Law Firm Lee-sung, Counsel for the plaintiff-appellant

[Defendant-Appellant] Plaintiff 1 and 2 others

Attorney Kim Jong-soo et al., Counsel for the plaintiff-appellant

The costs of appeal are assessed against the defendant.

1. Case summary and key issues

A. According to the reasoning of the lower judgment, the following facts are revealed.

(1) On August 26, 2015, the Plaintiffs entered into a contract with the Defendant, who is an emigration broker, to arrange employment of non-employed workers in the United States (hereinafter “instant contract”) as follows.

The term of validity of the contract of this case shall be from the date of the preparation of the contract to the date of the acquisition of the interest visa by the plaintiffs (Article 1 subparagraph 1), the foreign brokerage fee shall be US$30,00,000, and the payment method shall be made by dividing it into the time of the contract (the first), the time of the acquisition of labor permission (the second), the time of the acquisition of immigration permission (Article 4), and the time of the acquisition of immigration permission (the third vehicle) (Article 4), 80% of the overseas brokerage fee already paid if the immigration permission is not granted (Article 5 subparagraph 4), and 50% of the fees already paid if the procedures of the plaintiffs become impossible due to the change in the immigration policy of the United States (Article 5 subparagraph 6).

(2) The U.S. non-employed employment process is classified into ① labor permission phase in the U.S. Ministry of Labor, ② immigration permission phase in the U.S. immigration control phase, ③ immigration control phase in the U.S. Embassy in Korea, and ③ immigration control phase in the U.S. Embassy in May 2016. Accordingly, the Plaintiffs paid the Defendant the fee for overseas good offices under the instant contract. However, the U.S. Embassy in Korea had an interview with the Plaintiffs on November 2016, and then has issued an additional administrative review (hereinafter referred to as “AP”) on the same page, and around September 2017, the Embassy in Korea returned the decision to review the case before the applicant’s decision on the qualification for non-party issuance.

(3) On December 1, 2017, the Plaintiffs asserted the termination on the grounds of change of circumstances regarding the instant contract, and filed the instant lawsuit claiming the return of the fee already paid to the Defendant.

B. The key issue is whether the termination of a contract on the ground of changes in circumstances can be seen as a ground for the termination of a contract, without proceeding with a visa issuance procedure in accordance with the AP/TPP decision.

2. Lower judgment

The lower court determined that the termination of the instant contract on the grounds of change in circumstances was recognized on the following grounds.

The U.S. Embassy in Korea did not proceed with a long-term visa issuance procedure for the plaintiffs more than the originally anticipated period by making a AP/TPP decision, and continued to be interrupted when and when the plaintiffs were to receive the visa. Accordingly, there was a significant change in circumstances that could not have been predicted by the parties at the time of entering into the instant contract regarding the issue of visa for the plaintiffs, which were the basis of the contract by the plaintiffs and the defendant. In such a situation, it is contrary to the good faith principle to ensure that the plaintiffs may escape from the contract by seeking a final decision. As an exception to the principle of contract observance, the plaintiffs may terminate the instant contract on the ground of change in circumstances.

3. Supreme Court Decision

A. As to the principle of trust and good faith, Article 2(1) of the Civil Act provides, “The exercise of rights and the performance of duties shall be in accordance with good faith.” This principle is an abstract norm that a party to a legal relationship should not exercise rights or perform duties by any content or method that violates equity or lowers trust, taking into account the other party’s interests, and is acting as a general principle that leads to the overall legal order (see Supreme Court en banc Decision 84Da1131, 1132, Apr. 9, 1985; Supreme Court Decision 2017Da52712, Jun. 10, 2021).

The precedent recognizes the principle of change of circumstances as the derived principle of the principle of trust and good faith in order to resolve unexpected imbalances caused by the occurrence of unexpected circumstances when concluding a contract. In other words, in a case where the circumstance forming the basis of the formation of a contract is significantly changed, the parties could not have predicted it at the time of the formation of the contract, and thereby maintaining the contract as it is would not cause serious imbalance to the interests of the parties or make it impossible to achieve the purpose of the contract concluded, the contract may be rescinded or terminated as an exception to the principle of contract observance (see, e.g., Supreme Court Decisions 2004Da31302, Mar. 29, 2007; 2012Da13637, Sept. 26, 2013).

In this context, the circumstance refers to the circumstances forming the basis of the formation of a contract with the parties, and does not include circumstances in which the parties did not use as the basis of a contract, or circumstances in which either party intended to give disadvantages or risks resulting from changes (see Supreme Court Decision 2016Da249557, Jun. 8, 2017). Whether there is a possibility of predictability as to changes in circumstances, rather than abstract and general determination, it should be determined individually by comprehensively taking into account various circumstances, including the type and content of the contract, status and status of the parties, transaction experience and awareness possibility, and large and specific risks of change in circumstances, in a specific case. In such a case, from a reasonable person’s perspective, if the parties predicted changes in circumstances, it may be deemed that there is no predictability unless there is any special circumstance.

Even if a change in economic situation, etc. causes loss to the parties, a reasonable person may not cancel or terminate a contract on the grounds of change in circumstances if it was possible to anticipate the change in circumstances from a reasonable person’s standpoint. In particular, a continuous contract is highly likely to cause changes in circumstances that could not have been anticipated to the parties because of a large gap between the time when the contract was concluded and the time when the contract was performed. However, in such a case, the mere fact that the change in economic situation, etc. causes disadvantages to the parties to the contract is insufficient and the above requirements should be satisfied

B. Examining the following circumstances revealed in the reasoning and records of the lower judgment in light of the aforementioned legal doctrine, it is reasonable to deem that the Plaintiffs may terminate the instant contract on the ground of changes in circumstances.

(1) At the time of the instant contract, according to the U.S. Embassy’s work performance practice in the Republic of Korea, the procedure for issuance of visa was completed on a two-year basis in the case of a non-employed worker. The Defendant explained to the Plaintiffs that a non-employed worker can obtain permanent residency for a period of one to two years, and provided a notice on the same content. As such, both the Plaintiffs and the Defendant are anticipated to be issued at the latest within two years, and the contract was concluded on August 26, 2015 based on the premise of the formation of the contract.

(2) However, from March 2016, the U.S. Embassy began to make a PP decision on the application of a Korean non-employed worker. From September 2016, the U.S. Embassy began to make a PP decision on the application of a non-employed worker. Since then, the procedures for issuing visas in Korea are no longer followed, and there are no cases where a Korean non-employed worker was paid a non-employed worker. The Plaintiffs also received a AP decision on November 2016, 2016, and the issuance procedure was suspended and the reasons or resumption of the suspension of the procedures for non-employed worker issuance was entirely unknown.

The parties cannot be deemed to have predicted such change in circumstances at the time of concluding the instant contract, and cannot be deemed to have assumed the disadvantages or risks arising therefrom against the Plaintiffs. It is reasonable to view that the Plaintiffs would not conclude the instant contract or have modified or added some of the terms and conditions of the contract if they anticipated such circumstances.

(3) Comprehensively taking account of these circumstances, the instant contract was significantly modified to the circumstances relating to the procedure or period for the issuance of visa, which served as the basis of the formation of the contract, and may not be anticipated at the time of the formation of the contract by the parties, and may be deemed to constitute a case where the purpose of the contract was not achieved, or where the party’s interests were significantly

(4) The Defendant asserts that the provision of the above contract should be preferentially applied prior to applying the legal principles on the change of circumstances, since the suspension of the procedure for issuing visa to the Plaintiffs constitutes “where the procedure for issuing visa became impossible due to the change of immigration policy in the United States” under Article 5 subparag. 6 of the instant contract. However, as seen above, there is no proof that the procedure for issuing visa to the Plaintiffs was interrupted, and there is no proof that there was a change of official policy such as the amendment of the U.S. Civil Code or the entry into force of administrative orders, and thus, the above provision cannot be applied solely on the trend or presumption that the procedure for the Plaintiffs was impossible due to the change of immigration policy in the

C. The lower court did not err by misapprehending the principle of trust and good faith or the legal principles on termination due to changes in circumstances, etc., as alleged in the grounds of appeal, in determining the termination of the contract of this case on the grounds of changes in circumstances. The Defendant’s remaining grounds of appeal are without merit, and thus cannot be accepted. Furthermore, in light of the record, the lower court did not err by violating the legal principles on the

In similar cases to this case, the Supreme Court recognized the termination due to changes in circumstances on the grounds of AP/TPP decision (see Supreme Court Decision 2018Da208406, Nov. 9, 2018). Meanwhile, the Supreme Court’s decision cited in the ground of appeal by the Defendant is not appropriate for the different cases to be invoked.

4. Conclusion

The Defendant’s appeal is dismissed in entirety as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jae-hyung

Justices Ansan-chul

Justices Lee Dong-gu