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Advisory on Contract Interpretation Regarding Unsettled Payments on an Online Marketplace

Advisory on Contract Interpretation Regarding Unsettled Payments on an Online Marketplace

Advisory on Contract Interpretation Regarding Unsettled Payments on an Online Marketplace
Table of Contents

1. The Client's Situation

A consumer-goods distribution company had entered into a tenancy (store-entry) agreement with the operator of a large online platform and, through that platform, had sold its products on several affiliated shopping malls as well. However, when some of the affiliated shopping malls entered corporate rehabilitation proceedings, the company was unable to be settled for approximately KRW 100 million in sales proceeds through that channel. As the platform operator denied responsibility for payment, the distribution company requested advice to confirm whether a claim for settlement was legally possible.

After comprehensively reviewing the structure of the contract, the actual sales flow, online notices, and other materials, Your Legal Team conveyed the opinion that the platform operator was likely a mere intermediary and was unlikely to qualify as a typical commission agent (consignment seller) under the Commercial Act. In particular, on the basis that the selling name and the method of settling proceeds did not match the requirements for commission sales, we set out the position that it would be difficult to find that the operator bore legal liability for payment.

3. Outcome

By clearly understanding the legal interpretation of the transaction structure, the client was able to avoid an unnecessary legal dispute and to carefully redesign its direction for settlement-related negotiations and risk management going forward. In addition, by combining its own legal review with the external advisory opinion, the client was able to prepare a more reasonable response rationale for external purposes.

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