The part against the defendant is reversed, and that part of the case is remanded to the Seoul High Court.

1. A penalty is presumed to be the liquidated damages pursuant to Article 398(4) of the Civil Act. Therefore, in order to be interpreted as a penalty for breach of contract, special circumstances should be asserted and proved (see, e.g., Supreme Court Decision 2009Da9034, Jul. 9, 2009). The legal nature of a penalty should be reasonably determined by comprehensively taking into account not only the names or phrases used in relation to the penalty at the time of concluding the contract, but also the economic status of the contracting party, the details and contents of the contract, the course of negotiations, the details and process of the agreement to pay the penalty, the principal purpose of the contract by the contracting party, the nature of the duty to guarantee the performance through the penalty, whether it is separately claimed except for the penalty in the event of default, the amount of the penalty, the amount of the penalty, the ratio of the penalty to the total amount of the penalty, the amount of the

(see, e.g., Supreme Court Decision 2012Da65973, Jul. 14, 2016). “Unfairly excessive cases” where a court may reduce the estimated amount of damages pursuant to Article 398(2) of the Civil Act does not cause any damage.

It is insufficient to say that the amount of damages incurred is less than the estimated amount of damages, and it means cases where the payment of such estimated amount of damages is deemed to result in the loss of fairness by imposing unfair pressure on the debtor, taking into account the status of the contractor, the purpose and content of the contract, the developments leading up to the scheduled amount of damages, transaction practices and other various circumstances.

(2) On March 24, 2016, the lower court (see, e.g., Supreme Court Decision 2014Da3115, Mar. 24, 2016).