Standard Terms Act Lawyer
Standard Terms Act Lawyer | Reviewing Clause Validity and Regulatory Exposure
The Act on the Regulation of Terms and Conditions (약관의 규제에 관한 법률) governs standardized contract terms that one party drafts in advance for repeated use with many counterparties — insurance policies, membership agreements, lease templates, app terms of service, and more. Because the drafting party has no chance to negotiate individually with each customer, the Act sets out interpretation rules and voids clauses that unfairly favor the drafter (약관의 규제에 관한 법률 제6조). Disputes typically arise either in private litigation over whether a clause binds a consumer, or in a Fair Trade Commission administrative review that can order a business to revise or delete a clause.
Standard Terms Act | What Counts as a "Standard Term" and When the Act Applies
Not every contract clause is subject to this Act — the threshold question is whether the term was pre-drafted for use in multiple transactions.
Definition of standard terms
A standard term is contract content that one party prepares in advance in a fixed form to use in concluding contracts with multiple counterparties, regardless of its name, form, or scope (약관의 규제에 관한 법률 제2조 제1호). Whether a specific clause is a 'standard term' or an individually negotiated agreement is often disputed itself, since individually negotiated terms fall outside the Act's protections.
Explanation and delivery duties
A business using standard terms must generally provide a copy to the customer and explain material terms in a way the customer can understand; a clause the business failed to explain generally cannot be asserted against the customer (약관의 규제에 관한 법률 제3조). This is frequently the first point checked when a consumer disputes being bound by a clause they say they never saw explained.
Interpretation principles
Standard terms must be interpreted uniformly according to the recipients' average understanding, and if a clause is ambiguous, it should be interpreted in the way most favorable to the customer (약관의 규제에 관한 법률 제5조). This 'contra proferentem'-style rule often becomes the deciding factor when a clause's wording is genuinely open to more than one reading.
Standard Terms Act | How a Clause Becomes Void
The Act does not ban standard terms outright — it lists categories of clauses presumed or deemed unfair, and voids them regardless of what the contract says elsewhere.
The general clause on unfair terms
A standard term that violates the principle of good faith and fairness by unreasonably disadvantaging the customer is void (약관의 규제에 관한 법률 제6조). This general clause works alongside more specific provisions and is often the fallback argument when a clause does not fit neatly into a listed category.
Specific categories of invalid clauses
The Act separately voids clauses that unreasonably exempt the drafter from liability, excessively restrict the customer's right to terminate or claim damages, or unfairly limit the customer's procedural rights, among other categories (약관의 규제에 관한 법률 제7조부터 제14조). Which category applies often shapes the argument more than the general good-faith clause, since courts tend to check the specific provisions first.
Effect of partial invalidity
If part of a standard term is void, the contract remains valid as to the rest in principle, unless continuing the contract without the void clause would be unreasonably harsh on one party, in which case the whole contract can become invalid (약관의 규제에 관한 법률 제16조). This means a single problematic clause rarely voids an entire agreement by itself.
Standard Terms Act | Fair Trade Commission Review and Corrective Orders
Beyond private disputes, the Fair Trade Commission can review standard terms on its own initiative or upon report and order businesses to correct unfair clauses.
Who can request review
Consumers, consumer organizations, and trade associations can request the Fair Trade Commission examine whether specific standard terms are unfair, and the Commission can also initiate review on its own (약관의 규제에 관한 법률 제19조 및 제19조의2 관련 조항 참조). A business subject to review is generally given an opportunity to submit its position before any order is issued.
Corrective orders and their consequences
Where the Commission finds a clause unfair, it can order the business to delete or amend the clause, and non-compliance can lead to further sanctions; the decision itself is also subject to administrative appeal or litigation by the business (약관의 규제에 관한 법률 제17조의2 및 제34조 관련 조항 참조). Businesses operating widely-used standard terms should treat a Commission inquiry as a signal to review their full template, not just the flagged clause.
Standard Terms Act | From Initial Review to Resolution
We map the disputed contract or terms of service against the Act's specific invalidity categories and the general good-faith clause to identify which provisions are genuinely at risk.
We assess whether the matter is better addressed through private negotiation or litigation over the clause's effect, or through a Fair Trade Commission complaint or defense against an ongoing Commission review.
For businesses, this means preparing an explanation of the clause's commercial rationale and any customer notice/consent process; for consumers, it means documenting whether the clause was actually explained before signing.
Many disputes resolve through revised contract language or a settlement before a formal decision; where they do not, we proceed through litigation or through the administrative process before the Commission.
If a clause is found void or ordered corrected, we advise on revising the remaining template to avoid the same issue recurring across other contracts using the same standard terms.
Standard Terms Act | How Fees Are Set
Fees for the first review of the standard terms or contract in question are generally set based on the volume of clauses and complexity of the dispute, not a fixed flat rate.
Where litigation or a formal Fair Trade Commission proceeding is pursued, a retainer is set considering the number of disputed clauses, the amount in controversy if any, and the forum involved.
For monetary disputes, a success fee tied to the outcome may be agreed separately from the retainer; this does not apply to advisory-only engagements such as template review.
Costs such as filing fees, document translation, and expert opinions (where relevant to industry-specific terms) are billed separately as incurred.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
