The first comprehensive revision of South Korea’s Civil Act, which had remained largely unchanged since its enactment in 1958, has begun with amendments to contract law provisions. The Ministry of Justice approved the revision at a cabinet meeting on the 16th as the first step toward modernizing the Civil Act.
The revised law allows the statutory interest rate, previously fixed at 5% for civil cases and 6% for commercial cases annually, to be adjusted via presidential decree based on economic conditions such as interest rates and inflation. This change addresses the long-standing limitation of a fixed rate that does not reflect real-world fluctuations.
The revision also introduces a provision enabling the cancellation of declarations of intent made under ‘gaslighting’ conditions. Previously, it was difficult to cancel such declarations under psychological coercion or undue interference, but the new rule strengthens legal protection for individual decision-making autonomy.
Regulations related to breach of contract and compensation for damages have also been revised. The types of defects in sales contracts have been simplified and systematized to make it easier for citizens to exercise their rights. The Ministry of Justice plans to continue comprehensive revisions of the Civil Act, starting with this contract law reform.