to provide a comparative study of the regulations and laws for the examination standard and propose their implications and practical notes under bank guarantee system. For this purpose, this study will be examined the practical and legal issues focusing on the relative regulations of the revision URDG 758. It will also be reviewed and compared with the URDG, ISP98, UCP 600 and so on.

• Journal of the Korea Institute of Building Construction
• /
• v.17 no.4
• /
• pp.385-391
• /
• 2017

The warranty liability period for defects in apartment buildings by work type is not based on scientific analysis, making the appropriateness of the term a culprit behind the lawsuits. Therefore, this research aims to evaluate the appropriateness of the warranty liability term of apartment buildings by identifying the current status of defects, in particular, caused by finishing works. That is because the number of defects, caused during the finishing works, accounted for the largest portion of the total defect cases of apartment buildings reported to the Apartment Defect Dispute Mediation Committee under the Ministry of Land, Infrastructure, and Transport of Korea between 2010 and 2011. The result from analyzing claims for defect repairs of the finishing works showed that most cases by work type continued to be made after two years, and only about 60% were charged within the warranty period. And, defects by work type have correlation, which needs to be considered for a better construction technique. Considering a low correlation between the possibility of defects and the construction performance rankings, which are highly relevant to the apartment preference. It is believed that there needs to be a qualification process for agencies that actually performs finishing works.

• Journal of the Korea Institute of Building Construction
• /
• v.7 no.2 s.24
• /
• pp.67-76
• /
• 2007

The purpose of this study is to propose the efficient improvement in the lawsuit to request the guarantee against defect. This study points out several problems about related act and subordinate statue and judgement by analyzing the character of contract in apartment house, related laws and regulations, appraisals and judicial decisions. This study deduces the necessity of the establishment of the specification and the breakdown cost for repair and maintenance work to provide the standard for the detached judgement.