Our Law Firm Hwaum, led by Managing Attorney Jae-kwon Jung, represented the plaintiff in a lawsuit seeking payment for goods under an electronic components supply agreement and obtained a complete victory on November 1, 2022.
In this case, the parties initially supplied goods under individual contracts formed pursuant to purchase orders issued under a framework agreement. Subsequently, by mutual agreement, the parties began supplying goods through a system involving so-called Blanket Orders (B.O.) and Purchase Orders (P.O.). The defendant, however, failed to purchase the remaining quantities covered by the B.O. and unilaterally terminated the agreement. The plaintiff therefore filed a lawsuit seeking payment for the remaining goods covered by the B.O.
The defendant argued that the B.O. merely provided advance notice of the anticipated purchase quantity for the purpose of facilitating the smooth supply of goods and did not constitute a purchase order under the framework agreement. The defendant further argued that a supply contract could only be deemed concluded upon issuance of a P.O., which constituted the purchase order contemplated by the framework agreement, and therefore the plaintiff's claim had no merit.
Our firm argued that, regardless of whether the B.O. constituted a purchase order under the framework agreement, a supply contract had been concluded because the plaintiff made an offer to supply the goods by issuing the P.O. and the defendant accepted that offer.
The court accepted all of the plaintiff's arguments and held that a supply contract had been concluded because the parties had reached a mutual agreement on the essential terms of the contract through the issuance and acceptance of the B.O.
Author: Attorney Jae-kwon Jung