KH friends must know the Korean drama Start-Up which was booming yesterday? Because it’s really cool, this drakor makes many people divided, you know. There are 2 camps to choose from, team Nam Do-San or team Han Ji Pyeong. While it’s still warm, KH Friend still remembers the episode of Seo Dal Mi who arbitrarily signed an acquisition contract with the 2STO company? Well, from that episode it turns out we can learn something, you know! As in the drama, the negligence of signing the contract brought disaster to Samsan Tech. Samsan Tech as a company acquired by 2STO did get 3 billion won, but as a result 2STO only took Samsan Tech’s development team, namely Nam Do San, Yong San, and Chul San. This means that Seo Dal Mi as Samsan Tech’s CEO and Jung Sa Ha as a designer are not needed for 2STO. Samsan Tech was so tempted by the acquisition amount offered that it could not detect the danger that came with signing the contract. Han Ji Pyeong, Samsan Tech’s mentor, also stated that the acquisition contract was too good to be true for Samsan Tech, which had no steady income. It is true that 3 billion won is not an opportunity that can come twice for a new startup, but it is also certain that there is always a shrimp behind the stone. In the end, they had to disband. The development team was taken to America by 2STO, while Seo Dal Mi and Jung Sa Ha remained in South Korea. So, what can be learned? Contracts, of course! Contracts are crucial in doing business. A contract is an agreement between two or more people that obliges the parties to do or not do something. In this case, the parties are 2STO and Samsan Tech. Contract law confirms that a contract gives birth to an obligation between the parties. Seo Dal Mi as the CEO of Samsan Tech cannot just cancel the contract unilaterally, because in making the acquisition contract, the legal requirements of the agreement have been fulfilled. As a reminder, the legal requirements of an agreement are the capacity of the parties, the agreement of the parties, the existence of certain things or objects, and a lawful cause (not contrary to applicable law, decency, and public order). The signing of a contract brings several legal consequences, namely that it applies as a law to the parties who make it (pacta sunt servanda). The signed acquisition contract creates an obligation between the parties, and the parties must carry out what is stated in the contract like a law. Furthermore, it cannot be canceled unilaterally but both parties. When signing, Seo Dal Mi agreed to the acquisition contract. But apparently, Samsan Tech was forced to disband. Seo Dal Mi or Nam Do San cannot cancel the contract because surely 2STO will not agree to this and the contents of the contract made are not found violations. The dismissal of Seo Dal Mi and Jung Sa Ha was purely due to inaccuracy in reading the contract. If Samsan Tech decides not to fulfill its obligations, 2STO could sue Samsan Tech for default.
Then, the signed contract must be executed in good faith and with good intentions. The development team that eventually went to America still had to carry out the obligations stated in the contract with good intentions. From the episode, we can also find out what things must be considered in the contract, namely the background, the purpose and objectives of the agreement, the type of agreement, the parties involved in the agreement, the rights and obligations of each party, and the settlement efforts in the event of a dispute or different interpretation. Read also:
- Check out, 8 Reasons Why Many Startup Companies Fail!
- Here are the Legal Documents and Costs to Establish a Startup!
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For those of you who are starting a business, understanding contracts is one of the weapons to grow your business. Contracts will be very often encountered when you work with other parties. So, don’t let your company have the same fate as Samsan Tech! If you have any problems or questions about contracts, please ask Kontrak Hukum. We are ready to answer and provide contract drafting services. #SaveHanJiPyeong #TeamHanJiPyeong. Visit and contact:
