A civil contract is an agreement between the parties to establish, change or terminate civil rights and/or obligations.
Article 389.- Principles for entering into civil contracts
The entry into a civil contract must adhere to the following principles:
1. Freedom to enter into the contract, provided that it is not contrary to law and social ethics;
2. Voluntariness, equality, goodwill, cooperation, honesty and good faith.
Article 390.- Offering to enter into civil contracts
1. Offering to enter into a contract means the expression of the intention to enter into the contract and to be bound on this offer of the offering party to the other specified party.
2. In cases where the offer to enter into a contract clearly state the time limit for reply and the offer or enters into the contract with a third party within such time limit, he/she/it must pay compensation for damage to the offeree and must not enter into the contract if damage is caused.
Article 391.- Time when an offer to enter into a civil contract takes effect
1. The time when an offer to enter into a civil contract takes effect shall be determined as follows:
a/ It is fixed by the offeror;
b/ If the offeror does not fix such time, the offer to enter into a civil contract shall take effect from the time the offeree receives such offer.
2. An offer to enter into a contract shall be considered having already been received in the following cases:
a/ The offer is transferred to the place of residence, if the offeree is an individual; to the headquarters, if the offeree is a legal person;
b/ The offer is introduced into the official information system of the offeree;
c/ When the offeree knew the offer to enter into the contract by another mode.
Article 392.- Modification, revocation of offers to enter into civil contracts
1. The offeror may modify or revoke his/her offer to enter into a contract in the following cases:
a/ If the offeree receives the notice on modification or revocation of offer before or simultaneously with the time of receiving the offer;
b/ The conditions for modification or revocation of the offer arise in cases where the offeror has clearly stated the eligibility for modification or revocation of the offer when such conditions arise.
2. When the offeror changes the contents of the offer, such offer shall be considered a new offer.
Article 393.- Cancellation of offers to enter into contracts
Where the offeror exercises the right to cancel the offer as such right has been clearly stated in the offer, he/she/it must notify the offeree thereof and such notification shall take effect only when it is received by the offeree before the offeree replies to accept the offer to enter into the contract.
Article 394.- Termination of offers to enter into contracts
An offer to enter into a contract shall terminate in the following cases:
1. The offeree replies not to accept the offer;
2. The time limit for reply of acceptance has expired.
3. When the notice on modication or revocation of the offer takes effect;
4. When the notice on cancellation of the offer takes effect;
5. It is so agreed upon by the offeror and the offeree within the time limit for reply by the offeree Article 395.- Offer modification proposed by the offeree
When the offeree accepts to enter into a contract but states the conditions therefore or modifies the offer, he/she/it shall be considered having made a new offer.
Article 396.- Acceptance of offers to enter into contracts
The acceptance of an offer to enter into a contract is the offeree’s reply to the offeror on the acceptance of the whole contents of the offer.
Article 397.- Time limit for reply of acceptance of an offer to enter into a contract
1. When the offeror fixes a time limit for reply, the reply of acceptance shall be effective only when it is made within that time limit; if the offeror receives the reply when the time limit for reply has expired, the acceptance shall be considered a new offer of the party late in replying.
In cases where the notice on acceptance of an offer to enter into a contract arrives late for objective reasons which the offeror knew or would have known, such notice on acceptance of the offer to enter into the contract remains effective, except for cases where the offeror immediately replies not to agree with such acceptance of the offeree.
2. When the parties are in direct contact, including contacts via telephone or other means, the offeree must immediately reply whether to accept the offer or not, except for cases where there in an agreement on the time limit for reply.
Article 398.- Cases where offerors die or lose their civil act capacity
In cases where the offeror dies or loses his/her civil act capacity after the offeree accepts to enter into the contract, the offer to enter into the contract remains valid.
Article 399.- Cases where offerees die or lose their civil act capacity
In cases where the offeree dies or loses his/her civil act capacity after making his/her reply to accept the offer to enter into the contract, the reply of acceptance to enter into the contract remains valid.
Article 400.- Revocation of notice on acceptance to enter into contracts
The offeree may revoke his/her notice on acceptance to enter into a contract if such notice arrives before or simultaneously with the time the offeror receives the reply of acceptance.
Article 401.- Forms of civil contract
1. A civil contract can be made orally, in writing or by specific acts, unless a specific form for such type of contract is provided for by law.
2. In cases where it is provided for by law that a contract must be expressed in writing with notarization or authentication, must be registered or permitted, such provisions shall be complied with.
Contracts shall not be invalidated in case of form-related breaches, unless otherwise provided for by law.
Article 402.- Contents of civil contracts
Depending on each type of contract, the parties may agree on the following contents:
1. Object of the contract, which is a property to be handed over, or a task to be performed or not to be performed;
2. Quantity and quality;
3. Price and mode of payment;
4. Time limit, place and mode of performing the contract;
5. Rights and obligations of the parties;
6. Liability for breach of contract;
7. Sanction against breach of contract;
8. Other contents.
Article 403.- Places of entry into civil contracts
The place where a civil contract is entered into shall be agreed upon by the parties; in the absence of such agreement, the place of entry into a civil contract shall be the place of residence of the
individual or the head-office of the legal person that has made the offer to enter into the contract.
Article 404.- Time of entry into civil contracts
1. A civil contract shall be entered into at the time when the offeror receives the reply of acceptance to enter into the contract.
2. A civil contract shall also be considered having been entered into when the time limit for reply has expired and the offeree remains silent, if it is agreed upon by the parties that silence means the reply of acceptance.
3. The time of entry into an oral contract shall be the time at which the parties have agreed on the contents of the contract.
4. The time of entry into a written contract shall be the time at which the last party signs the contract.
Article 405.- Effect of civil contracts
Contracts that are legally entered into shall take effect from the time they are entered into, unless otherwise agreed upon or provided for by law.
Article 406.- Main types of civil contract Contracts shall have the following main types:
1. Bilateral contract, which is a contract under which a party has the obligation to the other;
2. Unilateral contract, which is a contract under which only one party has the obligation;
3. Principal contract, which is a contract the effect of which does not depend on the auxiliary contract;
4. Auxiliary contract, which is a contract the effect of which depends on the principal contract;
5. Contract for the benefit of a third party, which is a contract under which the contracting parties must perform their obligations and the third party shall enjoy benefits from the performance of such obligations;
6. Conditional contract, which is a contract the performance of which depends on the occurrence, change or termination of a certain event.
Article 407.- Standardized contracts
1. A standardized contract is a contract which contains provisions prepared by one party according to a standard contract and given to the other party for reply within a reasonable period of time; if the offeree gives its reply of acceptance, he/she/it shall be considered having accepted the entire content of the standardized contract offered by the offeror.
2. In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions.
3. In cases where a standardized contract contains provisions exempting the liability of the offeror of the standardized contract, while increasing the responsibility or abolishing legitimate interests of the other party, such provisions shall not be valid, unless otherwise agreed upon.
Article 408.- Appendices to contracts
1. Appendices may be attached to a contract to detail some provisions of the contract. Appendices shall be as effective as the contract. The contents of appendices shall not be contrary to the contents of the contract.
2. In cases where appendices contain provisions contrary to the contractual provisions, such provisions shall not be valid, unless otherwise agreed upon. In cases where the parties accept appendices with provisions contrary to contractual provisions, such contractual provisions shall be considered having been amended.
Article 409.- Interpretation of civil contracts
1. When a contract contains ambiguous provisions, the interpretation of such provisions shall be based not only on the wording of the contract but also on the mutual intentions of the parties.
2. When a contractual provision may be construed in several meanings, the meaning which makes the implementation of such provision most beneficial to the parties shall be selected.
3. When a contract contains wordings that may be construed in different meanings, such wordings must be interpreted according to the meaning which is most appropriate to the nature of the contract.
4. When a contract contains a provision or wording that is difficult to understand, such provision or wording must be interpreted according to practices at the place where the contract is entered into.
5. When a contract lacks some provisions, such provisions may be supplemented according to practices at the place where the contract is entered into.
6. The provisions of a contract must be interpreted in relation to each other, so that the meanings of such provisions conform to the whole contents of the contract.
7. In case of contradiction between the mutual intentions of the parties and the contractual wordings, the mutual intentions of the parties shall be used for interpretation of the contract.
8. In cases where the advantageous party includes in the contract the contents unfavorable for the disadvantageous party, the interpretation of the contract must be made along the direction of benefiting the disadvantageous party.
Article 410.- Invalid civil contracts
1. The provisions on invalid civil transactions in Articles 127 thru 138 of this Code shall also apply to invalid contracts.
2. The invalidation of principal contracts shall terminate the auxiliary contracts, except in cases where the parties agree that the auxiliary contracts can replace the principal contracts. This provision shall not apply to the security measures for performance of civil obligations.
3. The invalidation of the auxiliary contracts shall not terminate the principal contracts, except for cases where the parties agree that the auxiliary contracts constitute inseparable parts of the principal contracts.
Article 411.- Civil contracts invalidated due to the existence of objects which cannot be realized
1. In cases where a contract, right at the time it is entered into, contains an object which cannot be realized for objective reasons, such contract shall be invalidated.
2. In cases where a contract is entered into and a party knew or would have known that the contract contains an object which cannot be realized but fails to notify such to the other party that has, therefore, entered into the contract, the former must pay damages to the other party, except for cases where the other party knew or would have known the object which cannot be realized.
3. The provisions of Clause 2 of this Article shall also apply to cases where a contract contains one or many parts of an unrealizable object, while the remaining part of the contract remains legally valid.