[1] The case affirming the judgment below which held that the contractor's nature of the contract performance bond paid to the contractor as liquidated damages

[2] Criteria for determining whether the estimated amount of damages is excessive

[1] The case affirming the judgment of the court below which held the nature of the contractor's performance bond paid to the contractor as the liquidated damages under Article 398 of the Civil Code

[2] Whether an estimate of the amount of damages is unreasonably excessive shall be determined based on whether the amount of damages exceeds the scope that ordinary people can gain by taking into account all the circumstances, such as the parties to the contract, the purpose and contents of the contract, the motive behind liquidated damages, the actual damages and the estimated amount thereof, the comparison of the actual damages and the estimated amount thereof, transaction practices and economic conditions at the time.

[1] Article 398 of the Civil Code / [2] Article 398 of the Civil Code

[2] Supreme Court Decision 92Da41719 delivered on April 23, 1993 (Gong1993Ha, 1528), Supreme Court Decision 94Da10061 delivered on March 24, 1995 (Gong1995Sang, 1713), Supreme Court Decision 95Da33658 delivered on November 10, 1995 (Gong195Ha, 3912)

Gyeongnam Community Promotion Training Institute (Gu Gyeongnam Community Training Institute, Attorneys Kim Young-gu, et al., Counsel for the plaintiff-appellant)

Construction Financial Cooperative (Attorney Kim Jong-sik, Counsel for the plaintiff-appellant)

Masung Industrial Co., Ltd. (Gu: Hotop Co., Ltd.) (Attorney Kim Jong-sik, Counsel for the plaintiff-appellant)

Busan High Court Decision 94Na5991 delivered on May 25, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. Summary of the judgment below

The court below decided on December 28, 192 that the above contract amount was 5,92 won for construction works between the intervenor and the above intervenor (hereinafter referred to as "the above contract amount of construction works") and 1,50,000 won for the above construction works. The contract amount of 1,50,000 won is 7,285 won for the construction works owned by the plaintiff, and 3,024,50,000 won for the construction works are to be paid within 20 days after completion of the contract amount, but the above contract amount was 10,000 won for the above construction works. The contract amount was 10,000 won for the above construction works and 20,000 won for the above construction works, and the contract amount was 10,000 won for the above construction works and 200,000 won for the above construction works. The appraisal price of the above construction works was 20,000 won for the reasons for the cancellation of the contract amount.

2. We examine the first ground for appeal by an attorney 1.

According to the contract agreement between the plaintiff and the intervenor who are the contractor, when the contract is terminated or terminated due to the reasons attributable to the contractor, the contract shall be deemed to belong to the contractor, and there is no agreement that the contract may claim damages for all actual damages separately from the above contract deposit, or claim damages for the difference between the actual damages and the contract deposit. In case where the contract amount due to the contractor's default falls under the amount equivalent to the contract deposit, the contract owner shall cancel the contract concerned unless there is any special reason, and the contract owner shall vest in the contract owner with the contract deposit. Thus, the purpose of the contract agreement between the plaintiff and the intervenor is to enforce psychological pressure of the contractor and enforce the performance of the contract in preparation for the time of the contractor's default of the contract, and at the same time, the contractor shall pay the contract deposit to the contractor in advance at the time of conclusion of the contract in order to secure the payment. Therefore, the court below did not err in the misapprehension of legal principles as to the contract guarantee or the contract guarantee under the Construction Guarantee Act.

3. We examine the grounds of appeal by attorney 2 and the grounds of appeal by attorney 1.

The determination of whether the estimated amount of damages is unreasonably excessive shall be made based on whether the amount exceeds the extent that the general public can understand, taking into account all the circumstances, such as the parties to the contract, the purpose and contents of the contract, the motive of scheduled amount of damages, the actual damages and the estimated amount of damages, the comparison of transaction practices at the time of the contract, and the economic conditions, etc. (see, e.g., Supreme Court Decisions 90Da14478, Mar. 27, 1991; 92Da41719, Apr. 23, 1993; 94Da10061, Mar. 24, 1995; 94Da1061, Mar. 24, 1995; 200 won of the contract of this case; 400,000 won of the contract of this case; and 300,000 won of the contract of this case, the court below's determination of the court below is justified and there are no errors in the misapprehension of legal principles.

4. 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 Jeong Jong-ho (Presiding Justice)