On March 23, 2018, the Plaintiffs sold to the Defendant the amount of KRW 2.1 billion, namely, D, E, F, G, H, and I forests owned by the Plaintiffs.

The Defendant paid the Plaintiffs a down payment of KRW 15 billion on the date of the contract, and the balance of KRW 2 billion on October 23, 2018, and agreed to pay KRW 200,000,000 when cancelling the contract.

The defendant did not pay any balance to the plaintiffs even after October 23, 2018.

On October 30, 2018, the Plaintiffs notified the Defendant that all the documents necessary for the registration of transfer of ownership should be entrusted to a certified judicial scrivener office, and notified the Defendant that the sales contract will be automatically cancelled if the remainder is not paid by November 10, 2018.

[Grounds for recognition] In light of the facts without dispute, Gap evidence Nos. 1, 2, and 3, and the facts of recognition as above, the above sales contract was lawfully rescinded by the defendant's declaration of intent of rescission due to the defendant's default. Thus, the defendant is obligated to pay the plaintiffs a penalty of 200,000,000 won.

The defendant asserts that the amount of penalty is excessively excessive.

Since an agreement on penalty for breach of contract is determined to secure the performance of an obligation and is different from the scheduled amount of compensation, the amount may not be reduced by analogical application of Article 398(2) of the Civil Act regarding the scheduled amount of compensation for breach of contract. However, if the agreed penalty is excessively excessive compared to the interests of creditors who forced the obligation, all or part of the agreed penalty would be null and void against the public order and good morals.

However, the court's intervention in the specific contents of the contract to invalidate all or part of the agreement on the ground that the amount of the penalty agreed by the parties is excessive may be a serious limitation on the principle of private autonomy, and the party who wishes to leave from the binding force of the contract by failing to implement the agreement himself/herself.