Korean statutory and case law have sought to address the imbalance of information and bargaining power between insurers and policyholders by controlling the incorporation of contractual terms through the “duty to explain” as prescribed by the Act on Regulation of Terms and Conditions. This legal doctrine has also been applied to marine insurance contracts, which are typically concluded between commercial entities using standardized Institute Clauses governed by English law. In accordance with such jurisprudence, the Korean Supreme Court has ruled that an insurer’s failure to explain waranty clauses under English marine insurance law results in the exclusion of those terms from the contract (Supreme Court Decisions 99Da55533 and 2009Da105383). While academic discussion on these cases has primarily focused on analyzing the governing law issue, this study focuses on examining the distinct characteristics of marine insurance and comparative legal analysis regarding the incorporation of terms between key jurisdictions as well as the regulation of business-to-business (B2B) transaction terms and presents the following findings. First, marine insurance possesses a strong international and commercial characteristic, which is reflected in related legal frameworks. Second, comparative analysis indicates that Korean law's approach — imposing a comprehensive duty to explain all essential terms in insurance contracts regardless of whether the policyholder is a consumer or a business entity — is uncommon, thereby weakening the rationale for imposing such regulatory control on B2B Insurance contracts. Finally, the European Union’s (EU) regulatory trends reveal a two-tiered approach that reflects the differing characteristics of business-to-consumer (B2C) and B2B transactions: while consumer protection measures impose strict regulatory standards on B2C contracts, B2B contracts are regulated in a more decentralized manner, often through competition law, transparency requirements, or sector-specific rules tailored to each industry's needs. These observations offer significant implications for the development of regulatory policies on contract terms in Korea. These findings suggest that the Korean courts’ uniform application of the duty to explain in marine insurance cases might be overlooking the commercial nature of such contracts. This study also provides broader insights for the regulation of standardized contract terms in Korea. From a legislative standpoint, there is a need to strengthen consumer protection in B2C transactions while preserving contractual autonomy in B2B dealings. Furthermore, a more tailored regulatory model that accommodates the practical and industry-specific needs of B2B transactions should be developed.
Hae Min Lee (Fri,) studied this question.