1. The facts established by the lower court by citing the first instance judgment are as follows.

A. On August 27, 2007, the Defendant entered into a contract for construction works (hereinafter “the instant contract for construction works”) with the joint supply and supply company consisting of Daedong Co., Ltd. (hereinafter “Sedong Co., Ltd”) on the terms of contract amounting to 33,740,000,000 won for the construction works of the apartment in Daegu-do with respect to the construction works of the five sections for the construction of the apartment in Daegu-do (hereinafter “instant construction works”). The term of completion shall be 1/100 of the contract amount for the construction works (hereinafter “the instant contract for construction works”) and 3,740,000,000 won, October 31, 2009, and November 20, 2009, and 1/1000 of the contract amount for liquidated damages.

B. On the same day, the Plaintiff entered into a performance guarantee contract with the Defendant, the guaranteed creditor, the guaranteed amount of KRW 16,870,000,000, and the guarantee period from August 27, 2007 to November 30, 2009 (hereinafter “instant performance guarantee contract”) and issued the performance bond.

C. On January 23, 2009, the instant construction was suspended following the application for rehabilitation procedures by Dacman for the instant construction work. The instant construction work succeeded to the remaining construction work, but continued to be delayed. On August 17, 2009, the Defendant filed a claim against the Plaintiff for the repayment of the guaranteed liability. At the time, the construction period was 263 days in preparation for the rate of progress (44.07%).

D. On October 6, 2009, the Plaintiff entered into a guarantee construction consignment agreement with the first type of construction business chain and continued the instant construction upon the Defendant’s approval. Upon the Plaintiff’s application for extension of the construction period, the Defendant extended only 30 days, and the completion date of the instant construction was set on November 30, 2009 (construction, machinery) and December 20, 209 (Civil Works).

E. On May 7, 2010, the Plaintiff completed each civil engineering work on May 13, 2010, and filed a claim for completion payment with the Defendant. The Defendant paid only the remainder after deducting KRW 5,660,271,016 from the penalty for delay and the penalty KRW 261,00,000 due to non-compliance with the date of the interim process management.

2. According to the reasoning of the judgment of the court below and the judgment of the court of first instance as cited by the court below, the court below rejected the defendant's assertion that, with respect to the defendant's assertion that the payment of the compensation for delay and penalty must be deducted from the payment of the plaintiff's claim, since the payment of the compensation for delay and the compensation for delay should have been borne due to the failure to comply with the scheduled completion period of the construction works of this case, shall be included in the scope of the plaintiff's guarantee. In the case where the guarantee agency of the performance bond selects the performance of contractual obligations, the legal principles of the joint and several surety guarantor system, and the legal principles of the contract bond system shall apply in the case where the plaintiff selects the performance of the construction works to be completed, so long as the plaintiff selects the performance of the construction works to be completed, there is no obligation to pay the agreed amount of the compensation for delay or penalty under the main contract, and the compensation for delay as stipulated in Article 9 of

3. However, we cannot accept the judgment of the court below for the following reasons.

Article 56 (2) 3 of the former Enforcement Decree of the Framework Act on the Construction Industry (amended by Presidential Decree No. 20488, Dec. 28, 2007) provides that "performance bond" shall include "in the event a partner fails to perform contractual obligations of a contracted construction work, to guarantee the partner to pay a certain amount if he/she fails to perform the contractual obligations of the contracted construction work on behalf of the partner, or to perform such contractual obligations on behalf of the partner." According to the terms and conditions of guarantee of this case, if the contractor fails to perform contractual obligations, the Plaintiff shall perform the contractual obligations instead of the other party or to pay the relevant deposit (guarantee Obligations) in accordance with the terms and conditions as stated in the letter of guarantee: Provided, That the warranty obligation and the obligation to return the deposit received by the debtor from the guarantee creditor are not included in the guarantee obligation (Article 1). In principle, the obligation to pay the guarantee obligation by designating a third party (guaranteed company) where a guarantee accident occurs due to a cause attributable to the debtor, and if it is impossible to perform the guaranteed construction, the guarantee obligation may be paid (Article 3).

Therefore, in the event that the plaintiff selects the performance guarantee, the obligation of the debtor under the contract for performance on behalf of the plaintiff is "the obligation to complete the construction within the agreed period". According to the guarantee clause of this case, the plaintiff shall commence the performance of the performance guarantee within 30 days from the date on which a written claim for performance of the performance guarantee was received by the guarantee creditor (Article 6). In the event that the plaintiff performs the performance guarantee as such, the guarantee creditor shall not impose a penalty for delay equivalent to the period from the date on which a written claim for performance of the performance of the guarantee obligation was received to the date on which the performance of the guarantee obligation was commenced (Article 9), the guarantee creditor shall not impose a penalty for delay equivalent to the period from the date on which the contract was received to the date on which the performance of the guarantee obligation was commenced (Article 9), the debtor shall not commence the construction without any special reason, or the construction is delayed for a considerable period of time after the contract was concluded, and the progress is less than 80/100 of the scheduled progress rate without delay.

In this case, the fact that the Plaintiff completed construction with the deadline for completion approved by the Defendant at the time of performance guarantee was recognized as above. Therefore, barring any special circumstance in light of the legal principles as seen earlier, the Plaintiff is liable to pay liability, such as liquidated damages, etc. for delay of the instant construction. Therefore, the lower court erred by misapprehending the legal principles as to the interpretation of the scope of performance bond, and the allegation in the grounds of appeal pointing this out is with merit.

4. 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 Lee In-bok (Presiding Justice)