[According to the Law of Flexibility] 72. Key Points for Standard Contracts on Cosmetic OEM and ODM Supply①

*This content was translated by AI.

Like any contract dispute, cosmetic outsourcing production disputes share common characteristics.

The parties involved remember completely different contracts. The ordering party claims, "We agreed to include the culture medium," while the manufacturer says, "I have never heard of such a statement." Of course, courts prioritize documentary evidence in resolving such conflicts.

In one case, the ordering party argued that a specific product name evoked the presence of a culture medium and that relevant emails and text messages were exchanged after the contract was signed. However, the court rejected the existence of any agreement because the contract document did not specify whether the culture medium was added or its content level, and all communications occurred after the contract was finalized. In another case with similar facts, where the ordering party filed a lawsuit as the plaintiff, the outcome was no different. The court dismissed claims of deception and mistake, citing that the plaintiff was a professional businessperson with experience in cosmetic distribution and had explicitly included the culture medium and its ratio in contracts with other companies.

A key point to note here is the evaluation as a "professional businessperson." Even if someone is an influencer, if they have prior experience selling products, they are treated as a business rather than a consumer in court. This means individuals bear responsibility for failing to verify matters they should have checked themselves.

If no written document exists, the contract may be deemed non-existent (oral agreements can theoretically be recognized, but proving them is difficult, and such recognition is even less likely in commercial transactions like this). In one instance, an ordering party sent a formal notice demanding sample production, yet the court refused to recognize the contract's validity because the document lacked specific details about the cosmetics, manufacturing methods, and pricing.

Personal notes and consultation guidelines created by one party were not accepted as evidence due to lack of confirmation from the other side. A single order form, which might appear merely procedural, actually served as the legal basis for a claim. In the same case, the court also determined that the basic contract had already expired years earlier. Failing to specify the contract period, automatic renewal terms, or termination conditions can lead to disputes over whether the contract remains valid.

Misunderstandings about the counterparty are also common. Just because a large manufacturer's name was mentioned does not mean a contract was directly made with that factory. In one case, an intermediary company separately signed an OEM contract with the actual manufacturer and supplied goods. The court ruled it difficult to consider the person involved in the transaction as an authorized agent of the real manufacturer. As a result, no payment could be claimed from the factory itself. If the intermediary distributor lacks financial resources, there is effectively nowhere to recover funds. This means that if a large manufacturer's name appears only as a reference in a contract between the ordering party and another entity—not as a formal contracting party—it is not safe to assume anything based solely on the mention of that name.

It is advisable to conduct orders in writing, specify ingredients and their quantities numerically, and securely preserve confirmed samples. Clearly documenting the contract's end date is also crucial. If the contract period and termination conditions are left blank, disputes may arise even over whether the contract remains valid when conflicts occur.

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*This content was translated by AI.