Hello, this is Attorney Park Jong-han from Cheongchul Law Firm.

In national contracts, it is common for contracts to consist of general contract conditions and special contract conditions. Usually, contracts are concluded based on the special contract conditions prepared by each contracting authority in addition to the general contract conditions, through the agreement of the parties involved. In cases where the contents of the general contract conditions and the special contract conditions conflict, it can be a question of which conditions take precedence.

[Question]

What is the priority between the general contract conditions and the special contract conditions in national contracts?

[Answer]

A contract involving the state does not differ in essence from a contract between private parties, unless there are special provisions in the law, the provisions of civil law or legal principles apply as they are, and if it is clearly demonstrated that the content of the contract seeks to exclude the provisions of national contract law or does not contradict it, it is necessary to respect what is stipulated by national contract law, that is, the relevant contract clause should be interpreted as supplementing or specifying the provisions of national contract law.

The Supreme Court ruled regarding national contracts consisting of general and special contract conditions that, "The special conditions of the goods purchase contract are made pursuant to Article 3, Paragraph 2 of the general conditions of the goods purchase contract and are established for the proper execution of the contract, aside from the general matters defined in relevant laws or the general conditions of the goods purchase contract, therefore if interpreting ‘other contract documents’ in Article 3, Paragraph 1 of the special conditions to exclude ‘general conditions’, there is a risk of nullifying the intention behind the special conditions. Considering that the essence of a contract involving the state does not differ from a contract between private parties, there is no reason to exclude the ‘general conditions of the goods purchase contract’ from ‘other contract documents’ in Article 3, Paragraph 1 of the special conditions." (Refer to Supreme Court 2012. 12. 27. Judgment 2012Da15695), according to the intention of the Supreme Court, the relationship between general contract conditions and special contract conditions is that the special contract conditions take precedence when considering the purpose of the special contract conditions.

Therefore, in national contracts, it is stipulated that the special contract conditions take precedence over the general contract conditions, and in cases where the contents of the general contract conditions and the special contract conditions conflict, the special contract conditions should be regarded as taking precedence.

Thus, we have briefly looked at the priority between the general contract conditions and the special contract conditions in national contracts. In cases of disputes related to national contracts and public procurement, the relevant laws are very complex and subject to frequent amendments, so a good understanding and experience in this regard are necessary, and one must also be well aware of the administrative agency’s authoritative interpretations and case dispositions as well as court rulings. Therefore, I strongly recommend seeking assistance from attorneys who have expertise in national contract law and experience in resolving disputes related to various national contracts and procurement.

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