In a case where Company A and Company B agreed to remove facilities located in the store for the interior work of Company B upon entering into a lease agreement on the store, the case holding that Company B’s obligations cannot be revoked on the grounds of nonperformance on the grounds that the obligation under the lease agreement was an incidental obligation under the lease agreement.

In a case where Company A and Company B agreed to remove facilities located in the store for the interior work of Company B upon entering into a lease agreement on the store, the case holding that Company B cannot cancel the lease agreement on the ground of nonperformance merely because it is an incidental duty under the lease agreement, inasmuch as Party B and Company B agreed to complete the removal and deliver the facilities as soon as the original delivery date is earlier than the original delivery date.

Article 544 of the Civil Act

Plaintiff

Freeboard Housing Development Corporation

Ulsan District Court Decision 2012Gau89538 decided May 14, 2013

October 30, 2013

1. Revocation of the first instance judgment.

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 5 million won with 20% interest per annum from the day following the delivery date of a copy of the complaint to the day of complete payment.

2. Purport of appeal

The same shall apply to the order.

1. Determination on the cause of the claim

A. Summary of the plaintiff's assertion

On October 8, 2011, the Plaintiff leased a store from the Defendant to operate the Buddhist Products Exhibition Center, and paid 5 million won down payment. For the Plaintiff’s interior work, the Plaintiff and the Defendant agreed to remove all the facilities located in the store until October 18, 2012, which were initially agreed upon by the Defendant, for the purpose of the Plaintiff’s interior work, until October 15, 2012, and to compensate the Plaintiff for the Plaintiff’s damages. However, the Defendant did not remove the facilities until October 18, 2012. Although the Plaintiff notified the Defendant of the performance of the said duties by October 26, 2012, the Plaintiff was unable to commence its business any longer because the Plaintiff did not comply therewith. Accordingly, the Plaintiff claimed for the cancellation of the lease contract and the payment of damages for delay as part of the property and mental and physical damages caused by nonperformance, as well as for the payment of damages for delay.

B. Determination

The delivery date of a store under the lease contract is November 15, 2012, and the contract deposit is agreed to be deemed as the basis for compensation for damages, the fact that the Plaintiff paid the Defendant the down payment of KRW 5 million on the date of conclusion of the lease contract, and the fact that the Defendant removed the facilities of the store on November 11, 2011 does not conflict between the parties, or that it is recognized in full view of the purport of the entire pleadings in the statement in Gap evidence 1.

In order to cancel a contract for reasons of non-performance under Article 544 of the Civil Act, the contract shall be rescinded unless the purpose of the contract is deemed unnecessary to achieve the purpose of the contract, and if the purpose of the contract is not fulfilled, and the creditor is merely deemed not to have concluded the contract. In addition, in distinguishing between the principal and incidental obligations among contractual obligations, regardless of the independent value of payment, the contract shall be rescinded by the reasonable will of the party expressed in the conclusion of the contract regardless of the independent value of payment, or objectively clearly expressed in the situation at the time of the contract, and such various circumstances as the content, purpose, result of non-performance, etc. shall be considered (see, e.g., Supreme Court Decisions 97Ma575, Apr. 7, 1997; 2001Da20394, Nov. 13, 2001).

Therefore, as to whether the Plaintiff could cancel the lease agreement on November 11, 201, the following circumstances are determined as follows: ① the delivery date of the store under the initial lease agreement as “15 November 15, 201,” and the Plaintiff’s request that “the delivery date of the store is earlier than the delivery date stipulated in the contract for interior works,” and that “the delivery date of the store is earlier than the delivery date stipulated in the contract for interior works ( October 8, 201),” which is the first 10-day term “the delivery date of the building is earlier than the delivery date stipulated in the contract for interior works,” and the Defendant’s request that “the delivery date of the building is more than the delivery date stipulated in the first 10-day term “the delivery date of the building is more than the delivery date stipulated in the first 10-day term “the delivery date of the building is more than the delivery date stipulated in the lease agreement.”

Inasmuch as there is no evidence to prove that the Defendant could not achieve the purpose of the lease agreement by delaying the performance of the above incidental obligations, or that the Defendant would be able to rescind the lease agreement of this case, the Plaintiff’s assertion based on a different premise cannot be accepted. Rather, according to the evidence submitted by the court below, the Defendant rescinded the lease agreement on the ground of the Plaintiff’s nonperformance of obligations on November 15, 201, where the Plaintiff did not pay the remainder deposit of KRW 45 million until November 15, 201, which is the date of delivery of the agreement (i.e., the date of delivery of the agreement (=50 million won - five million won), and the down payment paid by the Plaintiff is deemed to have been reverted to the Defendant pursuant to the penalty agreement.

2. Conclusion

The plaintiff's claim of this case shall be dismissed due to the lack of any ground, and since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the judgment of the court of first instance is revoked

Judge Seo Chuncheon (Presiding Judge)