건설산업기본법

Article 1Purpose

The purpose of this Act is to ensure the proper execution of construction works and the sound development of the construction industry by providing for fundamental matters concerning the survey, design, execution, supervision, maintenance and management, technological management, etc. of construction works and for other matters necessary for the registration of construction business, contracts for construction works, etc.[This Article Wholly Amended on May 24, 2011]

Article 2Definitions

The terms used in this Act are defined as follows: <Amended on Aug. 14, 2018; Apr. 30, 2019; Jun. 9, 2020; Aug. 8, 2023>1. The term "construction industry" means construction business and construction service business.

2. The term "construction business" means the business of performing construction works;

3. The term "construction service business" means the business of rendering services related to construction works (hereinafter referred to as "construction services"), such as surveys, design, supervision, project management, and maintenance and management in respect of construction works;

4. The term "construction works" means civil engineering works, building works, industrial equipment works, landscaping works, environmental installation works, and other works to install, maintain and repair facilities (including site preparation works for installing such facilities), regardless of their names, as well as installation and dismantling works, etc. of machinery and equipment and other structures; provided, the following works shall be excluded:a. Electric works under the Electrical Construction Business Act;b. Information and communications works under the Information and Communications Construction Business Act;c. Firefighting system installation works under the Firefighting System Installation Business Act;d. Construction works to maintain national heritage under the Act on National Heritage Maintenance;

5. The term "general construction works" means any works to construct facilities under comprehensive planning, management and coordination;

6. The term "specialized construction works" means any works to construct a part of facilities or any works in a specialized field;

7. The term "constructor" means a person who runs construction business after registration, etc. under this Act or other statutes;

8. The term "construction management" means the management of construction works, including planning, feasibility studies, analysis, design, procurement, contracts, execution management, supervision, assessment and follow-up management;

9. The term "construction management at-risk" means a method by which a constructor who has filed for registration of the business category of performing general construction works performs construction management for construction works in the pre-construction phase as well as constructing facilities within a fixed price and period through comprehensive planning, management and coordination under a separate agreement on execution and construction management with the relevant project owner, in the construction phase;

10. The term "project owner" means a person who awards contracts for construction works to constructors; provided, any contractor who subcontracts construction works contracted to him or her to others shall be excluded;

11. The term "contract" means a contract under which, regardless of its names, such as a prime contract, subcontract and entrustment, one contracting party promises to complete construction works and the other contracting party commits itself to make payments for the results of the works;

12. The term "subcontract" means a contract which a contractor concludes with a third party to outsource all or part of construction works contracted to him or her;

13. The term "contractor" means a constructor awarded a contract for construction works by any project owner, including constructors who subcontract in cases of subcontracts;

14. The term "subcontractor" means a person awarded a subcontract for construction works by a contractor;

15. The term "construction engineer" means a person deemed to have expertise or skills in construction works under related statutes or regulations.[This Article Wholly Amended on May 24, 2011]

Article 3Fundamental concepts

The fundamental concepts of this Act are to contribute to the national economy and the security of the daily life of the citizens by developing the construction industry in a balanced manner to attain international competitiveness in the fields of design, supervision, execution, project management, maintenance and management, and the like.[This Article Wholly Amended on May 24, 2011]

Article 4Relationship to other statutes

Except as provided in other statutes, this Act shall apply to the construction industry; provided, this Act shall prevail with respect to matters concerning the scope of construction works and the registration of construction business, and Articles 6 and 26 and Chapter VIII (Articles 69 through 79,79-2 and 80) shall apply to construction service business, notwithstanding other statutes. <Amended on Aug. 6, 2013>[This Article Wholly Amended on May 24, 2011]

Article 5Determination of standards for foreign constructors

The Minister of Land, Infrastructure and Transport may determine standards for recognizing qualification, academic background, career, etc. obtained in a foreign country with respect to construction business, if necessary for registering construction business of foreigners or foreign corporations. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011][Title Amended on Apr. 30, 2019]

Article 6Establishment of master plans for construction industry promotion

(1) The Minister of Land, Infrastructure and Transport shall establish and implement a master plan for the promotion of the construction industry every five years in order to foster the construction industry, develop construction technology, and to ensure the safety and quality of construction works, etc. <Amended on Mar. 23, 2013>(2) A master plan for construction industry promotion referred to in paragraph (1) shall include the following:

1. Basic direction-setting for policies to promote the construction industry;

2. Measures for the development of construction technology and training of construction engineers;

3. Internationalization of the construction industry and support for its entry into overseas markets;

4. Measures for ensuring the safety, environmental conservation and quality of construction works;

5. Measures for the growth of small or medium construction business and small or medium construction services business;

6. Measures for improving the productivity of construction works and other matters prescribed by Presidential Decree.

(3) The Minister of Land, Infrastructure and Transport may establish and implement an annual plan within the scope of the master plan for the promotion of the construction industry referred to in paragraph (1) in consideration of the trends in the construction market, development of construction technology, etc. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 7Responsibilities of construction-related entities

(1) The Government shall determine and disseminate standards for the design, execution, supervision and maintenance and management of construction works, the quality and standards of construction materials, the methods of contracting, etc. to ensure the quality and safety of construction works and endeavor to provide information, such as the execution capacity, capital, management status and performance records of construction works of constructors. <Amended on Apr. 30, 2019>(2) Any project owner of construction works shall select a competent constructor according to fair standards and procedures to ensure that facilities are constructed suitable for public safety and welfare, and shall endeavor that the construction works shall be appropriately executed. <Amended on Apr. 30, 2019>(3) A constructor is responsible for faithfully performing the following: <Amended on Jul. 27, 2021>1. To comply with statutes or regulations related to construction works and construction services in order to ensure the quality and safety of facilities;

2. To comply with labor-related statutes or regulations, such as directly paying wages to construction workers in accordance with the Labor Standards Act;

3. To perform work faithfully in accordance with the design drawings, specifications, and the contract;

4. To not falsely provide or advertise information on performance records of construction works, status of affiliated engineers, financial status, or other information related to execution capacity.[This Article Wholly Amended on May 24, 2011]

Article 8Categories of construction businesses

(1) Construction businesses shall be classified into a business of performing general construction works and a business of performing specialized construction works.

(2) The specific categories and scope of duties of construction businesses shall be prescribed by Presidential Decree.[This Article Wholly Amended on May 24, 2011]

Article 9Registration of construction business

(1) Any person who intends to run construction business shall file for registration with the Minister of Land, Infrastructure and Transport by category of business prescribed by Presidential Decree; provided, where any person intends to perform minor construction works prescribed by Presidential Decree as his or her main business, he or she may run a construction business without such registration. <Amended on Mar. 23, 2013>(2) Any person who intends to file for registration of construction business pursuant to paragraph (1) shall file an application therefor with the Minister of Land, Infrastructure and Transport, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(3) Except as otherwise provided in any other statute, no corporation in which the State or any local government has invested at least 50/100 of its capital or which is a nonprofit corporation shall file an application for registration of construction business under paragraph (1).

(4) Deleted. <Feb. 17, 2016>[This Article Wholly Amended on May 24, 2011]

Article 9-2Issuance of registration certificate

(1) Where construction business has been registered, the Minister of Land, Infrastructure and Transport shall issue a construction business registration certificate and a construction business registration pocketbook to the relevant applicant, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(2) A person who has been issued a construction business registration certificate or a construction business registration pocketbook pursuant to paragraph (1) shall, when any matter prescribed by Presidential Decree from among the entries in the relevant certificate or pocketbook has been altered, file an application for alteration with the Minister of Land, Infrastructure and Transport within 30 days, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(3) Where a construction business registration certificate or a construction business registration pocketbook under paragraph (1) is lost or rendered unusable, it may be re-issued, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 9-3Education on construction business

(1) A person who has his or her construction business registered under Article 9(1) (excluding cases where a constructor registers another category of business additionally) shall receive education on construction business ethics and practice conducted by the Minister of Land, Infrastructure and Transport within six months from the registration date of the construction business. In such cases, if a person required to receive the education is a corporation, at least one executive officer listed in the register (including the representative director) thereof shall receive the education. <Amended on Apr. 30, 2019>(2) The Minister of Land, Infrastructure and Transport may conduct education on construction business ethics and practice for the constructors other than those required to receive the education under paragraph (1), and in such cases, the period of suspension of business, etc. may be reduced for those who have completed such education, as provided for in Article 84. <Amended on Apr. 30, 2019>(3) Methods, standards, and procedures for the education under paragraphs (1) and (2), education institutions, and other necessary matters shall be prescribed by Presidential Decree.[This Article Added on Aug. 11, 2015]

Article 10Standards for registration of construction business

The following which constitutes the standards for registration of construction business referred to in Article 9(1) shall be prescribed by Presidential Decree:

1. Technical capabilities:

2. Capital (referring to the appraisal value of assets in cases of individuals; hereinafter the same shall apply);

3. Facilities and equipment;

4. Other necessary matters.[This Article Wholly Amended on May 24, 2011]

Article 11Restrictions on indications and advertisements

(1) No one who fails to file for registration of construction business by business category pursuant to Article 9 shall make any indication or advertisement on the business place, advertising materials, etc. to the effect that he or she is the constructor of the relevant business category, or that may be leading to suggest that he or she is the constructor of the relevant business category. <Amended on Apr. 30, 2019>(2) The Minister of Land, Infrastructure and Transport may require a public official under his or her control to take appropriate measures, such as removing advertising materials by force, against a person who has made any indication or advertisement in violation of paragraph (1). <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 12

Deleted. <May 17, 2007>

Article 13Disqualification for registration of construction business

(1) None of the following persons (in cases of a corporation, including where it has any of the following executives) shall file for the registration of construction business under Article 9(1). The same shall also apply to a foreigner or foreign corporation that falls under any of the following cases or a similar case in the relevant country: <Amended on May 24, 2011; Jun. 1, 2012; May 14, 2014; Mar. 21, 2017>1. A person who has yet to be reinstated after having been declared bankrupt;

2. Persons under adult guardianship or persons under limited guardianship;

3. Any of the following persons whose registration of construction business was canceled under Article 82-2 or 83. In such cases, if a person whose registration of construction business was canceled is a corporation, a person who engaged in conduct which was the ground for such cancellation and its representative shall be included:a. A person in whose case 10 years have not passed since his or her registration of construction business was canceled on the ground provided for in subparagraph 5 of Article 83;b. A person whose registration of construction business was canceled on any ground provided for in Article 82-2(3) and subparagraphs 1,3-3,8,10 and 13 of Article 83 and in whose case five years have not passed since such cancellation;c. Deleted; <Jul. 27, 2021>d. A person in whose case one and half years have not passed since his or her registration of construction business was canceled for reasons other than those under Article 82-2(3), and subparagraphs 1,3-3,4,5,8,10, and 13 of Article 83;

4. A person sentenced to imprisonment without labor or heavier for violation of this Act or the Housing Act, in whose case three years have not passed from the date the execution of the relevant punishment was completed (including where such execution is deemed completed) or exempted;

5. A person sentenced to imprisonment without labor or heavier for committing any crime provided for in Articles 129 through 133 of the Criminal Act, in whose case five years have not passed from the date the execution of the relevant punishment was completed (including where such execution is deemed completed) or exempted;

6. A person under suspended execution of sentence for a violation of subparagraph 4 or 5.

(2) Deleted. <Nov. 8, 2005>(3) The Minister of Land, Infrastructure and Transport shall notify a person disqualified for registration of construction business under paragraph (1), among applicants for such registration under Article 9(2), of the ground therefor. <Amended on May 24, 2011; Mar. 23, 2013>[Title Amended on Apr. 15, 1999; May 24, 2011]

Article 14Continued works after disposition of business suspension

(1) A constructor subject to a disposition of business suspension or cancellation of registration pursuant to Article 82,82-2, or 83 and his or her general successor may continue to perform construction works for which he or she has concluded a contract before the disposition is issued or for which he or she has commenced the construction works with permission, authorization, etc. under related statutes or regulations. The same shall also apply where registration of construction business is canceled by a report on the closure of business filed under Article 20-2. <Amended on Apr. 30, 2019>(2) A constructor subject to a disposition of business suspension or cancellation of registration pursuant to Article 82,82-2, or 83 and his or her general successor shall notify without delay the project owner of the relevant construction works of the details of the disposition, and where the constructor is a subcontractor, he or she shall notify the project owner and the contractor of the details of such disposition. The same shall also apply where registration of construction business is canceled by a report on the closure of business filed under Article 20-2. <Amended on Apr. 30, 2019>(3) Where any constructor continues construction works after his or her registration of construction business has been canceled under paragraph (1), he or she shall be deemed a constructor until he or she completes such works. <Amended on Apr. 30, 2019>(4) Any project owner of construction works may terminate a contract for work within 30 days from the date he or she receives notification under paragraph (2) from the relevant constructor or the date he or she becomes aware of such fact in the absence of special circumstances. <Amended on Apr. 30, 2019>(5) Where a project owner receives notification referred to in paragraph (2) from a subcontractor who is the constructor, he or she may request the contractor to terminate subcontracts of the relevant works. <Amended on Apr. 30, 2019>(6) Where a contractor receives notification referred to in paragraph (2) from a subcontractor, he or she may terminate the subcontract within 30 days from the date he or she receives such notification or becomes aware of such disposition (or the date he or she receives a request for cancellation of the subcontract pursuant to paragraph (5), if applicable) in the absence of special circumstances.[This Article Wholly Amended on May 24, 2011]

Article 15

Deleted. <Apr. 15, 1999>

Article 16Qualifications for performing construction works

(1) A constructor who intends to be awarded a contract for general construction works shall file for registration of the business category of performing the relevant general construction works; provided, in any of the following cases, a constructor may be awarded a contract for general construction works without filing for registration of the business category of performing the relevant general construction works: <Amended on Apr. 30, 2019; Dec. 29, 2023>1. Where a constructor who has filed for registration of two or more business categories of performing specialized construction works is awarded a contract for specialized construction works within such business categories;

2. Where a constructor qualifying for the execution of general construction works is awarded a contract for general construction works for planning, management and adjustment, jointly with another constructor qualifying for the execution of specialized construction works, under the condition that the constructor qualifying for specialized construction works shall perform the required specialized construction works;

3. Where two or more constructor who have filed for a business category of performing specialized construction works are jointly awarded a contract for general construction works consisting of specialized construction works within the business category, based on such considerations as work process management and the distinction of defects liability, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport;

4. Where a constructor who has filed for registration of the business category of performing general construction works is awarded a contract for specialized construction works that the constructor can perform for a certain facility under Article 8(2), as prescribed by Ministerial Decree of the Land, Infrastructure and Transport; provided, this excludes cases where a prime contract is awarded for specialized construction works for which the estimated price is less than 430 million won (including value-added tax under the Value Added Tax Act and material costs provided by the project owner).

5. Where a constructor is awarded a contract for construction works within the business category registered under Article 9(1) (including construction works referred to in subparagraphs 1,3 and 4), along with construction works incidental thereto;

6. Where a constructor is awarded a contract for other construction works as those incidental to the construction works performed or being performed under a contract already awarded for construction works within the business category registered under Article 9(1);

7. Other cases prescribed by Decree of the Ministry of Land, Infrastructure and Transport as those where the project owner deems necessary to improve the quality of construction works or the efficiency of execution of construction works, based on such considerations as the degree of technical difficulty, and the correlation between specialized construction works comprising construction works.

(2) Incidental works referred to in paragraphs (1) 5 and 6 mean works appurtenant to main works, and the scope of, and criteria for, such works shall be prescribed by Presidential Decree.

(3) In order to perform general or specialized construction works under a contract awarded under paragraph (1)1,3 or 4, a constructor shall meet the standards for registration of the business category of performing relevant construction works before the contract is concluded (referring to the deadline for registration for participation in bidding, in cases of a contract to be awarded through bidding) and shall continue to comply with the standards during the period of performance; provided, the foregoing shall not apply where a constructor who has filed for two or more business categories of performing specialized construction works is awarded a contract for general construction works consisting of the specialized construction works within the business categories, and a constructor is deemed to meet the standards if the members of the consortium jointly meet the standards for required standards for registration in the case of subparagraph 3. <Amended on Apr. 30, 2019>(4) Detailed matters concerning the procedure, method, etc. of meeting the standards for registration under paragraph (3) shall be prescribed by Decree of the Ministry of Land, Infrastructure and Transport.[This Article Wholly Amended on Dec. 31, 2018][Enforcement date: 2027.1.1][The amended provisions of the proviso of Article 16(1)4 of Act No. 19865 (December 29, 2023) shall be effective until December 31, 2026 under Article 2 of the Addenda of that Act]

Article 17Transfer of construction business

(1) Any constructor shall file a report to the Minister of Land, Infrastructure and Transport as prescribed by Decree of the Ministry of Land, Infrastructure and Transport in any of the following cases: <Amended on Jun. 1, 2012; Mar. 23, 2013; Apr. 30, 2019>1. Where a constructor intends to transfer his or her construction business;

2. Where a corporate constructor intends to consolidate or merge with another corporation; provided, this shall not apply to where a corporate constructor merges a corporation that is not a constructor.

(2) Where a person who intends to file a report on the transfer of construction business under paragraph (1)1 has received a disposition restricting his or her eligibility to participate in tenders as an unjust operator under the Act on Contracts to Which the State Is a Party or the Act on Contracts to Which a Local Government Is a Party, and is under the period of such restriction, he or she shall verify that the transferee has confirmed such fact, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(3) A person who has acquired construction business by transfer and the surviving or resulting corporations following merger or consolidation shall respectively succeed to the status of the transferor of the construction business and of a corporation which ceases to exist due to a merger or consolidation. <Amended on Apr. 18, 2023>(4) Paragraphs (1) and (3) shall apply mutatis mutandis where an heir intends to succeed to the status of a constructor. In such cases, where the heir becomes disqualified as provided in any subparagraph of Article 13(1), he or she shall transfer the construction business to any third party within three months. <Amended on Apr. 18, 2023>(5) Where the report is accepted pursuant to paragraph (4), the registration of construction business of the decedent shall be deemed registration of construction business of his or her heir during the period from the date of death of the decedent until the date the report is accepted. <Added on Apr. 18, 2023>[This Article Wholly Amended on May 24, 2011]

Article 18Public announcements of transfer of construction business

Any person who intends to transfer his or her construction business under Article 17(1)1 shall give a public announcement thereof for at least 30 days, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 19Details of transfer of construction business

(1) Any person who intends to transfer his or her construction business pursuant to Article 17(1)1 shall completely transfer the following rights and obligations concerning the category of business to be transferred:

1. Rights and obligations concerning contract for construction works in progress;

2. Rights and obligations concerning repairs of defects of any completed works under a defects liability period.

(2) Where any construction works is in progress as provided in paragraph (1)1, no construction business shall be transferred unless the project owner of such construction works consents, or the contract therefor is terminated.[This Article Wholly Amended on May 24, 2011]

Article 20Restrictions on transfer of construction business

No constructor shall transfer his or her construction business in any of the following cases; provided, where he or she is obligated to transfer his or her construction business on the ground provided for in the latter part of Article 17(4), he or she may transfer his or her construction business even in any of the following cases: <Amended on Apr. 30, 2019>1. Where he or she is in the period of business suspension under Article 82,82-2, or 83;

2. Where he or she is subject to cancellation of registration of his or her construction business pursuant to Article 82-2 or 83, and is under a period of suspended execution of the disposition under the Administrative Appeals Act or the Administrative Litigation Act.[This Article Wholly Amended on May 24, 2011]

Article 20-2Closure of construction business

(1) Where any person who has filed for registration of the construction business pursuant to Article 9 intends to close his or her construction business, he or she shall submit a report to the Minister of Land, Infrastructure and Transport, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(2) Where a report on the closure of business is submitted under paragraph (1), the Minister of Land, Infrastructure and Transport shall cancel the registration of the relevant construction business, and publicly announce such fact, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 21Prohibition of lending and assisting in lending construction business registration certificates

(1) No constructor shall permit any third person to contract or perform construction works by using his or her name or trade name, or shall lend his or her construction business registration certificate or construction business registration pocketbook to any third person. <Amended on Apr. 30, 2019>(2) No person shall contract or perform construction works by borrowing the name or trade name of a constructor or borrow a construction business registration certificate or construction business registration pocketbook. <Added on Mar. 21, 2017; Apr. 30, 2019>(3) No one shall assist in doing the acts prohibited under paragraph (1) and (2). <Amended on Mar. 21, 2017>(4) No owner of a building shall allow any person to contract or perform construction works in conspiracy with a constructor who has violated paragraph (1) or a person who has violated paragraph (2). <Added on Mar. 21, 2017; Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011][Title Amended on Mar. 21, 2017]

Article 21-2Prohibition of lending national technical qualification certificates

No constructor shall borrow or lend a national technical qualification certificate or career certificate of construction technology from or to any third person. <Amended on Apr. 30, 2019>[This Article Added on Dec. 29, 2009]

Article 22Principles of contracts for construction works

(1) Parties to a contract for construction works (including subcontracts; hereinafter the same shall apply) shall conclude a fair contract by agreement and on an equal footing, and shall conscientiously perform the contract in good faith.

(2) In concluding a contract for construction works, parties to the contract shall clearly stipulate the contract price, period of works and other matters prescribed by Presidential Decree, and shall exchange and keep copies of the contract after affixing thereto signature or name and seal.

(3) In order for the parties to a contract to conclude a fair contract on an equal footing, the Minister of Land, Infrastructure and Transport shall encourage them to prepare and use a standard form of a contract on construction works and the entrustment of construction management (in cases of a subcontract, including a standard form of a subcontract for construction works recommended by the Fair Trade Commission under the Fair Transactions in Subcontracting Act; hereinafter referred to as "standard form of contract"). <Added on Aug. 6, 2013>(4) A constructor shall enter matters regarding construction works in a construction work ledger, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013; Aug. 6, 2013; Apr. 30, 2019>(5) In any of the following cases where the terms of a contract are substantially unfair to either party to the contract, only such part of the contract shall be deemed ineffective: <Added on Aug. 6, 2013; Jun. 9, 2020>1. Where either party to the contract does not approve changes to the contract amount which occur due to design change or changes in economic conditions after the conclusion of the contract without reasonable grounds, or passes the burden on to the other party to the contract;

2. Where either party to the contract does not approve the change of the contract period due to changes in the scope of work after the conclusion of the contract without reasonable grounds, or passes the burden on to the other party to the contract;

3. Where either party to the contract passes responsibility for matters on to the other party to the contract, which cannot be expected as at the time of the conclusion of the contract in light of all the relevant conditions, such as a type of a contract for construction works and the scope of construction works;

4. When the scope of the contract has not been specifically stipulated or a dispute exists between the parties to the contract, where either party to the contract infringes on a legitimate interest of the other party to the contract by determining the scope of the contract at his or her discretion;

5. Where either party to the contract infringes on a legitimate interest of the other party to the contract by determining excessively reduced or increased liability for damages of a party to the contract due to breach of the contract;

6. Where either party to the contract excludes or limits the right of other party to the contract acknowledged by related statutes or regulations, such as the Civil Act, without reasonable grounds.

(6) A constructor shall notify a project owner of items mentioned in the construction work ledger under paragraph (4), as prescribed by Presidential Decree. <Amended on Aug. 6, 2013; Feb. 3, 2016; Apr. 30, 2019>(7) Parties to a contract for construction works shall clearly state the amount the relevant constructor is obligated to pay with respect to such construction works, on the statement of the contract price for the relevant construction works (including the statement of subcontract price calculation; hereafter in this paragraph the same shall apply), as prescribed by Presidential Decree, such as insurance premiums under the Act on the Collection of Insurance Premiums for Employment Insurance and Industrial Accident Compensation Insurance, insurance premiums of the national pension under the National Pension Act, health insurance premiums under the National Health Insurance Act, and long-term care insurance premiums under the Long-Term Care Insurance Act. In such cases, where the amount recorded on the statement of contract price calculation exceeds the insurance premiums actually paid, matters concerning adjustment thereof shall be prescribed by Presidential Decree. <Amended on Aug. 6, 2013; Apr. 30, 2019>(8) Where a constructor requests the project owner to amend terms and conditions of a contract for construction works after two or more constructors including the constructor are awarded the contract by a person other than the State, a local government, or a public institution prescribed by Presidential Decree, he or she shall notify the other constructors of the reason therefor, in writing, by not later than 10 days before the date of request. <Amended on Dec. 31, 2018; Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011]

Article 22-2Guarantee of payment of contract price

(1) When a contractor guarantees the performance of a contract to a project owner where he or she is awarded a contract for construction works by a person other than the State, a local government, or a public institution prescribed by Presidential Decree, the project owner shall also guarantee the payment of the contract price or provide security to the contractor; provided, where it is impracticable to guarantee the payment of the construction price or to provide security, the project owner shall pay the insurance premium or mutual aid fee (hereinafter referred to as "insurance premium, etc.") within 30 days from the date of receiving the guarantee of the performance of the contract so that the contractor can purchase an insurance policy or mutual aid equivalent thereto. <Amended on Nov. 26, 2019>(2) A project owner or contractor need not guarantee the performance of a contract referred to in paragraph (1) or the payment of the cost of a construction project for any construction works prescribed by Presidential Decree, including small-scale construction works. <Added on Nov. 26, 2019>(3) When a project owner fails to provide the guarantee of the payment of the contract price or security or to pay insurance premiums or the like under paragraph (1), the contractor may demand the provision or payment to the project owner by stipulating a reasonable period and suspend the performance of construction works. Where the project owner fails to make provision or payment within the notified period, the contractor may terminate such contract for construction works. <Amended on Nov. 26, 2019>(4) Where a contractor suspends construction works or terminates a contract for construction works pursuant to paragraph (3), the project owner may not claim damages to the contractor on the grounds of the suspension of construction works or the termination of the contract for construction works. <Amended on Nov. 26, 2019>(5) Matters necessary for the means and procedures of guaranteeing the payment of construction prices under paragraph (1) shall be prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Added on Nov. 26, 2019>[This Article Added on Aug. 13, 2013]

Article 22-3Presumption of contract

(1) Where a project owner fails to issue a written contract in concluding a contract for work, which includes the matters referred to in Article 22(2), the contractor may request him or her to confirm the contracted matters by notifying in writing the project owner of the matters prescribed by Presidential Decree, such as the details of the contracted construction works and contract price.

(2) A project owner shall send a written reply to the contractor on whether he or she accepts or denies the contents of the notification within 15 days from the date when he or she receives the notification under paragraph (1); and if no reply is sent within such period, it shall be presumed that there has been a contract with the same content as originally notified by the contractor; provided, the same shall not apply where any natural disaster or any other incident makes it impossible to reply.

(3) The contractor in the case of a notification under paragraph (1), and the project owner in the case of a reply under paragraph (2), shall sign or affix their names and seals, respectively.

(4) Paragraphs (1) through (3) shall apply mutatis mutandis to the presumption of a subcontract. In such cases, "project owner" shall be construed as "contractor," "contractor" as "subcontractor," and "contract" as "subcontract," respectively.

(5) Matters necessary in connection with a notification under paragraph (1) and a reply under paragraph (2) shall be prescribed by Presidential Decree.

(6) Each project owner, contractor, and subcontractor shall keep the written documents referred to in paragraphs (1) and (2) as prescribed by Presidential Decree.[This Article Added on Feb. 3, 2016]

Article 23Appraisal and public announcement of execution capacity

(1) Upon receipt of an application from a constructor, the Minister of Land, Infrastructure and Transport shall appraise and publicly announce the execution capacity of the constructor based on his or her performance records of construction works, capital, and the levels of safety, environment, and quality control of construction works, to ensure that a project owner can select an appropriate constructor. <Amended on May 24, 2011; Mar. 23, 2013; Apr. 30, 2019>(2) Deleted. <Apr. 15, 1999>(3) A constructor who intends to receive appraisal of his or her execution capacity and make such appraisal publicly announced under paragraph (1) shall submit the performance records of construction works for the preceding year, the status of engineers affiliated, financial status, and other matters determined by Decree of the Ministry of Land, Infrastructure and Transport to the Minister of Land, Infrastructure and Transport, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on May 24, 2011; Mar. 23, 2013; Apr. 30, 2019>(4) If necessary for the evaluation of execution capacity under paragraph (1), the Minister of Land, Infrastructure and Transport may request the submission of data, such as records of performance and the status of affiliated engineers, from the relevant constructor who has filed an application for the evaluation of the execution capacity, the project owner, and from the heads of other related institutions and organizations. In such cases, the heads of relevant institutions, organizations, etc. requested to submit data shall comply with such request unless there is a compelling reason not to do so. <Added on Apr. 7, 2020>(5) The methods of conducting appraisal of execution capacity, details of data to be submitted, procedures for giving public announcements, and requests for the submission of data under paragraphs (1), (3), and (4), and other necessary matters shall be prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on May 24, 2011; Mar. 23, 2013; Apr. 7, 2020>[Title Amended on May 24, 2011]

Article 23-2Appraisal and public announcement of construction management capacity

(1) Upon receipt of an application from a construction manager, the Minister of Land, Infrastructure and Transport shall appraise and publicly announce the construction management capacity of the construction manager based on the construction management performance and financial status of the construction manager, to ensure that a project owner can select an appropriate construction manager under Article 26(2). <Amended on Mar. 23, 2013>(2) Any construction manager who intends to undergo appraisal and make such appraisal publicly announced under paragraph (1) shall submit his or her construction management performance for the preceding year, the status of affiliated human resources in construction management, financial status and other matters prescribed by Decree of the Ministry of Land, Infrastructure and Transport, to the Minister of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(3) The method of appraising construction management capacity, details of data to be submitted, and procedures for giving public announcements under paragraphs (1) and (2) and other necessary matters shall be determined by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>[This Article Wholly Amended on May 24, 2011]

Article 24Comprehensive management of construction industry information

(1) The Minister of Land, Infrastructure and Transport may comprehensively manage the information on constructors, such as their capital, management status and the current performance status of construction works, the supply and demand status of materials and human resources necessary for construction works, guarantees referred to in Article 56(1)1, administrative sanctions and other construction-related information, and provide such information to the related institutions, organizations, etc. requiring them. <Amended on Mar. 23, 2013; Apr. 30, 2019; Jun. 9, 2020>(2) The Minister of Land, Infrastructure and Transport may comprehensively manage the information on construction managers, such as capital, management status, and construction management performance, and construction management-related information, such as the actual demand for and supply of human resources necessary for construction management, and provide such information to the related institutions, organizations, etc. requiring them. <Amended on Mar. 23, 2013; Jun. 9, 2020>(3) The Minister of Land, Infrastructure and Transport may establish and operate a knowledge information system of construction industry to systematically manage such construction industry information provided for in paragraphs (1) and (2), as prescribed by Presidential Decree. <Amended on Mar. 23, 2013>(4) The Minister of Land, Infrastructure and Transport may request constructors, construction managers, producers or suppliers of construction materials, related administrative agencies, associations of construction-related business operators, and agencies that render or conduct research on construction-related mutual-aid, insurance, or guarantee services to provide data on the current performance status of construction works, production or sale situations of construction materials, current status of construction human resources, construction management performance, etc. for the comprehensive management of information provided for in paragraphs (1) and (2). In such cases, any person or entity so requested shall comply therewith in the absence of special circumstances. <Amended on Mar. 23, 2013; Apr. 30, 2019>(5) Procedures for requesting a provision of data under paragraph (4) and other necessary matters shall be prescribed by Presidential Decree.[This Article Wholly Amended on May 24, 2011]

Article 25Restrictions on qualification of contractors

(1) A project owner shall award a contract to a constructor registered for the business category corresponding to the details of construction works, based on such considerations as the necessity of comprehensive planning, management, and coordination of the construction works for which the project owner intends to award a contract, construction competency in the specialized area, characteristics of construction technology, and site conditions. <Amended on Dec. 31, 2018; Apr. 30, 2019>(2) A contractor shall award a subcontract to a constructor qualified for performing construction works under Article 16. <Amended on Dec. 31, 2018; Apr. 30, 2019>(3) A project owner or contractor may restrict qualifications of contractors or subcontractors of construction works on the basis of the execution capacity, performance records of construction works, technological capabilities, etc. announced publicly pursuant to Article 23(1) in consideration of the characteristics of construction works.

(4) The head of a State agency or local government entitled to issue dispositions, such as authorization, permission or approval with respect to Class-I structures and Class-II structures under the Special Act on the Safety Control and Maintenance of Establishments may recommend that the relevant project owner replace a builder if he or she deems that the builder’s execution capacity is substantially inappropriate in consideration of such factors as the size of the relevant construction works and the necessity of structural safety. <Amended on Jan. 17, 2017>(5) The Minister of Land, Infrastructure and Transport may impose penalty points on any of the following contractors and shall manage such penalty points, as prescribed by Presidential Decree: <Added on Dec. 18, 2018>1. A person against whom a disposition has been issued under Article 82(2)6, subparagraph 1 of Article 98-2 or subparagraph 6 of Article 99;

2. A person who was punished under Article 109(1) of the Labor Standards Act for a violation of Article 44-2(1) of that Act;

3. A person who has been listed, together with subcontractors, on a public announcement of the number, etc. of industrial accident occurrences under Article 9-2 of the Occupational Safety and Health Act for violations of Article 29(3) of that Act (limited to the places of business referred to in Article 29-3(1)4a through c of that Act);

4. A person who was punished under subparagraph 1 of Article 68 of the Occupational Safety and Health Act for abetting a subcontractor to conceal an industrial accident occurrence or for conspiring the concealment of an industrial accident occurrence with a subcontractor.

(6) When a constructor becomes subject to a disposition issued or a punishment imposed under the subparagraphs of paragraph (5), the head of the administrative agency in charge of the statute or regulation relevant to such disposition or punishment shall notify the Minister of Land, Infrastructure and Transport of the fact. <Added on Dec. 18, 2018; Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011]

Article 26Performance of affairs by construction managers

(1) A project owner may, if necessary, wholly or partially entrust construction management affairs to a person who has expert knowledge and technological capabilities about construction management.

(2) Where the details of construction management affairs performed by a person entrusted with the construction management affairs by the project owner (hereinafter referred to as "construction manager") are affairs requiring a report, registration, etc. under this Act or related statutes or regulations, none of such construction management affairs shall be performed unless the person entrusted therewith has filed a report or for registration under the related statutes or regulations; provided, where a construction manager of airport, expressway, power plant, dam, or plant works which are large scale compound construction works, is equipped with technical human resources, such as architects or professional engineers capable of performing design or supervision affairs under related statutes or regulations, he or she may perform such works being entrusted with design and supervision affairs together, notwithstanding Article 23(1) of the Certified Architects Act or Article 26(1) of the Construction Technology Promotion Act. <Amended on May 22, 2013>(3) A construction manager shall, with the duty of care as a good manager, perform the entrusted affairs for the relevant project owner.

(4) No construction manager shall advise for himself or his or her affiliated company (referring to an affiliated company as defined in subparagraph 12 of Article 2 of the Monopoly Regulation and Fair Trade Act) to receive a contract for the relevant construction works. <Amended on Dec. 29, 2020>(5) If a construction manager inflicts any loss on property of the project owner by intention or negligence in the course of performing construction management affairs, he or she shall compensate for such loss.

(6) Article 44 shall apply mutatis mutandis to compensation for any loss by a construction manager. In such cases, "constructor" shall be construed as "construction manager." <Amended on Apr. 30, 2019>(7) Paragraphs (1) through (6) shall also apply to construction management performed by a construction manager at-risk.

(8) Where a constructor who performs a construction management at-risk concludes a contract with a project owner on construction management in the execution phase, the terms and conditions of the contract shall be limited to the construction works referred to in subparagraph 4 of Article 2. <Amended on Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011]

Article 27Period for estimate

A project owner shall grant a certain period prescribed by Presidential Decree for constructors to make an estimate of the relevant construction works, before a contract for such works is concluded, if it is a free contract, and before inviting a tender, if such contract is concluded through a public tender. <Amended on Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011]

Article 28Defects liability by contractors of construction works

(1) A contractor shall be held liable to a project owner for any defects arising within a period prescribed by Presidential Decree by kind of works for up to the following applicable periods from the date of completion of the construction works or from the date of the commencement of the management and use of the object, whichever is earlier: <Amended on Aug. 11, 2015; Jun. 9, 2020; Jan. 9, 2024>1. Where the object of such construction works is in a brick masonry structure, reinforced concrete structure, steel structure, steel framed reinforced concrete structure or other similar structure that falls under structure load bearing capacity: 10 years;

2. Other than that referred to in subparagraph 1: 5 years.

(2) Notwithstanding paragraph (1), the contractor shall not be liable for defects caused by any of the following reasons; provided, this shall not apply if the contractor knows that the materials or instructions provided by the project owner are inadequate and fails to notify the project owner of such fact: <Amended on Jan. 9, 2024>1. Where the relevant defect arises as the quality, specification, etc. of any material supplied by the project owner fall short of the standards or due to the nature of such material;

2. Where the relevant construction works are executed as instructed by the project owner;

3. Where the project owner uses the object of the relevant construction works in excess of the service life or designed structural load bearing capacity prescribed by related statutes or regulations.

(3) Where a defects liability period for any construction works is expressly provided for in any other statutes or regulations (excluding Articles 670 and 671 of the Civil Act), it shall be governed by the relevant statutes or regulations; provided, where it is separately stipulated in the contract for work based on such considerations as the performance and characteristics of the objects of construction works, as prescribed by Presidential Decree, it shall be governed by such contract for work. <Amended on Aug. 11, 2015>(4) Paragraphs (1) through (3) shall apply mutatis mutandis to defects liability of subcontractors. In such cases, a "contractor" shall be construed as a "subcontractor", a "project owner" as a "project owner or contractor", and "from the date of the completion of construction works or from the date of the commencement of the management and use of the object, whichever is earlier" as "from the date of the completion of construction works executed by the subcontractor, the date of the commencement of the management and use of the object, or the date contractor takes over the object in accordance with Article 37(2), whichever is earlier". <Added on May 14, 2014; Aug. 11, 2015; Dec. 7, 2021; Jan. 9, 2024>[This Article Wholly Amended on May 24, 2011][Title Amended on May 14, 2014]

Article 28-2Direct performance of construction works

(1) Where the amount of a contract awarded to a constructor for construction works is not more than 10 billion won and is less than the amount prescribed by Presidential Decree, the constructor shall directly perform the construction works amounting to at least the labor cost computed by the ratio prescribed by Presidential Decree, out of the total labor cost shown in the statement of calculation of the contract amount for the construction works; provided, he or she need not perform such works direct ly in cases prescribed by Presidential Decree where it is impracticable for him or her to do so. <Amended on Dec. 31, 2018; Apr. 30, 2019>(2) A person who directly performs construction works under paragraph (1) shall notify the project owner of his or her direct performance plan, as prescribed by Presidential Decree; provided, the same shall not apply where a constructor who has obtained registration of a category of business for execution of specialized construction works is awarded a contract for specialized construction works. <Amended on Feb. 3, 2016; Apr. 30, 2019>(3) A project owner may terminate the contract for the relevant construction works if the relevant constructor fails to notify him or her of the plans for direct performance under paragraph (2) or fails to perform such construction works in compliance with the direct performance plan. <Amended on Apr. 30, 2019>(4) The project owner of construction works ordered by the State, a local government, or a public institution prescribed by Presidential Decree in receipt of a direct performance plan under paragraph (2), shall verify whether the constructor has complied with the requirements for direct performance of construction works pursuant to the main clause of paragraph (1) and report or notify the result thereof to the Minister of Land, Infrastructure and Transport; provided, in cases of construction works that require supervision under any related statutes or regulations, the person who conducts the supervision may be allowed to verify the compliance. <Added on Mar. 21, 2017>(5) Methods and procedures for verifying whether the requirements for direct performance of construction works have been complied with pursuant to paragraph (4) and other necessary matters shall be prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Added on Mar. 21, 2017>[This Article Wholly Amended on May 24, 2011]

Article 29Restrictions on subcontract of construction works

(1) No constructor shall subcontract all of the construction works contracted to him or her or most of the major portions prescribed by Presidential Decree of such construction works to any third constructor; provided, the same shall not apply where the constructor plans, manages, and coordinates any construction works contracted to him or her, as prescribed by Presidential Decree, and subcontracts to at least two persons by splitting such construction works, as prescribed by Presidential Decree. <Amended on Apr. 30, 2019>(2) No contractor shall subcontract specialized construction works for which a contract was awarded to him or her; provided, construction works may be partially subcontracted if all the following requirements are met: <Amended on Dec. 31, 2018; Apr. 30, 2019>1. The contractor shall obtain written consent from the project owner;

2. Subcontracting is necessary to improve the quality of construction works or the efficiency of execution; and meets the requirements prescribed by Presidential Decree (limited to cases where a constructor registered for the business category of performing general construction works is awarded a contract for specialized works).

(3) No subcontractor shall subcontract construction works for which he or she was awarded a subcontract to another person; provided, a subcontractor may subcontract construction works in either of the following cases: <Amended on Mar. 23, 2013; Dec. 31, 2018; Apr. 30, 2019>1. Where a constructor registered for the business of performing general construction works has been awarded a subcontract and further subcontracts any construction works constituting specialized construction works, out of the construction works for which he or she has been awarded the subcontract, to another constructor registered for the business of performing the relevant specialized construction works (limited to cases where the project owner gives written consent to such subcontract, as deemed necessary to improve the quality of construction works or the efficiency of execution);

2. Where a constructor registered for the business of performing specialized construction works has been awarded a subcontract, and further subcontracts a portion of any specialized construction works he or she subcontracted to any third constructor registered for the business of performing the relevant specialized construction works, meeting all the following requirements:a. He or she shall meet the requirements prescribed by Decree of the Ministry of Land, Infrastructure and Transport as necessary for improving the quality of the construction works or the efficiency of its execution;b. He or she shall obtain written consent from the contractor.

(4) If the amount of a contract awarded to a constructor for construction works is less than one billion won, the constructor shall not partially subcontract the construction works to another constructor registered for the business category of performing general construction works. <Added on Dec. 31, 2018; Apr. 30, 2019>(5) If a constructor registered for a business category of performing specialized works under Article 16(1)1 through 3 is awarded a contract for general construction works, the constructor shall not subcontract the construction works to another constructor; provided, if the project owner gives written consent to such subcontract, as necessary to improve the quality of construction works or the efficiency of execution, and the requirements prescribed by Presidential Decree are met, the construction works may be partially subcontracted. <Added on Dec. 31, 2018; Apr. 30, 2019>(6) A constructor who has subcontracted a portion of any construction works he or she has contracted (including further subcontract under the proviso of paragraph (3)) and a person who has given consent to further subcontract under paragraph (3)2 shall notify the project owner thereof, as prescribed by Presidential Decree; provided, the same shall not apply to either of the following cases: <Amended on Jun. 1, 2012; Dec. 31, 2018; Apr. 30, 2019>1. Where the project owner gives written consent under the proviso of paragraph (2), paragraph (3)1 or the proviso of paragraph (5);

2. Where the portion to be subcontracted is the major portion of the construction works, for which the project owner makes the contract for work conditioned on a prior approval taking into account the need for quality control.[This Article Wholly Amended on May 24, 2011]

Article 29-2Managing subcontract of construction works

(1) Where a contractor subcontracts any construction works he or she has contracted, he or she shall manage subcontractors so that they comply with Article 29(3).

(2) Where a subcontractor enters into a contract, in violation of Article 29(3), the relevant contractor may request that the subcontractor modify the terms and conditions of such contract or terminate such contract, specifying the ground therefor.

(3) Where a subcontractor fails to comply with a request made under paragraph (2) without good cause, the relevant contractor may terminate the subcontract for the relevant construction works.[This Article Wholly Amended on May 24, 2011]

Article 29-3Restriction on participation in subcontracts for construction works

(1) The Minister of Land, Infrastructure and Transport shall restrict the participation of any of the following constructors in subcontracts for construction works ordered by the State, a local government, or a public institution prescribed by Presidential Decree (hereafter in this Article and Article 87-3 referred to as "public construction works"): The period of restriction on participation in subcontracts in such cases shall be prescribed by Presidential Decree within a maximum of two years: <Amended on Apr. 30, 2019; Jul. 27, 2021>1. A person against whom a disposition under Article 82(2)3 has been issued for a violation of the restriction on subcontracts under Article 29(1) through (3);

2. A person who is subject to administrative fines under Article 26(3)4 of the Act on the Employment Improvement of Construction Workers for a failure to pay a mutual-aid installment under Article 13(1) of that Act, and who is subject to administrative fines twice or more for the same violation committed within two years from the date on which he or she was subject to said administrative fines;

3. A person whose name is disclosed as a business owner in arrears under Article 43-2(1) of the Labor Standards Act;

4. A person whose place of business falls under any of the following, for which the number, etc. of occurrence of industrial accidents have been published under Article 9-2(1) of the Occupational Safety and Health Act:a. A place of business at which the number of persons who died due to an industrial accident defined in subparagraph 1 of Article 2 of the Occupational Safety and Health Act (hereinafter referred to as "dead victims") is at least two persons per year;b. A place of business where a serious accident defined in subparagraph 7 of Article 2 of the Occupational Safety and Health Act occurred and the annual industrial accident rate for the year in which the serious accident occurred is equal to or higher than the average accident rate of the same type of business when classified by size of business;c. A place of business where the death rate per 10,000 people (referring to the number of dead victims converted into the number of dead victims per 10,000 full-time workers per year) is equal to or higher than the average death rate per 10,000 people of the same type of business when classified by size of business;d. A place of business that concealed the occurrence of an industrial accident, in violation of Article 10(1) of the Occupational Safety and Health Act;

5. Where a person against whom limitations had been placed on the employment of foreign workers under Article 20(1)1 of the Employment of Foreign Workers, on the ground that the person employed foreign workers without the employment permission under Article 8(4) of that Act or without the certification of exceptionally permissible employment under Article 12(3) of that Act, became subject to a disposition issued under Article 32(1)8 of the Act;

6. A person who was punished under Article 94 or 95 of the Immigration Act or became subject to a disposition under Article 102(1) of that Act, on the ground that the person employed a person who did not have the status of stay for job-seeking activities, in violation of Article 18(3) of that Act, or on the ground that the person employed an alien who had no permission to change or add the workplace, in violation of Article 21(2) of that Act.

(2) When a constructor becomes subject to a disposition issued under subparagraph of paragraph (1), the head of the administrative agency that issues the disposition shall notify the Minister of Land, Infrastructure and Transport of the fact. <Amended on Apr. 30, 2019>(3) When restricting participation in subcontracts under paragraph (1), the Minister of Land, Infrastructure and Transport shall publish relevant facts immediately through the knowledge information system of construction industry under Article 24(3).

(4) The Minister of Land, Infrastructure and Transport shall give notification (including notification given by using a knowledge information system of construction industry under Article 24(3)) to a constructor against whom restrictions are placed on participation in subcontracts of the details of such restrictions by not later than seven days before such restrictions on participation in subcontracts become effective. <Amended on Apr. 30, 2019>(5) No contractor shall award a subcontract for public construction works to any constructor against whom restrictions on participation in subcontracts are effective, and no constructor shall accept any subcontract during the period in which the constructor is subject to restrictions on participation in subcontracts. <Amended on Apr. 30, 2019>(6) If the project owner of public construction works finds any person who is subject to restrictions on participation in subcontracts, among subcontractors of relevant construction works, the project owner shall request the contractor to replace the subcontractor, and the contractor shall comply with such request for replacement, unless there is good cause.

(7) Notwithstanding paragraph (1), the Minister of Land, Infrastructure and Transport can not restrict participation in subcontracts after the lapse of five years from the time the information under paragraph (2) was provided. <Amended on Jun. 9, 2020>[This Article Added on Dec. 18, 2018]

Article 30

Deleted. <Dec. 31, 2004>

Article 31Inspections of propriety of subcontracts

(1) Where deeming that a subcontractor is deemed substantially inappropriate for performing construction works, or the subcontract price does not exceed the price computed in the ratio prescribed by Presidential Decree, a project owner may inspect the execution capacity of the subcontractor, and the propriety of the terms and conditions of the relevant subcontract, etc.

(2) Where deeming that a subcontractor is deemed substantially inappropriate for performing construction works, or the subcontract price falls short of the price computed in the ratio prescribed by Presidential Decree, the State, a local government, or a public institution prescribed by Presidential Decree, as a project owner, shall inspect the execution capacity of the subcontractor, and the propriety of the terms and conditions of the relevant subcontract, etc.

(3) Where an inspection conducted under paragraph (1) or (2) reveals that the execution capacity of a subcontractor or the terms and condition of a subcontract are inappropriate, a project owner may request the relevant contractor to change the subcontractor or to modify the terms and conditions of the subcontract, specifying the ground therefor. In such cases, where an inspection is conducted under paragraph (2), the relevant project owner shall request the contractor to replace the subcontractor or amend the terms and conditions of the subcontract, and the contractor shall comply with such request, unless there is good cause. <Amended on Dec. 26, 2017>(4) Where a contractor’s failure to comply with a request made under paragraph (3) without good cause is likely to seriously affect the result of works, the relevant project owner may terminate the contract for the relevant construction works.

(5) The project owner referred to in paragraph (2) shall establish a subcontract inspection committee to inspect the execution capacity of subcontractors, the propriety of the terms and conditions of subcontracts, etc.

(6) The criteria for inspection of the propriety of subcontracts, procedures for requesting the replacement of subcontractors or the amendment of terms and conditions of subcontracts under paragraphs (1) through (3) and for complying with such request and other necessary matters and matters necessary for the establishment and composition of subcontract inspection committees under paragraph (5), the methods of conducting inspections, etc. shall be prescribed by Presidential Decree. <Amended on Dec. 26, 2017>[This Article Wholly Amended on May 24, 2011]

Article 31-2Submission of subcontract plans

(1) Where a constructor intends to be awarded a contract for any construction works prescribed by Presidential Decree and ordered by the State, a local government, or a public institution prescribed Presidential Decree, he or she shall submit to the project owner a subcontract plan that includes the main types and volume of the construction works to be subcontracted and the method of selecting subcontractors, as prescribed by Presidential Decree in order to ensure the fairness of subcontracting and efficient performance of the construction works. In such cases, the project owner shall examine whether the subcontract plan submitted is appropriate and supervise whether the construction works are performed in accordance with the subcontract plan. <Amended on Feb. 3, 2016; Apr. 30, 2019>(2) Where the project owner requests a constructor to submit a subcontract plan for any construction works to which paragraph (1) is not applied by deeming that it is necessary to ensure the fairness of subcontracting and the efficiency of the construction works, the constructor shall comply with such request. <Amended on Apr. 30, 2019>[This Article Wholly Amended on May 24, 2011]

Article 31-3Disclosure of contract documents for subcontracted works

(1) Where a person has subcontracted construction works ordered by the State, a local government, or a public institution prescribed by Presidential Decree, the relevant project owner shall disclose the following matters in a way that any person can see, as prescribed by Presidential Decree: <Amended on Dec. 31, 2018>1. Name of construction works;

2. Contract price of a contractor and bid price rate;

3. Contractor (trade name, representative and the seat of its place of business);

4. Subcontractor (trade name, representative, type of business and the seat of its place of business);

5. Type of construction subcontracted;

6. Contract price on the part of a subcontract, subcontract price and subcontract rate.

(2) A contractor shall notify the constructor to whom the contractor intends to award a subcontract, for part of the construction works for which the contractor was awarded under a contract, of the following matters relating to the subcontracted construction works, by the method prescribed by Decree of the Ministry of Land, Infrastructure and Transport, before the subcontract is concluded in cases of a negotiated subcontract, or before bids are invited for the subcontract in cases of a competitive subcontract; provided, the design drawings referred to in subparagraph 2 shall be provided only where the project owner has provided them: <Added on Dec. 31, 2018; Apr. 30, 2019>1. Where the contract has been awarded by the State, a local government, or a public institution prescribed by Presidential Decree: Design drawings, the bill of quantities, the price estimated by the project owner (if no estimated price is available, the basic amount) and the construction period for the subcontracted works;

2. Where the contract has been awarded by a person other than those referred to in subparagraph 1: Design drawings, the bill of quantities and the construction period for the subcontracted works.

(3) The project owner referred to in paragraph (2)1 shall ensure that a contractor fulfills his or her obligation to provide documents for subcontracted works under that paragraph. <Added on Dec. 31, 2018>[This Article Added on May 14, 2014][Title Amended on Dec. 31, 2018]

Article 32Status of subcontractors

(1) Each subcontractor shall have the same obligation to the project owner as that of a contractor with respect to any construction works he or she has subcontracted.

(2) Paragraph (1) shall not affect the legal relations between a contractor and a subcontractor.

(3) If a contractor neglects to give the notice under Article 29(6) or omits some information in giving such notice, the relevant subcontractor may directly notify the project owner or the contractor of the type of works performed by him or her, the construction period, etc. <Amended on Dec. 31, 2018>(4) Articles 34(1) and (8) and 35 (excluding Article 35(2)6 to a construction machinery lessor; and Article 35(2)5 and 6 to a person who manufactures and supplies components as well as to a lessor of temporary equipment and materials) shall apply mutatis mutandis to the payment of prices to a construction machinery lessor, a person who manufactures and supplies components for construction works (hereinafter referred to as "person manufacturing and supplying components"), and a person who leases out equipment and materials temporarily installed or used for construction works (hereinafter referred to as "lessor of temporary equipment and materials"), as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. In such cases, "project owner" shall be construed as "project owner or contractor," "contractor" as "contractor or subcontractor," "subcontractor" as "construction machinery lessor, a person manufacturing and supplying components, or a lessor of temporary equipment and materials" and "subcontract prices" as "the rental for construction machinery, prices for components for construction works, or the rental for temporary equipment and materials", respectively; provided, in any case described in Article 35(2),(3),(5), and (6), "project owner" shall be deemed "person who has awarded a contract for construction works to the constructor entering into a contract with a construction machinery lessor, a person manufacturing and supplying components, or a lessor of temporary equipment and materials"; "contractor" shall be construed as "constructor entering into a contract with a construction machinery lessor, a person manufacturing and supplying components, or a lessor of temporary equipment and materials"; "subcontractor" as "construction machinery lessor; a person manufacturing and supplying components, or a lessor of temporary equipment and materials"; and "subcontract prices" as "the rental for construction machinery, prices for components for construction works, or the rental for temporary equipment and materials," respectively. <Amended on Mar. 23, 2013; May 14, 2014; Dec. 18, 2018; Apr. 30, 2019; Apr. 7, 2020>[This Article Wholly Amended on May 24, 2011]

Article 33Hearing the opinions of subcontractors

Where a contractor has subcontractors in performing any construction works he or she has contracted, he or she shall hear opinions from such subcontractors in advance about the construction methods and process of the performance of the construction works and other matters deemed necessary.[This Article Wholly Amended on May 24, 2011]

Article 34Payment of subcontract prices

(1) Where a contractor receives completion money or progress payment for any construction works he or she has contracted, he or she shall make payment to a subcontractor in cash within 15 days from the date when he or she receives the completion money or progress payment (referring to the due date of draft where the contractor receives the value of works by draft from the project owner), respectively, in accordance with the following classifications:

1. Where he or she receives completion money: Subcontract price;

2. Where he or she receives a progress payment: Amount equivalent to the portion executed by the subcontractor.

(2) In concluding a contract for work, a contractor shall issue a guarantee for the payment of an appropriate subcontract price to the relevant subcontractor, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport; provided, the contractor need not issue such guarantee in cases determined by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013>(3) Parties to a contract for construction works shall clarify the amount incurred in issuing a payment guarantee of the subcontract price under paragraph (2) on the statement of the contract price calculation of the relevant construction works, as prescribed by Presidential Decree.

(4) Where a contractor receives an advance payment from a project owner, the contractor shall pay an advance payment to his or her subcontractors according to the details and proportion of the advance payment he or she receives within 15 days from the date of receipt (referring to the date a subcontract is concluded where the contractor receives the advance payment before signing the subcontract) to ensure that the subcontractors can start subcontracted works, such as purchasing or leasing materials, renting construction machine, or hiring construction workers. In such cases, the contractor may request a subcontractor to provide a guarantee in preparation for a case that the subcontractor may return the advance payment. <Amended on Jun. 1, 2012; Jul. 27, 2021>(5) A mutual aid association established under Article 54 or any agency authorized to perform guarantee affairs under other statutes or regulations shall issue a guarantee agreement (including the issuance of a modified guarantee) referred to in paragraph (2) that certifies the payment of the subcontract price to a contractor, or terminates a guarantee agreement, it shall promptly notify a project owner and a contractor of details thereof, as prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Amended on Mar. 23, 2013; May 14, 2014>(6) A project owner shall confirm the terms and conditions of the payment guarantee of the subcontract price notified under paragraph (5), and where such confirmation finds that any of the terms and conditions are inappropriate, the project owner may request the contractor to correct them.

(7) Where a project owner is the State, a local government, or a public institution prescribed by Presidential Decree, he or she shall confirm whether such contractor has issued a guarantee under paragraph (2) to the subcontractor, so as to protect the subcontract price. <Added on Feb. 3, 2016>(8) If a contractor pays the completion money, progress payment or advance payment that he or she received from the project owner, after the due date specified in paragraph (1) or (4), he or she shall pay interest thereon at the interest rate determined and publicly notified by the Fair Trade Commission under Article 13(8) of the Fair Transactions in Subcontracting Act for the overdue period within a maximum of 25/100 per annum. <Added on Dec. 18, 2018>(9) A contractor for construction works (excluding the construction works determined by Decree of the Ministry of Land, Infrastructure and Transport, such as construction works in a small scale) awarded by the State, a local government, or a public institution prescribed by Presidential Decree and his or her subcontractors shall invoice and receive construction prices (including advance payment, progress payment, completion money, and prepayment (referring to the amount that the contractor or subcontractor pays in advance for materials, equipment, subcontract prices, etc. before the project owner or contractor pays the progress payment or completion money to the contractor or subcontractor); hereafter in this paragraph the same shall apply) by using the system referred to in Article 9-2(1) of the Electronic Procurement Utilization and Promotion Act and shall not use the prices payable to subcontractors, construction workers, construction machinery lessors, lessors of temporary equipment and materials, the persons who manufacture and supply parts for construction works, etc., out of the received construction prices. In such cases, matters necessary for methods, standards, procedures, etc. for requesting and paying for construction prices shall be prescribed by Decree of the Ministry of Land, Infrastructure and Transport. <Added on Dec. 18, 2018; Jul. 27, 2021>[This Article Wholly Amended on May 24, 2011]