1. The term "guarantee insurance" means non-life insurance, the insurer takes over the coverage of the loss that the insured (beneficiary under a principal contract) will incur due to a policyholder's default on an obligation under a certain legal relationship with the insured. The formally aims at the same effect as a guarantee contract with the nature of the obligor's default on an obligation as an insurance contract or in substance, which covers the obligor's default on an obligation as an insured event (see Supreme Court Decision 2004Da20265, Dec. 24, 2004, etc.). In the case of a performance guarantee insurance, the provision on guarantee under the Civil Act is applicable mutatis mutandis (see, e.g., Supreme Court Decision 2004Da20265, Dec. 24, 2004). Thus, in the case of a performance guarantee insurance, the insured is ordinarily to perform the obligation under a contract entered into or already entered into with the guaranteed insurance contract, and thus, it is necessary to protect the insurer's trust if the insurer becomes able to have a new interest by trust (see, etc.

In addition, performance guarantee insurance is not only a type of non-life insurance for others stipulated in Article 639 of the Commercial Act, but also a contract for a third party stipulated in Article 539 of the Civil Act. As such, after the rights of the third party have occurred, the parties to the guarantee insurance contract may not modify or terminate their rights pursuant to Article 541 of the Civil Act. Meanwhile, Article 649(1) of the Commercial Act provides that "in case of non-life insurance for others, a policyholder shall not cancel the guarantee insurance contract without obtaining the consent of the insured or without carrying the insurance policy even before the occurrence of the insurance accident." Article 663 of the Commercial Act provides that it shall not be changed to the disadvantage of the policyholder, the insured, or the beneficiary by a special agreement

2. According to the reasoning of the judgment below and the records, the defendant, on October 19, 2006, issued a performance guarantee insurance contract with the defendant, with the insurance coverage of 10 million won, and with the insurance coverage of 10 million won, and with the insurance coverage period of 20 million won from October 19, 2006 to October 18, 2007, with the insurance coverage of 40 billion won, to compensate the plaintiff for losses arising from failure to perform his/her obligations under the above performance guarantee insurance contract with the insurance coverage period of 0.0 billion won. Article 1 of the common terms and conditions applicable to the instant guarantee insurance contract provides that the defendant, who is the debtor, shall provide the defendant with the performance guarantee insurance contract with the insurance coverage of 0 billion won within the scope of 00 billion won, and that the defendant shall also be liable for damages arising from the non-performance of obligations under the above performance guarantee insurance contract with the insurance coverage period of 20 billion won within the same insurance period of time as the renewed insurance contract of 9.

In light of the above legal principles, the Plaintiff already acquired the right to claim for the guaranteed insurance under the instant guaranteed insurance contract within 90 days from the date following the expiration date of the insurance period ( October 18, 2007) pursuant to the instant guaranteed insurance contract, where there was a default on the part of the insured, who is a policyholder, within 90 days from the expiration date of the relevant guaranteed insurance contract, and actually received the guaranteed insurance contract, and thereby has a new interest by trusting the function of the secured claim of the guaranteed insurance contract, such as the performance of the obligations under the said contract, by concluding a new guaranteed insurance contract and performing the obligations under the said contract. Thus, the instant renewed contract can be deemed null and void as it goes against the provisions of the Commercial Act and the Civil Act, since the contract was concluded at will since it was concluded with the policyholder and the insurance company without the consent of the insured, solely on the ground that the renewal contract was concluded with the insurance company.

The court below held that the special contract for renewal of this case was null and void in some different statements of its reasoning, and ruled that the liability for the payment of insurance proceeds under the guarantee insurance contract of this case was extinguished by the special contract for renewal of this case, or rejected all the defendant's assertion that the plaintiff impliedly accepted the contract for renewal of this case and accepted the plaintiff's claim for insurance proceeds under the guarantee insurance contract of this case. In so doing, the court below's conclusion is just, and there is no error of law by misunderstanding legal principles as to the validity of the renewal special contract

3. Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)