As the subcontract law was established for the past 20 or more years, unfair trade actions have been continuously corrected and related systems have been developed. However, in general there are still many unfair subcontracting practices, and it has been pointed out that the implementation of the law should be improved to reflect reality. This thesis aims to identify various problems related to the issuance of the relevant documents, which is a cornerstone and a starting point of subcontracts, and to suggest ways to solve them.
When subcontract documents are not issued, the dominance position of anoriginal contractor in trade is shown most clearly until the details of subcontracts are recorded. When there is no written subcontract to which the subcontract law applies, there is no appropriate wayto protect subcontractors. Even though the subcontract law stipulates the responsibilities of an original contractor to issue and keep documents, sanctions against the violation of the responsibilities are weak. Meanwhile, as for subcontract transactions, private freedom tends to be predominantly adopted in the United States and Europewhere the principle of free contracts has been encouraged. So, in the long run, it seems advisable to let private self-administration govern the subcontract contracts in Korea. However, for the time being, considering the trade tendencies in Korea, it seemsnecessary for the government to intervene to some extent. Korea needs to learn a great lesson from Japan which plans to legislate "the law to prevent delay in paying subcontractors" where the severest punishment will be applied to the case of un-issuance of the subcontract documents.
If subcontract documents are not issued, it is worried that an original contractor will arbitrarily request subcontractors to take all the risks that can emerge during the implementationof a contract. It is difficult to demonstrate the conclusion of a trade contract or the details of a contract when conflicts happen. Furthermore, an original contractor can easily get around the restrictions of the subcontract law.
The followings could be the solutions to subcontracting practices without written subcontract documents. First of all, in case of oral orders, if appropriate, subcontracts should be established in consideration of the characteristics and purposes of the subcontract law. Against the case of un-issuance of the documents, new stipulations on criminal punishments should be made and/or other sanctions should be strengthened. It should be stipulated additionally that subcontractors have rights to put forward the claim that their original contractor compensate for the damages caused by unjust cancellation of a contract. In addition, a standard form of written subcontract should be mandated to be used and a ban should be placed on special provisions which institutes unfair contracts.
Article 19 of the national contract law stipulates that when there is a change in design and others, payments for subcontracts should be adjusted in proportion to the change in the original trade. This stipulation is essential for protecting the interestsof subcontractors since it states that adjustments should be made within 30 days in the same manner and proportion, if the order placer has adjusted its payment to the original contractor, as the changes in construction design and/or commodity prices. However, there is no specific provision about 'the same manner and proportion,'which leads to an unfair interpretation of the law. Moreover, it is pinpointed that the mentionedstipulation is too lenient with the original contractor, who may make relevant adjustments within 30 days irrespective of his/her faluts. So, there need to be reasonable complements to the stipulation.
Concluding a double contract should be avoidedbecause this action systematically comes from the practice that the order placer does not want to approve the contents of a subcontract contract. The problem also leads to another serious case of unfair trade that the money which should be invested in production is used for other purposes and brings about shoddy and fault construction and corruption. A fundamental countermeasure need be urgently put in place.
In conclusion, a true mechanism of subcontract transactions can be established when the governmenthas a strong will to make systematic complements and enforce the laws and regulations appropriately. However, before that, original contractorsneed be very willingto observe the appropriate laws and regulations and change his/her mind so as to recognize his/her subcontractors as a business partner and treat them fairly. Conversely, it is also very important for subcontractors to be equipped with competitive expertise, technologies and production facilities to betrusted by the original contractor. If the original contractor and his/her subcontractors consider the other party as a business partner and cooperate with each other, fair subcontracting practices will be established.