1. If one of the parties to a contract fails to perform his/her obligation, the other party may rescind the contract with a reasonable period fixed and notified to perform the obligation, and if he/she fails to perform the obligation within the reasonable period, barring any special circumstance (see Supreme Court Decision 70Da1342, 1343, Feb. 23, 1971). Meanwhile, in rescinding the contract on the grounds of delay of performance, the peremptory notice of performance, which is a prerequisite for the premise, does not necessarily have to be given by specifying a certain period in advance, and the right of rescission shall take place after a reasonable period has elapsed from the time of peremptory notice. If the obligee has notified the obligor of his/her intention to cancel the contract because he/she did not perform his/her obligation, it may be deemed that there was the peremptory notice of performance. However, the contract may not be rescinded unless a reasonable period has elapsed thereafter (see Supreme Court Decision 94Da35930, Nov.

2. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following facts.

A. On October 17, 2012, the Plaintiff leased the instant apartment from the Defendant KRW 110,000,000,000, and around that time, paid the down payment of KRW 11,00,000 to the Defendant. The Plaintiff agreed with the Defendant to pay the remainder KRW 99,00,000 to the Defendant until December 27, 2012.

B. On the apartment of this case, the establishment registration of a mortgage was completed over KRW 190,800,000 with the maximum debt amount as a mortgagee. The Defendant agreed with the Plaintiff and the Defendant, prior to the payment of the remainder, to take measures to reduce the part of the maximum debt amount regarding the establishment registration of a mortgage at a level that guarantees the actual maximum debt amount of KRW 147,00,000 (hereinafter referred to as “special agreement”). On December 27, 2012, the remaining payment date of the remainder, the Plaintiff confirmed that the part of the maximum debt amount regarding the establishment registration of a mortgage of this case was not reduced as stipulated in the special agreement, and then notified the Defendant that the lease of this case was rescinded on the ground that the Defendant did not perform the obligation as stipulated in the special agreement.

D. On the same day, the Defendant paid KRW 64,200,00 for the expenses incurred in reducing the maximum debt amount of the registration of the establishment of a neighboring mortgage at the Dong-dong Branch of the Japan Bank. Accordingly, on December 28, 2012, the registration of alteration was completed according to the terms of the special agreement.

3. Examining the foregoing facts in light of the legal principles as seen earlier, the Plaintiff’s notice of cancellation on December 27, 2012 was given on the ground that the Defendant delayed the performance of obligations stipulated in the special agreement clause, and thus, cannot be deemed as a lawful declaration of intent of cancellation due to the lack of a peremptory notice of performance, which is a prerequisite for the premise.

Furthermore, the Plaintiff’s notice of rescission can be deemed as effective as the peremptory notice for performance. However, it is reasonable to deem that the Defendant’s performance of the obligation stipulated in the special agreement on December 28, 2012, which is sufficient date to view it as being within a reasonable period from the Defendant, as the Plaintiff cannot rescind the instant lease agreement for the said reasons.

Nevertheless, the lower court acknowledged that the instant lease agreement was lawfully rescinded due to the Plaintiff’s notice of cancellation on December 27, 2012, and accepted the Plaintiff’s claim for the return of down payment. In so doing, the lower court erred by misapprehending the legal doctrine regarding the determination contrary to the precedents of the competent court under Article 3 subparag. 2 of the Trial of Small Claims Act. The allegation in the grounds of appeal on this point is with merit.

4. Therefore, 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 Min Il-young

Justices Kim Jae-han