Case Studies
Checklist of Legal Items to Check When Drafting Contracts for Foreign Freelancers
Law firm Veat reviewed the service contract issues to be concluded with American freelancers upon the request of an artificial intelligence software development company (hereinafter referred to as "customer"). The customer intended to conclude a service contract in the form of a freelancer with an American technical expert, and Law firm Veat advised in detail on the legal requirements to conclude a service contract with a foreigner, and points to be careful so that the contract would not be interpreted as an employment contract. Points for Setting Contract Structure when Utilizing Overseas Personnel Employment Contract If a service contract is deemed a de facto employment contract, the Labor Standards Act may apply, and the employer’s legal obligations such as four major insurances may arise. Therefore, the contract should carefully note elements related to performance, such as work instructions and supervision, place and time of work, and the authority to terminate the contract, and clearly state the method of performing independent work from the purpose of the contract. Tax Treaty Also, when paying service fees to an American freelancer, it is necessary to consider the taxability according to tax law. Especially in cases like this, where the service provider is a U.S. national, an exception may apply where the human service is performed entirely within the U.S., allowing for non-withholding of taxes under the Korea-U.S. tax treaty. Therefore, Law firm Veat designed the contract structure to minimize tax legal risks, focusing on whether the freelancer’s place of work is actually in the U.S., and whether it can be clearly stated and substantiated on the contract. Furthermore, to avoid suspicion of tax avoidance purposes, we supported the preparation of transparent contract clauses and a verifiable data system for the scope of work and method of performance. Intellectual Property Protection Clause Given the customer’s business characteristics, source code, algorithms, and learning data that the freelancer accesses or creates are all unique technological assets that require legal protection. Law firm Veat recommended including a clause clearly defining the assignment of intellectual property rights and the right to use the results in the freelancer contract, and a provision restricting secondary works and commercial reuse. In addition, in order to prevent leakage of technology and business information, we included a strong Non-Disclosure Agreement (NDA) clause and established a practical system for protecting rights by clearly defining jurisdiction and governing law in preparation for potential disputes. In particular, we helped to prepare the jurisdiction clause and dispute resolution method when collaborating with overseas personnel. Consulting Strategy of IT-Specialized Law firm Veat for Technology Company’s Global Contracts With the growth of technology-centric companies such as AI, SaaS, and blockchain, collaboration with overseas specialists has become more active. However, if you start work only with standard form contracts or email confirmations without prior review by legal professionals, you may face various legal issues such as unexpected tax risks, right disputes, and information leakage. Law firm Veat, based on our integrated consulting capabilities encompassing IT, intellectual property, tax treaties, and labor & employment contract fields, is providing integrated advice on service contract design, intellectual property and NDA system construction, and review of tax treaties suitable for technology companies' global collaboration structure. In particular, we support the systematic inclusion of provisions such as contract structure design, adjustment of intellectual property rights for AI software development results, NDA for protection of confidential information, provisions to prevent technology leakage, and provisions for jurisdiction and governing law to prepare for international disputes. If you need a review of English service contracts or advice on contract structure for utilizing overseas personnel, please feel free to contact Law firm Veat. This case study can also be found on the Law firm Veat blog below. - Legal Checklist to Confirm When Drafting a Freelancer Contract with Foreigners Thank you. Law firm Veat
[IT Litigation] Key Points of Software Service Contracts, How Far Does ‘Completion’ Go?
Digital transformation is accelerating, and companies are entering into various software service contracts for self-system development, app construction, and the introduction of automation tools. However, as these technology-based contracts increase, so does the reality of legal disputes between the parties involved. The core of disputes in software service contracts is whether “the service has been fully performed and the task is completed”. That is, it occurs when there is a difference in opinion between the developer (or contractor) who claims that software development and construction has been completed, and the client (or principal) who sees it as still incomplete. The key element determining whether a dispute is resolved is the ‘acceptance criteria’. Even if the scope of work is specified in detail in the contract, the absence of clear criteria for determining whether the work has been completed can only lead to difficulty in preventing disputes in advance or resolving them afterward. In particular, when the result is software, like an intangible result, it is difficult to physically confirm the performance, and the concept of ‘completion’ itself can become unclear, making the setting of acceptance criteria even more important. Acceptance criteria should be set from the beginning of a software service contract. When entering into a software service contract, many companies or startups focus on functional requirements or development schedules, but often neglect the important ‘completion’ criteria, that is, the acceptance procedure and judgment criteria. However, in reality, legal disputes most frequently arise from the absence or ambiguity of acceptance criteria. Before a contract is concluded, the client and the contractor must specifically agree on what state they will consider ‘completion’ and include that content in the contract. For example, the following items should be clearly defined. If acceptance items that objectify the completion criteria are not specified in the contract, the client may reserve acceptance and delay payment of the final payment, and the contractor may claim that it is a breach of contract or unjust non-payment of the final payment, leading to conflict. In reality, there are many cases where such matters proceed to litigation. Ultimately, the concept of ‘completion’ should not be interpreted by either party based on verbal agreements or conventions, but should be specifically defined in the contract as the most effective measure to prevent disputes. Even to prevent unnecessary differences in interpretation surrounding whether a project has been terminated, acceptance criteria must be a mandatory item to be set from the draft contract stage. Software service contract acceptance criteria components Acceptance procedure and deadline Specific details should be defined, such as the start date of acceptance, the acceptance criteria, and the deadlines. Law firm Veit has experience collaborating with numerous software developers and IT startups and providing legal advice on IT projects, startup platform development contracts, and public agency system construction service contracts. Providing professional legal advice based on the experience. To make the contract not just a ‘signed document’ but as a shield to protect our technology assets, legal advice is essential. When you need legal advice or review of software contracts, please feel free to contact law firm Veit. Thank you. Law firm Veit
How to respond to commercial advertisements, what should we do?
Law firm Veat received a request from Company A (hereinafter referred to as “the client”) and reported the client, who violated the “Act on Promotion of Information and Communication Network Utilization and Information Protection, etc.” (hereinafter referred to as “the Information and Communication Network Act”) and the “Act on Fair Labeling and Advertising” (hereinafter referred to as “the Fair Labeling and Advertising Act”), to the Korea Internet & Security Agency (hereinafter referred to as “KISA”) and the Fair Trade Commission. Marketing in the digital environment has become an essential element of business activities. Advertising through email, text messages, and SNS has become an effective means of expanding touchpoints with customers, but it is also an area where failure to meet legal requirements can lead to significant risks. Recently, there has been an increase in cases of reporting violations of the Information and Communication Network Act and the Fair Labeling and Advertising Act, and regulatory agencies are responding with strict standards. What is advertising information for profit? Advertising information for profit means information sent with the purpose of profit to introduce products or services or to induce purchases. Introducing new product features, user reviews, or success stories, company awards, certifications, linking to your own website or shopping mall, and other promotional information can all be considered advertising information. Even though it may appear to be “informative content” on the surface, if the purpose is to seek profit, it will be classified as “advertising information” under the law. Advertising information must obtain ‘prior consent’.
[Law firm Veat] Practical warning for Korean companies examining global personal information leakage cases ‘Piping Rock case’
Law firm Veat published a column illuminating data protection in the digital healthcare industry and corporate legal responsibility through the ‘Piping Rock case’ of global personal information breaches. This column focuses on the large-scale hacking incident experienced by U.S. dietary supplement e-commerce company Piping Rock, exploring data security vulnerabilities in the digital age and the resulting collapse of corporate trust. The leakage of sensitive health data, such as customer names, contact information, addresses, and dietary supplement purchase history, by hackers completely shattered consumer trust and starkly revealed the limitations of the fragmented U.S. personal information protection regulations. Through this case, it warns Korean companies about the practical risks they may face and examines the importance of practical response strategies, such as voluntary GDPR-level protection measures, security infrastructure strengthening, transparent accident response, and the establishment of legal & security expert collaboration systems. It emphasizes the need for comprehensive responses that consider both technology and regulation, especially as the Korean dietary supplement industry is growing rapidly and health data is both an asset and a risk. [This link] provides access to the detailed content of this column. Law firm Veat provides in-depth legal advice at the intersection of law and technology to address data protection and personal information leakage risks arising in technology-based industries such as digital healthcare, customized dietary supplements, and platform businesses. It specifically analyzes domestic and international personal information protection laws such as GDPR, CCPA, and PIPA, and provides practical response strategies for external platform utilization, AI, and big data-based services. Beyond simple legal interpretation, Law firm Veat safeguards the trust and competitiveness of its clients by providing comprehensive advice, including the preparation of customized internal regulations, consent forms, and privacy policies, and the establishment of response systems in the event of a data leak. Juhyeong Lee, Food Regulation Consulting Team Leader at Law firm Veat, a food law doctor and a concurrent professor at the Chung-Ang University Food Safety Regulatory Science Department, is a global food regulation expert holding U.S. FSVP and PCHF-PCQI/FSPCA qualifications. He provides strategic advice based on extensive practical experience in areas such as personal information protection, export regulations, and legal advice on AI-based healthcare technologies for domestic and international food companies. In an era where data is linked to corporate trust, companies in need of legal risk management related to personal information in AI and digital healthcare are welcome to contact Law firm Veat at any time. Thank you. From Law firm Veat
Veat Academy 'Virtual Asset Industry Trends and Major Regulatory Status'
Reading the Flow of Change in the Virtual Asset Industry and Regulation The virtual asset industry has been one of the fastest-growing industries over the past 10 years. From the initial stage represented by Bitcoin, it now extends to NFTs, DeFi (DeFi), STO (Securities Token), and metaverse assets, constantly expanding its scope and form. Consequently, the need for surrounding legal regulations has continuously been raised. Technology always advances faster than the law, but the law and institutions must function as a framework to connect the industry and society stably, even if belatedly. Law firm Veat, as a law firm presenting practical solutions at the intersection of technology industry and regulation, operates a ‘VEAT Academy’ where members regularly learn and discuss together.
[Reviewing GP-LP Agreement Structures When Investing in PEF] 6 Things Practitioners Must Not Miss
Law firm Veat received a request from a KOSDAQ-listed company (hereinafter “client”), and reviewed investment contracts and related documents in the process of the client participating as an LP (Limited Partner, general partner) in a U.S. private equity fund (Private Equity Fund, hereinafter ‘PEF’), analyzed key points of consideration from the LP’s perspective, and provided advice. Private equity funds are an alternative investment method that seeks profits primarily through investments in unlisted companies and are actively utilized among various companies and investors domestically and internationally. In particular, the structure of participating as an LP in a fund established by a GP (General Partner, investment management company) is also gaining popularity as a strategic investment tool for institutional investors and listed companies. However, private equity funds fundamentally differ from typical financial products in their structure and operation. Investors have only limited authority within the structure led by the GP, so it is very important to accurately understand and judge the substantive content contained in the contract and investment documents.
Will startup investment clauses have effect?_Attorney An Il-un Outstanding Interview ('Delisting' startup lawsuit case)
Recently, a lawsuit involving IPO non-performance has garnered attention in the venture investment industry. Law firm Veat’s An Il-woon Partner Attorney explained the court’s rulings on the case, the perspectives of VCs and startups regarding investment contracts, and the IPO obligation clause viewed by larger investors such as PEFs. [What if You Can’t IPO? The Court’s Ruling Was Different.] “If it’s stipulated in the contract, that clause is valid, but in cases where results like IPOs are difficult to guarantee, the court bases its judgment on the company's efforts.” “It is difficult to be held responsible simply because the result doesn’s exist.” An Il-woon Partner Attorney_ Outstanding ‘Are Startup Investment Clauses Effective?’ Interview Excerpt HB Investments filed a lawsuit for damages because Cockbee failed to fulfill the “Failure to IPO within 6 years will result in compensation of investment plus 20% compound interest” clause in its investment contract and because Cockbee failed to comply with it. However, the district court interpreted the clause not as a ‘result obligation’ but as a ‘means obligation.’ That is, Cockbee didn’t have an obligation to necessarily succeed in an IPO, but only an obligation to make diligent efforts to achieve an IPO. The court ruled that there was no evidence that Cockbee intentionally avoided an IPO or did not make efforts, and that the failure to IPO was due to external factors such as market stagnation. [VCs and Startups: Different Perspectives on Contract Interpretation] “As GPs (trustees), VCs have an obligation to recover investment from LPs (trustees), so they must take legal action or exercise due diligence if recovery is difficult.” An Il-woon Partner Attorney_ Outstanding ‘Are Startup Investment Clauses Effective?’ Interview Excerpt This case is a typical example that shows the difference in perspective on contract interpretation between startups and venture capital (VC). While VCs expect an IPO within a certain period of time, there is a reality in which startups cannot definitively guarantee the success of an IPO. If the IPO clause is interpreted as a means obligation, it restricts the VC’s investment recovery, and conversely, if it is interpreted as a result obligation, it can impose excessive burden on the startup.
Law firm Veat, Ju-hyeong, Head of Food Regulatory Consulting Team, presents food enterprise response strategies in response to changes in U.S. tariff policies.
Law firm Veat’s Ju-hyeong, Global Food Industry Specialist, contributed a column on the theme of “Changes in US Tariff Policies and Korean Food Companies' Response Strategies” to the Food & Beverage News. The following is a summary of the column. Please refer to the link at the bottom if you are interested in the full article. The recent news that the US government is withdrawing the 0% tariff benefits maintained after the Korea-US FTA for some food items and planning to increase tariffs by up to 25-26% is a significant warning for Korean food companies. In particular, for price-sensitive items, it will be difficult to raise consumer prices, so tariff increases can directly lead to a deterioration of corporate profitability. To survive in the US market, simply securing price competitiveness is not enough. Products that align with local consumer trends and structural responses are needed. Among the most direct and fundamental solutions, ‘Relocating Production Bases to the US’ was presented. This is because it can fundamentally resolve tariff burdens and enable localized product development and distribution optimization. The benefits of local production include restoring price competitiveness, planning new products based on local consumer reactions, reducing logistics costs, utilizing government support benefits, and strengthening the ‘Made in USA’ brand image. However, at the same time, there are several challenges such as initial investment costs, labor management, and regulatory understanding. In particular, small and medium-sized enterprises need to approach strategically through external professional consulting or local partnerships. Ju-hyeong, Food Regulatory Consulting Team Leader of Law firm Veat is an expert in food safety and regulatory affairs, having served as a visiting professor at Chung-Ang University and Director of the Food Safety Information Agency, and holds US FSVP & PCQI qualifications. He has expertise in domestic and international food regulatory response and export strategy consultation. Law firm Veat is a law firm that provides specialized legal services in various fields including the food industry, possessing practical consulting capabilities such as domestic and international food regulatory response, export/import related contract review, and global certification and labeling requirements consultation. We support the sustainable growth of food companies through customized consultation that minimizes corporate risk in a changing international regulatory environment and provides legal support for market entry strategies. [Ju-hyeong’s Global Food Trends] Survival Solutions for Korean Food Companies Facing US Tariff Barriers Thank you. Sincerely, Law firm Veat
[IT Litigation] What is Software Appraisal? Differences between Completion Appraisal vs. Existing Software Appraisal and Selection Strategies
It is very common for startups or IT companies to outsource software development. However, it is also common to see conflicts between the client and the developer regarding the payment of service fees when the results do not meet expectations at the time of completion, or when the results do not meet expectations. In particular, whether ‘development has been completed’ is a direct criterion for judging whether the service contract has been fulfilled, so disagreements between the parties regarding the quality of development can lead to legal disputes. When there is a dispute between the parties to a contract regarding the quality of development, the most ideal solution is to resolve it through consultation between the parties, but in reality, consultation often does not proceed smoothly, and eventually a third party, such as a court or arbitration institution, must make a judgment. The procedure that serves as an important basis for judging the quality of development is called ‘software assessment.’ - What is software assessment? Software assessment is a procedure for objectively evaluating whether the software developed under a service contract has been completed in accordance with the contractual requirements from a technical perspective. The results of the assessment in software service contract disputes are not just reference materials but act as a key criterion for determining whether payment is due and the amount of the payment. In particular, because it is often difficult to externally confirm the completion or development progress of intangible assets such as software, it is very important to verify the actual status through an assessment. - Definition and judging criteria for quality assessment vs. completed work assessment Software assessment can be broadly divided into the following two methods. 1. Quality Assessment This is an assessment to determine whether the software that has been developed meets the contractual requirements. It is evaluated based on comprehensive factors such as function implementation, UI/UX, performance, and stability. It often assumes that the software has been completed, so it is usually performed when the developer claims to have completed the work. 2. Completed Work Assessment This method evaluates how much work has been done so far while the software is still incomplete. It calculates the progress rate (completed work rate) based on deliverables and the amount of development resources invested. It is used for partial settlement when a project is terminated prematurely or delayed. - How to choose the appropriate assessment method based on the situation: quality assessment VS completed work assessment
[202504] Monthly Veat April Issue_ Service Launch Pre-Checklist! Member Sign-Up Design, Is This Okay?
Okay, I have translated the text from the provided URL (https://stib.ee/CKJH) according to your instructions. Here's the translated output, maintaining HTML tags and translating only the Korean text, using "Veat" for "비트" and "Law firm Veat" for "법무법인 비트": ```html 당사는 고객의 성공적인 비즈니스를 위한 최적의 법률 솔루션을 제공하는 데 전념하고 있습니다. Law firm Veat은 혁신적인 아이디어와 끊임없는 도전 정신으로 고객의 성공을 돕고 있습니다. 저희는 고객의 요구 사항을 정확히 파악하고, 이에 부합하는 맞춤형 법률 서비스를 제공하여 고객의 비즈니스 성장을 지원합니다. Law firm Veat은 다양한 분야의 전문 변호사들이 모여 고객에게 최상의 서비스를 제공하기 위해 노력하고 있습니다. 저희 Law firm Veat는 다음과 같은 주요 서비스를 제공합니다. 기업 법률 자문: 기업 설립, 계약 검토, 인수 합병, 지분 투자 등 기업 운영 전반에 대한 법률 자문 지적 재산권 보호: 특허, 상표, 디자인 등 지적 재산권 출원 및 분쟁 해결 소송 대리: 민사, 형사, 행정 소송 등 각종 소송 대리 부동산 법률 자문: 부동산 매매, 임대차, 개발 등 부동산 관련 법률 자문 개인 법률 자문: 상속, 증여, 이혼, 재산 분할 등 개인적인 법률 문제에 대한 자문 Law firm Veat는 고객의 성공적인 비즈니스를 위한 든든한 파트너가 되겠습니다. 저희는 고객과의 신뢰를 최우선으로 생각하며, 고객의 성공을 위해 끊임없이 노력하겠습니다. 저희에게 문의하여 성공적인 비즈니스를 위한 최적의 법률 솔루션을 찾아보세요. 비트는 고객의 성공을 위한 최고의 법률 전문가 그룹입니다. 저희의 핵심 가치는 다음과 같습니다. 고객 중심: 고객의 요구를 최우선으로 생각합니다. 전문성: 최고의 전문가들이 고객에게 최상의 서비스를 제공합니다. 신뢰: 고객과의 신뢰를 최우선으로 생각합니다. 혁신: 끊임없이 새로운 아이디어를 추구하고 혁신적인 서비스를 제공합니다. 비트는 고객의 성공을 위해 끊임없이 노력하겠습니다. ```