1. The Client's Situation
The client operated a business that supplied and installed video display equipment at stores affiliated with a large franchise chain. Based on a contract with the prime contractor, the structure had two cooperating partner companies actually performing the supply and installation work. However, under the existing contract structure, the division of roles and scope of responsibility for the supply, installation, and maintenance work were not clearly defined, creating a risk that the responsible party would become unclear in the event of defects, requests for reinstallation, after-sales service responses, and the like. In particular, since the allocation of authority and responsibility among the company that directly contracted with the prime contractor, the partner company serving a management role, and the company actually performing the installation had not been organized, the possibility of future disputes was raised. Accordingly, the client requested legal advice on reorganizing a contract framework that would reflect the three-party work-performance structure.
2. Your Legal Team's Advice
After reviewing the prime contract structure and the actual flow of work performance, Your Legal Team provided advice in the direction of designing a three-party contract structure that clearly reflected the roles of the prime contracting party and the partner companies. In particular, we revised the contract provisions so that the party performing each stage of work—goods supply, installation, maintenance, order management, and claim handling—was clearly distinguished under the contract, and so that management responsibility and operational performance responsibility were separately stipulated. In addition, while maintaining the contractual relationship with the prime contractor, we supported reflecting in the contract a response framework for defects, claims, and non-performance situations that could arise during the performance of work, by clarifying the management and supervisory relationship and the joint-and-several liability structure among the partner companies. Furthermore, taking into account practical risks that could arise during actual operations—such as installation completion reports, the order-relay system, and the after-sales service response method—we organized the contract in a direction that supplemented the contract wording.
3. Result
Through this advice, the client was able to establish a three-party contract framework in which the roles and responsibilities among the prime contractor, the management company, and the execution company were clearly distinguished. Accordingly, the client was able to preemptively block the possibility of liability disputes arising in the supply, installation, and maintenance process, and to organize its partner-company management and operating structure more stably. In addition, by preparing a contract structure that anticipated various situations such as non-performance of work, occurrence of defects, and after-sales service responses, the client was able to effectively reduce legal risks that could arise in the course of future business operations.
Your Legal Team provides practice-oriented advice on the various legal risks that arise in the course of corporate operations, including contract structure design, the reorganization of partner-company management systems, and the review of supply and installation contracts.