[2] In a case where Gap corporation and Eul bank representing the buyer in relation to the sale and purchase of shares for corporate takeover and Eul bank established a memorandum of understanding that "where the memorandum of understanding is cancelled due to the buyer's responsible reasons, the warranty bond paid by the buyer and the interest accrued therefrom shall belong to the seller as a penalty for breach of contract, the case holding that the warranty bond has the nature as liquidated damages amount

[2] In a case where Gap corporation and Eul bank representing the buyer in relation to the sale and purchase of shares for corporate acquisition and Eul bank formed a memorandum of understanding, and "where the memorandum of understanding is cancelled due to the buyer's responsible causes, the warranty bond paid by the buyer and its interest shall belong to the seller as a penalty for breach of trust," the case holding that the warranty bond has the nature of liquidated damages, in full view of the following: (a) the above provisions, together with other provisions, are resolved by forfeiture of the warranty bond only; (b) other monetary issues arising from the cancellation of the memorandum of understanding due to the buyer's responsible causes attributable to the buyer; and (c) the seller cannot compensate the seller for damages even if any other damages occur to the seller by explicitly excluding other claims for indemnity or restitution; and (d) the parties were actually willing to enforce the conclusion of the final contract through the warranty bond and to resolve the issues of damages that may occur in the future.

1. As to the third ground for appeal

The lower court acknowledged the facts as stated in its reasoning after comprehensively taking account of the evidence adopted. ① The Plaintiff, on November 14, 2008, represented by the Defendants on behalf of the Defendant Korea Development Bank (hereinafter “Defendant Industrial Bank”) concluded the instant MOU with respect to the sale and purchase of the shares issued by the Defendants, Daewoo Shipbuilding Co., Ltd. (hereinafter “subject Company”). ② The instant MOU has legal binding force between the sellers and the buyers, and the Plaintiff’s MOU could verify the subject Company and its affiliates, on the ground that there was no confirmation of the sales price amount corresponding to 5% of the sales price, and the Plaintiff’s MOU did not enter into a final contract by December 29, 2008, on the grounds that the final purchaser of the instant MOU was not liable for the conclusion of the instant MOU and the final purchaser’s request for the cancellation of the contract, and the lower court determined that the Plaintiff’s final purchaser’s demand for the cancellation of the contract and the final purchaser’s demand for the cancellation of the contract should be confirmed of the contract.

Examining the reasoning of the judgment below in light of the records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles regarding the requirements for attribution of the seller of the performance bond under Article 12(2) of the MOU of this case, or by exceeding the bounds of the principle

On the other hand, the Plaintiff’s ground of appeal on this part, regardless of the completion of the confirmation room’s work, argues that the provision that the Plaintiff was obligated to conclude a final contract by December 29, 2008, beyond the reasonable scope of private autonomy, is in essence infringed upon the freedom of the conclusion of the contract and is contrary to the nature of the memorandum of understanding, and thus null and void. However, as seen earlier, the Plaintiff’s assertion cannot be accepted, on the ground that the Plaintiff and the Defendant Industrial Bank determined the completion of the confirmation room under the agreement between the Plaintiff and the Defendant Industrial Bank as the prior condition of the conclusion of the transaction, not the conclusion of the final contract, is contrary to the reasonable scope of private autonomy, thereby infringing upon the freedom of the conclusion of

2. Regarding ground of appeal No. 2

A. As stated in Article 12(2) of the MOU of this case, it is a matter of interpretation of intent to individually determine whether a performance bond paid by a purchaser and its interest accrued if a MOU is rescinded due to a cause attributable to the purchaser’s liability is a penalty agreement or whether damages are scheduled. However, as penalty is presumed to be liquidated damages under Article 398(4) of the Civil Act, special circumstances should be asserted and proved in order to interpret the penalty as a penalty as a penalty for breach of duty (see, e.g., Supreme Court Decisions 2009Da9034, Jul. 9, 2009; 2014Da3115, Mar. 24, 2016). Determination of whether a contractual party’s economic status, details and process of concluding a contract, negotiation process, the negotiation process, purpose of the contractual party’s liquidated damages, and the nature of liquidated damages as a whole at the time of performance of the contractual obligation, other than the amount of penalty for breach of duty, should be reasonably determined.

Meanwhile, the determination of the amount of damages under Article 398 of the Civil Act, in the event of nonperformance, sets the amount of damages to be paid by the obligor in advance. The purpose thereof lies in ensuring the performance of obligations by providing a psychological warning to the obligor in addition to eliminating damages and difficulty in proving the amount of damages, and preventing disputes in a simple manner by preventing legal relations. Therefore, even if the obligor does not actually incur damages or proves that the amount of damages is less than the amount of the estimated amount of damages, the obligor cannot be exempted from paying the estimated amount of damages or may not demand a reduction thereof. Here, the mere fact that “unfairly excessive” where the court may reduce the estimated amount of damages under Article 398(2) of the Civil Act is less than the amount of the estimated amount of damages, regardless of whether there is any economic status, purpose and content of the contract, details of the contractor’s scheduled amount of damages, circumstances leading to the occurrence of unfair pressure on the obligor in the position of the economically weak (see, e.g., Supreme Court Decision 2014Da31515, Apr. 15).

B. Based on its stated reasoning, the lower court determined that the provision on forfeiture of performance bond, etc. under the MOU of this case is reasonable to deem it as a penalty for breach of trust, since there was a mutual agreement between the parties to determine a performance bond as a penalty for breach of trust, for which reduction of performance bond is not allowed, in order to enforce the conclusion of the contract between the parties at the time of conclusion of the MOU of this case, and that the provision on forfeiture of performance bond under the MOU of this case should be deemed as a penalty for breach of trust, and that all or part of the contract cannot be deemed as null and void in light of the general social concept, or contrary to the public order and good morals.

C. (1) However, examining the following circumstances revealed by the reasoning of the lower judgment and the evidence duly admitted by the lower court in light of the legal doctrine as seen earlier, the lower court’s determination is difficult to accept.

① Article 12(2) of the MOU provides that “If the above MOU is cancelled due to reasons attributable to the purchaser, the seller shall be deemed to have accrued the performance bond and its interest.” However, Article 11 provides that “if the MOU is cancelled, the seller or the purchaser shall not demand the other party to the contract (or may demand the other party to compensate for losses or losses or losses) for any other reason other than the exercise of the rights stipulated in this MOU, the Defendants would not be able to know that the above POUU would have been subject to forfeitureUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU............ 2...... 2.

In full view of the above circumstances, the instant performance guarantee ought to be deemed to have the nature of the liquidated damages, and it does not change on the ground that the instant letter of Understanding provides that “the performance guarantee and interest accrued therefrom shall belong to the seller as a penalty for breach of contract.”

(2) Furthermore, according to the reasoning of the lower judgment and the evidence duly admitted by the lower court, the following circumstances are revealed.

① In the case of a workout company, it cannot be excluded from the possibility that the contingent liability unforeseeable at the negotiation stage occurs, or the value of assets is more exaggerated than the actual value of assets. In particular, the company was promoting the acquisition of the company after seven years from the completion of the workout procedure on August 26, 2001. ② The MOU of this case does not state and guarantee the value of assets of the company in question, and only the provision on a simple amount of penalty for breach of contract for buyers exists. ③ As seen earlier, in the draft of the MOU, it was anticipated that the Defendants would enter into the final contract after the completion of the verification process and price adjustment for the company in question at the request of the industrial bank in this case, regardless of the execution of the verification practice in the MOUU, the final contract was not concluded by the seller’s duty to cooperate with the Plaintiff Company under Article 7 of the MOU, which was under the premise of the previous terms and conditions of the contract.

In full view of the above circumstances, even if the primary purpose of which the provision of forfeiture of performance guarantee was made in the MOU of this case was to secure the execution of a final contract, it would be unreasonable to confiscate the total performance guarantee amount up to 315 billion won.

(3) Nevertheless, the lower court determined otherwise. In so determining, the lower court erred by misapprehending the legal doctrine on the estimate of damages and reduction of the estimated amount of damages, thereby adversely affecting the conclusion of the judgment.

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)