[2] In a case where a party to a contract prepared a certain form of contract in advance but gone through an individual negotiation as to a specific clause on the contract, whether the provision is subject to the Act on the Regulation of Terms and Conditions (negative), and the requirements for recognizing the existence of an individual negotiation

[3] In a case where the issue was whether a KIKO currency option contract which Company A entered into with Company B, etc. is subject to the Act on the Regulation of Terms and Conditions, the case holding that the structure of the currency option contract itself does not fall under the terms and conditions

[4] In a case where a bank sells to a customer the so-called zerdo over-the-counter derivatives, whether it is obligated to notify the customer of the theoretical value of options, fees, and the price generated therefrom included in the product structure (negative in principle)

[5] Details and degree of the duty to protect customers to be borne by a bank when entering into a currency option contract with a company with a foreign exchange hedging purpose

[6] Details, scope, and degree of duty of explanation borne by a financial institution in trading over-the-counter derivatives with professional knowledge and analysis ability with general customers

[7] The case holding that Byung bank violated the suitability principle and duty to explain, in case where Gap entered into two KIKO currency option contracts with Eul bank and traded sufficient exchange hedging for expected foreign currency inflows; Gap entered into a KIKO currency option contract with Byung bank in accordance with the active recommendation and explanation by the head of Byung bank branch having knowledge of such circumstances; and losses occurred due to rapid increase in exchange rates; and Byung bank claimed damages against Byung bank on the ground of violation of suitability, etc.

[8] Where comparative negligence is exceptionally not allowed even though the victim's negligence was committed with respect to the occurrence or expansion of damage caused by tort

[2] In a case where one of the parties to a contract prepared a contract in advance in a certain form and presented it to the other party, if the other party had an opportunity to adjust his/her interests by undergoing individual negotiations with regard to a specific provision, such provision shall be deemed an individual agreement not subject to the Act on the Regulation of Terms and Conditions. In order to determine that there was an individual negotiation, the result of the negotiation does not necessarily appear in the form of changing the contents of a specific provision, but it is recognized that there was a possibility that the other party to the contract could change the contents after sufficiently reviewing and considering the specific provision on the equal status with the party who prepared the specific provision in advance.

[3] In a case where the issue was whether a KIKO currency option contract which Company A entered into with Company B, etc. is subject to the Act on the Regulation of Terms and Conditions, the case holding that the structure of the said currency option contract itself does not fall under the terms and conditions on the ground that, like other OTC derivatives, the structure of the said currency option contract was prepared in advance by standardizing the structure and conditions so that Company B, etc. may appropriately change and use the structure and conditions according to the needs of customers, and the structure alone does not create any rights and obligations between the parties to the transaction, and the contract is completed only when specific terms and conditions, such as the contract amount,

[4] Generally, a seller of goods or services does not have a duty to inform or disclose to a buyer the elements, such as cost or sales profit, regarding the sales price of the goods or services he/she sells. This does not apply to the case where a bank engages in an over-the-counter derivatives transaction in the structure of cost (zerco) structure, which does not collect any cost or fees from a customer separately. Furthermore, the fact that a bank is seeking a certain profit as the counter-party to the transaction of over-the-counter derivatives due to the nature of a market economy can be anticipated by anyone. Therefore, barring any special circumstance such as where a contractual or statutory duty to notify the price components is acknowledged, a bank cannot be deemed to have a duty to notify the customer of the theoretical value, fees, and the price market value of the options included in the over-the-counter derivatives structure of the market, and the failure to notify the same cannot be deemed to have caused a fraudulent act to a customer or to have caused a mistake that the bank does not bear any cost or fees in the relevant over-the-counter derivatives transaction.

[5] In concluding a contract with an enterprise with a foreign exchange hedging purpose, a bank shall not invite a company to enter into a contract with a kind of product or a currency option contract with such characteristics as the expected foreign currency inflow amount of the company in question, asset and sale size, asset status including exchange hedging, necessity for exchange hedging, transaction purpose, transaction experience, degree of knowledge or understanding of the contract in question, and other exchange hedging contract. If a bank actively solicits a contract with a certain kind of product or a currency option contract with such characteristics that are inappropriate for the company in question to enter into the contract in light of its management situation in violation of its duty, it constitutes an illegal act against the principle of suitability. In particular, if an OTC derivatives contract is developed by using high financial engineering knowledge, it is highly likely that losses will be excessively expanded, and on the other hand, it is reasonable to recommend a bank to enter into an OTC derivatives contract with a strong risk of protecting customers compared to those of other financial institutions.

[6] Where a financial institution trades over-the-counter derivatives with professional knowledge and analysis capacity between general customers, barring cases where customers already know the structure and risk of the relevant over-the-counter derivatives, it is obligated under the good faith principle to clearly explain major transaction information, such as the inherent risk factors and potential losses, in a way that can accurately assess the risk of the relevant transaction. In such a case, major transaction information to be explained to customers include the structure and main contents of the relevant over-the-counter derivatives contract, the details of profits and losses which may be gained by customers through the transaction, especially the risk factors of loss. However, it is reasonable to see that there is no difference between the relevant over-the-counter derivatives’s detailed financial engineering structure or investment in other financial products. Moreover, even where a financial institution and its customers make transactions of over-the-counter derivatives with a zero market structure, it is difficult to see that the amount of fees is an important factor in assessing the risk of transaction, and thus, it is reasonable to see that a financial institution’s financial institution’s duty to explain information sufficiently to its customers, including investment risk factors.

[7] In a case where Gap entered into two KIKO currency options contracts with Eul bank, and entered into additional KIKO currency options contracts with Byung bank, upon active recommendation and explanation by the head of Byung bank branch having knowledge of such circumstances, and suffered losses due to the rapid increase in exchange rates, Eul sought damages against Byung bank on the grounds of violation of suitability, the case holding that Byung bank branch of the above contract, which was additionally entered into, had Gap actively recommended the above contract with an speculative nature accompanying a risk of excessive speculation, as it was for the purpose of foreign currency hedging, and Gap did not know the structure and risk of foreign currency inflow, in light of the above contract's progress and contents until the conclusion of the contract, and Gap did not have a duty to explain that it violated the above contract's duty to explain since Eul did not know that there was a risk of foreign currency inflow together with other two contracts and goods exchange contracts concluded with Eul bank.

[8] Where the victim was negligent in causing or expanding damage caused by a tort, the scope of compensation for damage by the perpetrator shall be taken into account as a matter of course in determining the scope of compensation for the damage, and where the harmful act is an act of acquisition, such as fraud, embezzlement, or breach of trust, comparative negligence shall not be allowed only in cases where the tortfeasor ultimately holds profits from the tort and thereby causes the result contrary to the principles of equity or good faith.

1. As to the invalidity of each currency option contract of this case

A. As to the ground of appeal on unfair conduct under the Civil Act

The plaintiffs' assertion that each currency option contract of this case is invalid because it exchanged put options and call options, and there is a substantial imbalance between the values, and even if the difference between options is deemed to be completed, the margin rate is too high. Thus, the plaintiffs' assertion that each currency option contract of this case is invalid as it constitutes an unfair practice, is rejected for the following reasons, etc.

In other words, it appears that the theoretical value of the options acquired by both parties in the process of concluding the instant currency option contract does not appear to have existed. However, the structure of each of the instant currency option contract is equal to the expectation profit of both the Plaintiffs and the Defendants taking into account the fluctuation in exchange rate. Therefore, even if the exchange rate after the conclusion of the instant contract differs from the initial anticipated exchange rate, the contract itself cannot be deemed to have been concluded significantly unfair due to the imbalance between the two parties. Furthermore, there is no ground to deem that the instant currency option contract constitutes a mutual contract for put options and call options, or that there is no agreement on the price of each option. In addition, the instant currency option contract itself differs from the theoretical value of put options acquired by the Defendants, and its difference is the structure that the Defendants acquired with the commission fee, but it is difficult to view that the Plaintiffs’ individual cost of put options, which constitutes the pertinent commission fee, is unreasonable or unreasonable to determine the amount of put options that are different from the total amount of put options, based on the theoretical content of put options.

In light of the records, although the court below's explanation was partially inappropriate, the conclusion of the court below's rejection of the plaintiffs' assertion is justifiable, and there is no error of law such as misunderstanding of legal principles as to unfair legal acts and misunderstanding of the structural problems of each currency option contract of this case, or misunderstanding of reasoning.

In particular, a gift exchange contract made between merchants is a contract which promises to deliver a certain amount, certain kind of foreign exchange at a specified exchange rate within a certain date or time in the future (see Supreme Court Decision 2001Da38593, Apr. 8, 2003). In light of its nature, the exchange contract and exchange exchange are different in terms of exchange rate, which is the basis of exchange rate at the market at the time of foreign exchange. Thus, the exchange contract and exchange are different in terms of exchange. In light of the facts established by the court below, in light of these legal principles, each contract of this case is a kind of modified gift exchange in which the transaction structure of a simple gift exchange contract depends on green conditions and green-out conditions, etc., and its basic contract terms are identical to the contract price at the time of maturity, and thus, it shall not be deemed as identical to the contract price at a certain exchange rate, and it shall not be deemed as identical to the contract price at the time of maturity. Therefore, the court below's judgment in the ground of appeal shall be justified.

In addition, the lower court’s explanation that the structure of each currency option contract of this case was equal to the expected interest of both the Plaintiffs and the Defendants in consideration of the accurate distribution of exchange rate fluctuations is merely an unfair one of the basic structure of each currency option contract of this case prior to the reflection of commission commission in the purport that if the structure of the contract is not unfair and its structure is not unfair, a subsequent change in external environment would not be deemed unfair even if the contract would result in any imbalance between the interests of both parties to the contract. Thus, it is difficult to accept the allegation in the grounds of appeal on other premise

B. As to the violation of the Regulation of Standardized Contracts Act

In a case where one of the parties to a contract prepared a contract in advance in a certain form and presented it to the other party and concluded a contract in accordance therewith, if the other party has an opportunity to adjust his/her own interest by undergoing individual negotiations with regard to a specific provision, such provision shall be deemed an individual agreement not subject to the Act on the Regulation of Terms and Conditions. In such a case, to deem that there was an individual negotiation, the result of the negotiation does not necessarily have to be in the form of changing the contents of a specific provision, and it is recognized that the other party to the contract could have changed the contents thereof after sufficiently reviewing and considering the relevant provision on an equal footing with the party who prepared the specific provision (see Supreme Court Decision 2008Da16950, Jul. 10, 2008).

In ordinary, prior to or at the same time, a basic contract is concluded between the parties pursuant to the monetary option transaction agreement, etc., the general provisions comprehensively stipulated in the monetary option transaction agreement, etc., including the definition of terms, the timing and method of performing the option transaction, default, termination, settlement at the time of termination, termination, prohibition of transfer and security, contractual currency, method of concluding the currency option transaction, etc., are generally likely to constitute a standardized contract, since there is no possibility of individual negotiation or choice between the parties.

However, according to the reasoning of the lower judgment, the specific terms and conditions of the instant currency option contract, such as the contract amount, exercise rate, green exchange rate, green-house exchange rate, green-house premium rate, and the contract period, which are major contract terms, are not pre-determined as to whether they were determined by individual negotiations between the Plaintiff 2 and the Defendants.

Furthermore, the structure of each currency option contract of this case, including the terms and conditions of melting and melting, the structure of the call options acquired by the bank, and the structure of not receiving the difference as commission fees, is prepared in advance as a standardized structure so that the Defendants can appropriately change the structure and conditions of the contract according to the needs of customers, and the structure alone does not create any rights and duties between the parties to the transaction. In addition, insofar as specific terms and conditions of the contract are completed only due to the conclusion of the contract, such as the contract amount, event exchange rate, melting and melting exchange rate, recreation, contract term, etc. determined by individual negotiations, it is difficult to view that only the structure itself constitutes a standardized contract.

In the same purport, the court below is just in holding that the structure of each currency option contract of this case cannot be a standardized contract, and there is no error in the misapprehension of legal principles as to the regulation of standardized contract, as otherwise alleged in the ground of appeal. In addition, as long as the structure of each currency option contract of this case cannot be seen as a standardized contract, the remaining grounds of appeal on the premise that the structure

C. As to the assertion on invalidation due to the violation of good faith

The lower court rejected the Plaintiffs’ assertion that each currency option contract of this case is null and void as it goes against the principle of good faith, on the grounds indicated in its holding.

In light of the records, the judgment of the court below on its part is just, and there is no ground to deem it illegal as otherwise alleged in the ground of appeal.

2. As to the plaintiffs' grounds of appeal on the assertion of deception, error, etc. concerning the value of options

A. Generally, a seller of goods or services is not obligated to inform or disclose to a buyer of the elements, such as cost or sales profit, with respect to the sales price of the goods or services he/she sells. This does not apply to cases where a bank engages in an over-the-counter derivatives transaction in the structure of cost (zerco) structure, which is not separately from a customer. Furthermore, the fact that a bank is seeking a certain profit as the counterparty of an over-the-counter derivatives transaction due to the nature of a market economy, any person may anticipate such profit. Therefore, barring any special circumstance such as where a contractual or statutory obligation to notify price components is recognized, a bank cannot be deemed to have a duty to notify the customer of the theoretical value, fees, and the mas market value arising therefrom of the options included in the over-the-counter derivatives structure, and it does not constitute deception to a customer, nor causes a mistake that a customer does not bear any cost or fees in the relevant over-the-counter derivatives transaction.

B. The lower court rejected all of the grounds as follows, on the ground that there was deception or mistake on the value, fees, and the meaning of the Coina in entering into the instant currency option contract, and thus, the Plaintiffs asserted that they were seeking damages on the ground of deception, and that they were seeking damages on the ground of deception.

① In other words, if a bank provides customers with options, it is inevitable to disclose the difference between the theoretical value of put options and put options. However, under Article 65 subparag. 6(e) of the former Rules on Supervision of Banking Business (amended by November 17, 2010), financial institutions provide “information at the market price level other than transaction cost,” and such provision provides that banks are not obliged to disclose the amount of fees to be received at least when it sells derivatives. It is difficult to view that the Defendants are not obliged to disclose the same amount of fees to be received from customers. Meanwhile, it is difficult to view that each of the above Articles 65 subparag. 6(c) of the Enforcement Decree of the Act provides that the Defendants are not obliged to disclose the prices of put options to customers, such as the Plaintiff’s trading of derivatives products, and that the Defendants are not obliged to disclose the prices of put options or fees to customers after the conclusion of the contract. Meanwhile, it is difficult to view that each of the above Articles 47(1) through 58(1) of the Financial Investment Services and Capital Markets Act, supra.

In light of the aforementioned legal principles and records, the above judgment of the court below is justifiable. Contrary to the allegations in the grounds of appeal by the plaintiffs, the court below did not err by misapprehending the legal principles as to deception under Article 110 of the Civil Act, or by misapprehending the legal principles as to mistake, or by failing to exhaust all necessary deliberations or by violating the rules of evidence.

C. In addition, the lower court rejected the allegation on the revocation of a contract based on the Plaintiffs’ mistake on the ground that it is difficult to view the matters concerning the option theory, the existence and scale of fees, etc. related to each currency option contract of this case as an important part of the contract.

In other words, the lower court determined that: (a) at the time of the conclusion of each currency option contract in this case, the stable price decline outlook was dominant; (b) around 2006, Plaintiff 2 actively advertised currency option products; (c) concluded three KIKO currency options contracts with Defendant Korea Standards Bank (Co., Ltd., Ltd., Ltd., hereinafter “Defendant Japanese Bank”); and (d) it appears that the decline in exchange rate was anticipated in the conclusion of each of the instant currency option contracts; (b) the KIKO currency option products had advantages of raising exchange rate compared to the instant currency option contract without the need to pay additional premium; and (c) the banks, based on these contents, actively promoted the KIKO option products; (d) the Defendants, including the Defendants, did not have any interest in the size of the terms and conditions of the terms and conditions of the contract, such as the exercise rate and melt currency option contract; and (e) the Defendants, even if having no interest in the terms and conditions of the terms and conditions of the instant contract, were to be compared with the Plaintiff Company’s 2’s exercise price options, and other favorable products.

The plaintiffs' assertion in the grounds of appeal is erroneous in the misapprehension of legal principles as to errors in the important part of a juristic act. However, the "misunderstanding of the important part of a juristic act" should be such an important part as would not have made an expression of intent if the competitor had not made such a mistake, or would not have made an expression of intent if he had been placed in the place of a general delivery mark. In light of such legal principles and all the circumstances as recognized by the court below, including the developments leading up to the conclusion of each currency option contract of this case, the above judgment of the court below is just, and there are no errors in the misapprehension of legal principles or incomplete deliberation,

D. The plaintiffs' remaining grounds of appeal concerning deception are that the judgment of the court below that the plaintiffs suffered losses from loss of expectation interest which the plaintiffs can enjoy due to increase in exchange rates, since they concluded the currency option contract in this case due to the defendants' deception. However, such assertion is based on the premise that the defendants' act constitutes deception, and as long as the deception itself is not recognized, it cannot be deemed that the above judgment of the court below is unlawful due to misunderstanding of legal principles or incomplete deliberation which affected the conclusion of the judgment. The plaintiffs' grounds of appeal on this part cannot be accepted.

3. As to the assertion regarding the notification of the exercise of call options

The purpose of the court’s exercise of the right to make a tiny is to give an opportunity to correct or supplement any inconsistency in the party’s assertion or to urge the submission of evidence for the disputed facts when incomplete or unclear points exist. Therefore, recommending submission of the right to make a statement for the requirement of legal effect which the parties did not assert, or for independent means of attack and defense, is in violation of the principle of pleading (see, e.g., Supreme Court Decision 89Meu7563, Apr. 27, 1990).

In the instant case, the Plaintiffs asserted that the instant currency option contract falls under the terms and conditions of unfair terms and conditions or goes against the principle of good faith and is null and void as it constitutes an unfair juristic act, and that they were revoked on the ground that it was an expression of intent by fraud or mistake.

The Plaintiffs’ assertion in the grounds of appeal regarding the notification of options is that the Defendants did not notify the Plaintiffs of the exercise of options, and thus, the Defendants did not waive the exercise of options. The lower court should have explained the Plaintiffs as to whether they sought return of unjust enrichment by asserting such reasons together, but did not make such explanation. The purport is that the Defendants violated the duty of explanation.

However, contrary to the allegations that the Plaintiffs asserted as the cause of claim invalidation or revocation of the instant currency option contract, the instant currency option contract is valid. In light of the legal principles as seen earlier regarding the duty to explain, the lower court’s failure to explain the above matters cannot be deemed as failing to exhaust all necessary deliberations due to failure to exercise the right to explain or perform intellectual duties, as alleged in the grounds of appeal. The Plaintiffs’ assertion in the grounds of appeal cannot be accepted.

4. As to the violation of the principle of suitability

A. As to the plaintiffs' grounds of appeal on the suitability principle, etc.

The purpose of the exchange hedge transaction using over-the-counter derivatives is not to maximize profits, but to eliminate risks associated with the fluctuation in the price of foreign exchange goods, an underlying asset, by fixing the exchange rate to be applied in the future at a certain rate of exchange, regardless of future exchange rate fluctuations. In the case of a KIKO currency option product, if a customer who holds or is expected to hold in the future a foreign exchange in kind equivalent to the exchange contract price, enters into a contract for the purpose of foreign exchange hedging in the said foreign exchange goods, then the relevant contract itself would incur losses if the exchange rate increases, but even if the exchange rate increases due to the occurrence of exchange gains in the said foreign exchange goods, the overall profits and losses will be nonexistent, and thereby, the original purpose of the contract is to hedge exchange by concluding the currency option contract.

In light of this point, a currency option contract may be disadvantageous to a customer when there is a difference in the theoretical value of options granted between a customer and a bank, or when exchange rate increases, it cannot be said that the conclusion of such a currency option contract would rather be exposed to a larger exchange risk than before the contract is concluded.

Therefore, the lower court’s rejection of the Plaintiffs’ assertion that each currency option product of this case is inappropriate for foreign exchange hedging itself is acceptable. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by violating the principle of suitability, misapprehending the legal principles as to the cancellation of contract or compensation for damages due to deception or mistake, failing to exhaust all necessary deliberations, or omitting judgment. The Plaintiffs’ allegation in the grounds of appeal on this part is unacceptable.

B. As to the grounds of appeal by Defendant New Bank Co., Ltd. on the principle of suitability

(1) In concluding a contract with an enterprise with a purpose of foreign exchange hedging, a bank shall not invite a company to enter into a contract with a kind of product or a currency option contract with such characteristics, including the expected foreign currency input amount, assets and sales size of the company, the asset status of the foreign exchange hedging, whether it is necessary for exchange hedging, transaction purpose, transaction experience, degree of knowledge or understanding of the contract in question, and other exchange hedging contract. In light of the above, if the bank actively solicited the contract to enter into a contract which causes an excessive risk in light of the company’s management situation in breach of such a duty, it shall be deemed that such solicitation constitutes a tort as it violates the principle of suitability and is in violation of the duty to protect customers.

In particular, over-the-counter derivatives are likely to excessively increase losses if predicted and different situations arise by using highly advanced financial engineering knowledge. On the other hand, banks are more reliable than financial institutions specialized in investment in various aspects, such as requirements for authorization, scope of business, governance and supervisory system, and thus soliciting of banks may have a strong impact on corporate decision-making. Therefore, it is reasonable to view that banks are more obligated to protect customers than other financial institutions when soliciting transactions of over-the-counter derivatives with a high risk as above.

(2) According to the reasoning of the lower judgment, the following facts are revealed.

① In order to avoid exchange risk to USD 1 received by exports, Plaintiff 2, who had operated the “Sa precise industrial company,” which produced and exported Hands, dental appliances, dental appliances Hands, etc., entered into the instant contract with Defendant Il Bank on August 28, 2007, and entered into the instant contract on October 29, 2007. The sum of the contract amounts of call options under the instant contract Nos. 1 and 2 was USD 1,00,000 per month, and due to the increase in exchange rate, loss was incurred from the settlement date around November 2007.

② Around February 208, the Nonparty’s branch of the Defendant New Bank Co., Ltd. (hereinafter “Defendant New Bank”) visited Plaintiff 2 and explained KIKO currency option products, the Nonparty entered into the first and second contracts with the Defendant Il Bank, and made profits for the first few months, but incurred losses after October 2007. After which Nonparty visited Plaintiff 2’s office again, was using the call option in the first and second contracts with the Defendant Il Il Bank, which was concluded with the Nonparty 2, and took a method of settling the difference in Korean currency instead of paying the difference in Korean currency with the volume of the export price. The Nonparty again concluded the currency option contract with the Plaintiff 2, taking into account the fact that the exchange rate again fell after the increase in the exchange rate compared with the beginning of the year, and then concluded the currency option contract with the Plaintiff 1 and 2, taking into account the fact that the exchange rate is less than KRW 90,000,000, as predicted by domestic and foreign experts.

③ As such, while the Nonparty solicited Plaintiff 2 to conclude an additional call option contract, Plaintiff 2 expressed an intention to subscribe to a new call option product to the Defendant New Bank as the exchange rate fell gradually in March 17, 2008. Accordingly, on April 11, 2008, Plaintiff 2 entered into the instant third contract with Defendant New Bank with the amount of KRW 1,00,000 per month of the contract price.

④ According to the documents submitted by Plaintiff 2 to Defendant New Bank immediately after the conclusion of the instant third contract, the estimated export amount in 2008 USD 12,500,500 was the estimated export amount.

(3) Examining the above facts in light of the legal principles as seen earlier, Plaintiff 2 was engaged in exchange hedge transactions of USD 12,00,000 per annum on the basis of the contract amount of call option through two options currency options that were already concluded with Defendant 1 Bank in consideration of the estimated export amount in 2008. However, in light of the fact that Plaintiff 2 entered into the instant contract with Nonparty, upon Nonparty’s recommendation, the contract of this case was concluded for the purpose of exchange rate increase, and thus, it appears that Plaintiff 2 entered into the instant contract with Plaintiff 2 with the same purpose as the instant contract of this case, based on the fact that the estimated holding amount of spot currency exchange for the settlement of the contract amount of exchange option pursuant to each of the instant currency options was insufficient. Accordingly, considering the instant contract of this case and the spot currency exchange as the underlying assets thereof, it appears that Plaintiff 2 entered into the instant contract of this case with the intent to exchange 1, 200,000 per annum 3 contracts of this case.

Considering the nature of the 3 contract in this case, the developments leading up to the conclusion of the 3 contract, the transaction purpose of Plaintiff 2, and financial situation, etc. comprehensively, the Nonparty, who did not have the purpose of speculative transaction, actively recommended Plaintiff 2 to enter into the 3 contract in this case with the speculative nature involving excessive risk, and thus, should be deemed to have neglected the duty of protecting customers in violation of the suitability principle.

In the same purport, the court below is just in holding that Defendant New Bank violated the suitability principle, and there is no error in the misapprehension of legal principles as to customer protection obligation, or in violation of the principle of free evaluation of evidence, contrary to what is alleged in the ground of appeal. In addition, the ground of appeal that Defendant New Bank was not examined as to whether a third contract of this case involving excessive risk is a transaction involving excessive risk, shall be considered as an issue of the selection of evidence and fact-finding, which are the exclusive authority of fact-finding, and shall not be considered as a legitimate

5. As to whether the duty to explain has been violated

A. Details and scope of the duty to explain

In cases where a financial institution trades over-the-counter derivatives with specialized knowledge and analysis capacity between general customers, unless the customer has already been well aware of the relevant over-the-counter derivatives, it is obligated under the good faith principle to clearly explain major transaction information, such as risk factors inherent in the transaction in order to accurately assess the structure and risk of the transaction and potential loss (see Supreme Court Decision 2010Da55699, Nov. 11, 2010). In such cases, major transaction information to be explained to the customer by the financial institution includes both the structure and main contents of the relevant over-the-counter derivatives contract, the details of profits and losses that the customer may gain through the transaction, especially the risk factors of loss.

However, it is not necessary to explain any difference in profit and loss compared with the case of investment in the detailed financial engineering structure of the over-the-counter derivatives or other financial instruments. Moreover, even if a financial institution and its customer engage in the over-the-counter derivatives transaction in the counter-counter derivatives structure, the amount of fees, etc. shall not be considered an important factor for assessing the risk of the transaction. Thus, it is reasonable to view that there is no obligation to explain even the fees included in the product structure and the price generated therefrom, unless the fees are remarkably higher than the market practice.

Meanwhile, a financial institution must explain to the extent that it can sufficiently understand major information on the transaction (see, e.g., Supreme Court Decision 2001Da11802, Jul. 11, 2003) by comprehensively taking into account the characteristics and risk level of financial products, transaction purpose, investment experience and ability of customers (see, e.g., Supreme Court Decision 2001Da11802, Jul. 11, 2003). In particular, the risk structure is that the pertinent financial institution is developed by highly advanced financial engineering knowledge, and the outcome of profit and loss varies considerably depending on the unexpected change factors such as exchange rate. Furthermore, in cases where the objective situation appears to have reached the degree of pursuing exchange margin based on exchange rate rather than exchange hedging purpose, a financial institution is obligated to explain the risk of transaction of over-the-counter derivatives in detail so that customers can clearly understand

B. As to the plaintiffs' grounds of appeal on the duty to explain

The court below held that it is difficult to view Defendant Il-il Bank violated its duty of explanation on the grounds that it violated its duty of explanation by failing to explain the option price and fee in detail with respect to the contract Nos. 1 and 2 of this case. In light of the fact that it could not be said that the bank had any duty of disclosure of the option theory and fee size, and that Plaintiff 2 could have sufficiently anticipated that the bank would gain certain profits through the sale of the currency option product.

In the instant case where it is difficult to view that the fee rate of each currency option contract of this case is significantly excessive compared to that of other financial transactions, the judgment below is justifiable in accordance with the legal principles as seen earlier. In so doing, it did not err by misapprehending the legal principles as to the duty of explanation on the value and hidden fee of options, new acquired exchange risk, etc., as otherwise alleged in the ground of appeal.

Meanwhile, according to the records, the plaintiffs asserted that the defendants should have explained that the call option with a much more expected loss than the expectation profit of put options received from the defendants should be exposed to the higher exchange risk than the contract of this case. However, the court below did not explicitly determine this point. However, the plaintiffs' ground of appeal is justified. As seen earlier, the court below determined that the theory of put options acquired between the plaintiffs and the defendants has no duty to disclose the amount of fees equivalent to the difference between the theory of put options and the theory of put options. As such, the court below's above determination is deemed to contain the purport of rejecting the plaintiffs' assertion. Further, the above reasoning that the theory of put options exceeds the plaintiffs' theory of put options is not sufficient to deem that the plaintiffs are exposed to the greater exchange risk. Thus, the plaintiffs' assertion in this part is rejected, and the court below's assertion in this part of the grounds of appeal did not clearly affect the conclusion of the judgment.

In addition, the defendants violated the duty to explain the calculation method of the settlement amount to be borne by the plaintiffs when early termination is not only asserted in the supplemental appellate brief that was not submitted after the expiration of the period for submitting the appellate brief, but also in the original trial, it is not a legitimate ground

C. As to the ground of appeal on Defendant New Bank’s duty to explain

In light of the progress and contents of the contract, etc. up to the conclusion of the contract of this case No. 3, Plaintiff 2 was aware of the structure and risk of the contract itself of this case No. 3, but it appears that Plaintiff 2 was not aware of the risk considering the expected holding amount of the contract of this case No. 1, No. 2 and spot exchange. However, the Nonparty, in fact, explained the contract of this case No. 3 with speculative character as hedge transaction, thereby causing Plaintiff 2 to enter into a contract by misunderstanding it, and thus, Defendant 2 did not perform its duty to explain in relation to the conclusion of contract of this case No. 3.

The court below's decision to the same purport is just, and contrary to the allegations in the grounds of appeal by the Defendant New Bank, there were no errors in the misapprehension of legal principles as to the duty to explain and the duty to protect customers, or

6. As to the plaintiffs' ground of appeal on comparative negligence offsetting

If the victim was negligent with regard to the occurrence or expansion of damage caused by a tort, it shall be taken into account as a matter of course in determining the scope of the tortfeasor's damage compensation. If the harmful act is an act of acquisition, such as fraud, embezzlement, or breach of trust, and if the harmful act is recognized as comparative negligence, comparative negligence is not allowed only in cases where the perpetrator ultimately holds profits from the tort, thereby causing the result contrary to the principles of equity or good faith (see Supreme Court Decision 2006Da16758, 16755, Oct. 25, 2007, etc.).

However, since the violation of the suitability principle and the duty to explain against the plaintiff 2 cannot be seen as an act of acquisition, it is reasonable to consider the plaintiff's negligence in determining the scope of damages for the defendant's new bank. The ground of appeal on this part is that the plaintiff 2's mistake is caused by the violation of the duty to protect the customer of the defendant's new bank, and thus the amount of damages for the plaintiff 2's negligence should not be mitigated. However, it cannot be accepted in light of the above legal principles.

7. Conclusion

Therefore, all appeals by the Plaintiffs and Defendant New Bank shall be dismissed, and the costs of appeal between Plaintiff 2 and Defendant Il Bank shall be borne by Plaintiff 2, and the costs of appeal between Plaintiff 2 and Defendant Il Bank shall be borne by each party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yang Chang-tae (Presiding Justice)