The Korea Fair Trade Commission (FTC) said on the 13th that it imposed a 145 million won penalty surcharge on Daebang Construction for setting unfair special terms when entering into construction work contracts.
The Korea Fair Trade Commission (FTC) determined that Daebang Construction violated Article 3-4 (Prohibition of Unfair Special Terms) of the Act on the Fairness of Subcontracting Transactions when it signed a total of 482 subcontracting contracts with subcontractors. The statute stipulates that contract terms that unfairly infringe on or restrict the interests of subcontractors may not be set.
Daebang Construction, when entering into construction contracts, set a clause stating that "the contractor may retain an amount equivalent to 10% of the total contract price as a defect repair deposit, or may refuse to pay an amount equivalent to 10% of the final total contract price until the subcontractor submits a defect repair guarantee securities." The Korea Fair Trade Commission (FTC) viewed the setting of such a retention special term as infringing on subcontractors' rights to receive payment and other rights.
In addition, the Korea Fair Trade Commission (FTC) said it found that, when entering into subcontracting contracts with subcontractors, Article 18 of the Enforcement Rule of the Wastes Control Act was also violated. Daebang Construction set a special term requiring the ordering party to bear any excess expense for waste disposal that exceeds the amount set at the time of contract, regardless of responsibility.
Under Article 18 of the Enforcement Rule of the Wastes Control Act, environmental management expense must be borne by the business operator, but Daebang Construction unfairly shifted this to subcontractors, it said.