The article aims to explore how the Korean Civil Code can deal with transactional problems arising from asymmetric information or/and unequal bargaining power, given that there have been few researches which examined why unfair transactions between consumer and producer occur even in a competitive market. In fact, most transactions or contracts between consumer and producer are made under conditions of asymmetric information and unequal bargaining power. Asymmetric information relates to the content of products and services while unequal bargaining power concerns the relationship between consumer and producer. They are likely to bring about unfair transactions even in relatively competitive markets and are also likely to occur where the distribution of the per capita stakes of consumer and producer are skewed. In most transactions, the per capita impact for consumers is much lower than that for producers. Low per capita impact for consumers refers to cases where there are many consumers each of whom may obtain a little benefit from the total volume of transactions. In contrast, high per capita impact for producers means that there are a few producers each of whom may obtain large benefit from the total volume of transactions. The amount of benefit that consumer and producer obtain from each transaction may not make a big difference on an individual basis. However, the aggregate impact for all of consumers and producers is about same. An individual consumer is less likely to become a repeating buyer while the producer is highly likely to become a repeating seller. The aggregate impact for consumers and producers is distributed widely and narrowly, respectively. The per capita stake of transactions for each consumer and producer is low and high, respectively, thus its distribution is skewed. Where such skewed distribution provides an advantage for concentrated producers (minority) over consumers (majority), high per capita producers take advantage of low per capita consumers due to asymmetric information and unequal bargaining power. Low per capita consumers are unlikely to have an incentive to correct asymmetric information and unequal bargaining power over high per capita producers. In contrast, high per capita producers are likely to have incentives to mislead low per capita consumers. As such, high per capita producers are likely to prefer "rent-seeking activities" to "technological innovation". Originally, rent is an economic concept, which is related to profits rather than productivity. Rent-seeking may increase profits without improving productivity or innovation by increasing the volume of sales. Rent-seeking, however, plays a criticized role in the functioning of markets. Rent-seeking activities have been strongly criticized for their adverse effects on competition and their waste of resources. In general, a producer advertises and uses a standard form contract in order to increase the volume of transactions and decrease transaction costs. Advertising and using a standard form contract may turn out to be rent-seeking activities. Advertising differentiates similar products and equalizes different products toward low per capita consumers, who have little incentive to distinguish products and services on the market. Using a standard form contract does not make consumers negotiate their own contract. Consequently, it brings large benefits to high per capita produces, who have large incentives for decreasing transactional costs and taking advantage of consumers in contractual terms. Such unfair transactions have rarely been reviewed by courts. In other words, courts have not taken any active role under the Civil Code to intervene in unfair transactions. This is because the Civil Code is passed and translated under the assumption that all contracts are made based on "freedom of contract" and equal bargaining power between parties. As such, the Civil Code is not expected to take account of the unequal relationship between consumer and producer. Courts have rarely intervened in the effectiveness of contacts despite a few provisions such as Civil Code § 104, 109, and 110. These provisions are entitled to have effect on correcting asymmetric information and unequal bargaining power by invalidating a contract. This article suggests, therefore, that courts should reconsider the role of these provisions in this age of informational asymmetry and unequal relationships between consumers and producers.

The article aims to explore how the Korean Civil Code can deal with transactional problems arising from asymmetric information or/and unequal bargaining power, given that there have been few researches which examined why unfair transactions between consumer and producer occur even in a competitive market. In fact, most transactions or contracts between consumer and producer are made under conditions of asymmetric information and unequal bargaining power. Asymmetric information relates to the content of products and services while unequal bargaining power concerns the relationship between consumer and producer. They are likely to bring about unfair transactions even in relatively competitive markets and are also likely to occur where the distribution of the per capita stakes of consumer and producer are skewed. In most transactions, the per capita impact for consumers is much lower than that for producers. Low per capita impact for consumers refers to cases where there are many consumers each of whom may obtain a little benefit from the total volume of transactions. In contrast, high per capita impact for producers means that there are a few producers each of whom may obtain large benefit from the total volume of transactions. The amount of benefit that consumer and producer obtain from each transaction may not make a big difference on an individual basis. However, the aggregate impact for all of consumers and producers is about same. An individual consumer is less likely to become a repeating buyer while the producer is highly likely to become a repeating seller. The aggregate impact for consumers and producers is distributed widely and narrowly, respectively. The per capita stake of transactions for each consumer and producer is low and high, respectively, thus its distribution is skewed. Where such skewed distribution provides an advantage for concentrated producers (minority) over consumers (majority), high per capita producers take advantage of low per capita consumers due to asymmetric information and unequal bargaining power. Low per capita consumers are unlikely to have an incentive to correct asymmetric information and unequal bargaining power over high per capita producers. In contrast, high per capita producers are likely to have incentives to mislead low per capita consumers. As such, high per capita producers are likely to prefer "rent-seeking activities" to "technological innovation". Originally, rent is an economic concept, which is related to profits rather than productivity. Rent-seeking may increase profits without improving productivity or innovation by increasing the volume of sales. Rent-seeking, however, plays a criticized role in the functioning of markets. Rent-seeking activities have been strongly criticized for their adverse effects on competition and their waste of resources. In general, a producer advertises and uses a standard form contract in order to increase the volume of transactions and decrease transaction costs. Advertising and using a standard form contract may turn out to be rent-seeking activities. Advertising differentiates similar products and equalizes different products toward low per capita consumers, who have little incentive to distinguish products and services on the market. Using a standard form contract does not make consumers negotiate their own contract. Consequently, it brings large benefits to high per capita produces, who have large incentives for decreasing transactional costs and taking advantage of consumers in contractual terms. Such unfair transactions have rarely been reviewed by courts. In other words, courts have not taken any active role under the Civil Code to intervene in unfair transactions. This is because the Civil Code is passed and translated under the assumption that all contracts are made based on "freedom of contract" and equal bargaining power between parties. As such, the Civil Code is not expected to take account of the unequal relationship between consumer and producer. Courts have rarely intervened in the effectiveness of contacts despite a few provisions such as Civil Code § 104, 109, and 110. These provisions are entitled to have effect on correcting asymmetric information and unequal bargaining power by invalidating a contract. This article suggests, therefore, that courts should reconsider the role of these provisions in this age of informational asymmetry and unequal relationships between consumers and producers.

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Informational Asymmetry, Unequal Bargaining Power, Rent-Seeking, Resource Allocation Efficiency, Advertisement, Adhesion Contract, Good Faith, Unfair Terms.