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Subcontract Price Reduction South Korea – Legitimate Grounds Analysis

Under Article 11(1) of South Korea’s Fair Transactions in Subcontracting Act, reducing an agreed subcontract price is presumptively prohibited. A reduction based on raw material cost declines or exchange-rate movements requires prior agreement, a bidirectional adjustment history, and a rationally calculated amount — all three must be established. Case Background An automotive air-conditioning parts manufacturer […]

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