Mutual growth - Seohan Innobility

Mutual growth

Ⅳ. Issuance and retention of subcontracted documents

Purpose

The purpose of these guidelines is to promote the issuance of advanced written documents and establish a fair subcontracting transaction order, when signing a subcontract and transacting between the Company (hereinafter referred to as “A”) and its partners (hereinafter referred to as “B”), by specifying the matters that the Company must comply with or strive for in relation to the issuance and preservation of written documents.

Composition of the Guidelines

1) Issuance of written documents in case of subcontract transactions
2) Preservation of issued written documents

Issuance of written documents in case of subcontract transactions

1) Subcontract

In the case of consigning manufacturing, etc. to B, A shall determine the main contents of the contract, such as the contents, quantity, and unit price of the consigned object, etc. by agreement with B, and then issue a subcontract in writing. If the contents of the original contract are changed due to design changes, etc., unless there are special circumstances, A shall prepare and issue written documents of an addition or change.

① Matters to be stated in writing

• Consignment date, contents, quantity and unit price of consigned objects, etc., time and place of delivering or providing the object, etc., inspection method and time of the object, etc., subcontract price, payment method, and payment date
• In case the principal contractor provides the subcontractor with raw materials, etc. required for the manufacture of objects, etc., product name, quantity, delivery date, payment method and payment date of the raw material, etc.
• Requirements, methods, procedures, etc. of subcontract price adjustment according to price fluctuations of raw materials, etc. after consigning the production of objects, etc.
② Time of issuance of the written documents

• A and B shall issue a written contract without delay after agreeing and setting the main contents of the contract.
• Even if there are circumstances in which it is difficult to deliver a written contract to A without delay, unless there is a special reason, at least until B starts work for the delivery of goods, etc., the contract shall be drawn up in writing.
③ Written document issuance method

• A shall issue a contract signed or signed and sealed by the Company or its representative.
• If the contract does not contain the signature or seal of the parties to the subcontract transaction, it shall be considered non-issuance in writing.
• In the case of frequent delivery, the basic contract shall be concluded first, and for each delivery, purchase orders (including electronic purchase orders) issued by A shall be replaced by individual contracts.
④ Exception

• For matters that are difficult to confirm at the time of consignment, A may issue a document without stating the relevant matters only if there is a justifiable reason.
•However, even in this case, the reasons why the relevant matter has not been determined and the scheduled date for determining the relevant matter shall be specified, and when the relevant matter is confirmed, a document stating the relevant matter shall be issued without delay.
• In the case of frequent transactions in the reality of subcontract transactions, if there is no major problem in the establishment and maintenance of the contract in light of the characteristics of the industry or reality, the obligation to issue written documents may be performed differently from the stated matters and the issuance time of the written documents.

• However, in this case, it means the following situation.
→ When the basic contract has been issued and the order has been placed through other electrical and electronic behaviours such as facsimile transmission and the contents of the order are objectively clear
→ An act of refusing or delaying the delivery of ordered items
→ Where the basic contract is sent and the offer sheets submitted by the subcontractor to the principal contractor while manufacturing goods for export may be replaced with an individual contract

2) Estimation of subcontract

① When A does not issue a subcontract contract based on the provisions of Article 3, Paragraph 2 of the Subcontract Act (including cases where documents are issued without filling out some matters pursuant to Paragraph 3), the subcontractor may request confirmation by notifying a written document that contains the details of the work entrusted, subcontract price, the date of consignment, the name and address of the business A and B, and other details entrusted by the principal contractor. In this case, B shall use the “Request for Confirmation of Consignment Details” of the 「Guidelines for Fair Subcontract Transactions」 as a standard form.
② A must reply to B in writing of its intention to acknowledge or deny the contents within 15 days after receiving the request for confirmation of consignment details from B. In this case, A shall use the “standard form of reply to the request for confirmation of consignment details”, but a similar form may be used.
③ If A does not send a reply within 15 days, it shall be presumed that the consignment has been made as notified by B, except in cases where a reply is impossible due to natural disasters or other events.
④ The written notice of the request for confirmation of the above consignment details and written reply to the request for confirmation of the consignment details shall be sent to the addresses of A and B, and the contents-certified mail or other method that can objectively confirm the contents and receipt of the notice and reply (excluding e-mail).

3) Written document on reduction of subcontract price

If A does not pay the subcontract price set when A consigns manufacturing, etc. to B, but wants to pay by deducting it from the amount, a reduction document shall be issued to B. When delivery is frequent, the basic contract is concluded first, and for each delivery, the purchase order (including the electronic order form) issued by A is replaced by an individual contract, the time when the contents of the order are notified to B shall be the time of consignment.

① Matters to be stated in writing
Reasons and standards for reduction, quantity of object, etc. subject to reduction, reduction amount, reduction method such as deduction, other matters to prove the justification of the reduction, etc.
② Time of issuance of the written documents
When A reduces the amount, a written document of reduction shall be issued to B in advance before the reduction is made.

③ Written document issuance method

• A shall issue a contract signed or signed and sealed by the Company or its representative.
• If the document does not contain the signature or seal of the parties to the subcontract transaction, it shall be considered non-issuance in writing.
• Written documents may be issued by providing electronic records such as e-mail and web portals.

④ Exception
For matters that are difficult to confirm at the time of consignment, A may issue a document without stating the relevant matters only if there is a justifiable reason. However, even in this case, the reasons why the relevant matter has not been determined and the scheduled date for determining the relevant matter shall be specified, and when the relevant matter is confirmed, a document stating the relevant matter shall be issued without delay.

4) Written request to provide technical data

When A requires B to provide technical data due to a justifiable reason, A shall issue a written request to B.

① Matters to be stated in writing
The name and scope of the technical data, the purpose of the request, matters related to confidentiality*, the relationship of attribution of rights*, the price of the technical data, the request date, the delivery date, the delivery method, the period of use, the return (discard) date, the return (discard) method , other matters that can prove that A’s request to provide technical data is justified, etc.

• Matters concerning confidentiality: Specify which part of the technical data to keep confidential, and attach a mutually agreed confidentiality memorandum, etc.
• Attribution of rights: The current owner of the rights to the technical data requested by A, whether a mutual technology transfer contract has been concluded, whether the requested technology is jointly developed technology, mutual agreement on the ownership relationship after the technical data is provided, etc.
② Time of issuance of the written documents
In the case where A requests the provision of technical data, in principle, it shall issue a document to B without delay after determining the name and scope of the technical data, the purpose of the request, matters related to confidentiality, the relationship of attribution of rights, the price of the technical data in advance in consultation with B.
③ Written document issuance method

• A shall issue a technical data request document signed (includes certified digital signatures pursuant to subparagraph 3 of Article 2 of the Electronic Signature Act.) or signed and sealed by the company or its representative.
• When A requests B in writing for technical data, if possible, the “Guidelines for the evaluation of technical data provision and misuse” (standard written form (Form 1) for technical data request of Fair Trade Commission Regulation No. 115) shall be used.
• In addition to the above standard form, A may provide technical data in a separate contract document such as a special agreement. However, in a separate contract document, the above 2, B. shall be included.
• Written documents may be issued by providing electronic records such as e-mail and web portals.
④ Exception

• In the case where frequent technical data requests are unavoidable in view of the characteristics of the industry or the reality of the transaction, after writing the basic information such as the name and scope of the technical data, the purpose of the request, confidentiality matters, the relationship attributable to the right, and the cost, in the signed or signed and sealed document of the Company, additional items such as the date of request, delivery date, and delivery method may be set by using the individual request form.

5) Issuance of certificate of receipt of object, etc.

① Matters to be stated in writing

Except where there is a reason to attribute A to B’s responsibility, when B delivers or provides an object, etc., A shall issue a certificate of receipt for the object, etc. to B.
② Time of issuance of the written documents

A shall immediately issue a certificate of receipt to B, even before the inspection of the object, etc.
③ Written document issuance method

Paragraph 3)-3)-③ shall apply mutatis mutandis.

6) Issuance of inspection results for objects, etc.

① After receiving the object, etc. from the subcontractor, A shall conduct the necessary inspection to confirm the completion of the object, etc. and the scope of the payment obligation, and notify B of the result in writing.
② In principle, A shall issue a written inspection result within 10 days from the date of receipt of the object, etc. from the subcontractor.
※ The date of receipt of the object, etc., shall include the date of receipt of the notice of the ready-made part in the case of consignment manufacturing.
③ However, if there is a justifiable reason as in each of the following subparagraphs, A may notify the inspection result for more than 10 days:

• In case the inspection is difficult within 10 days due to the excessive amount of inspection items
• In the case where a decision on whether or not passed the examination can be made only after a considerable period of time has elapsed due to the long period of time required for the examination
• In the case where an explicit agreement has been reached between the principal contractor and the subcontractor to extend the inspection period, etc.
④ If A does not issue the inspection result in writing to B within 10 days from the date of receipt of the object, etc., without a justifiable reason, it shall be deemed that the inspection has been passed.
⑤ Written document issuance method

Paragraph 3)-3)-③ shall apply mutatis mutandis.

7) Issuance of the contract amount change statement due to design change, etc.

① In the event that the contract amount is increased or decreased due to changes in economic conditions such as design changes or price fluctuations after the consignment of manufacturing, etc., A shall notify B of the reason and details of the increase or decrease in the amount from the ordering party.
② A shall issue the above notice to B within 15 days from the date the contract amount has been increased or decreased from the ordering party.
③ Written document issuance method

Paragraph 3)-3)-③ shall apply mutatis mutandis.

Preservation of issued written documents

1) Both A and B shall preserve the following written documents:

① Basic contract (including additional contract, change contract)
② Subcontract confirmation document
③ Written reduction
④ Request for technical data provision
⑤ Certificate of receipt of object, etc.
⑥ Inspection result notice
⑦ Notice of contract change details
⑧ Documents describing the inspection results of objects, etc., and the end date of inspection, etc.
⑨ Documents describing the payment date, amount and means of subcontract payment
⑩ Documents describing the payment date and amount of advance payment, bill discount, delayed interest, and customs refund
⑪ Documents describing the details of paid items, the date of deduction, the amount of deduction, and the reason
⑫ When adjusting the subcontract price (design change, raw material unit price, etc.), documents describing the adjustment amount and reason
⑬ Documents describing the partner’s application for unit price adjustment and consultation details, adjustment amount and reason for the adjustment
⑭ Bid specification, written agreement to determine the successful bidder, quotation, site description, design description, pricing agreement

2) Written documents to be preserved shall be preserved in their original state at the time they are used for issuance, submission, and other purposes. It shall be the same for the creation, transmission, reception, or stored in electronic form by a device with the information processing capability, such as a computer.

3) A and B shall preserve the above documents for 3 years (for ④, 7 years) from the date of delivery of the object consigned to A by B. However, if the subcontract is terminated midway or the transaction is suspended, it shall be counted from the date of termination or suspension.