A legal relationship in which the contract is rescinded after the construction work has been launched to a considerable extent;

In case of a construction work contract, even if the contract is rescinded and completed, if the construction is considerably advanced and its restoration to its original state seriously incurs social and economic losses, and the completed part is beneficial to the contractor, the contract shall be invalidated only for the completed part, and the contractor shall deliver the building to the contractor, and the contractor shall be obliged to pay reasonable remuneration for the building delivered in consideration of the completed part of the building, etc.

Articles 64, 665, and 673 of the Civil Act

Supreme Court Decision 85Da1751 Decided September 9, 1986 (Gong1986, 1377), Supreme Court Decision 88Da25080 Decided December 26, 1989 (Gong1990, 363), Supreme Court Decision 93Da25080 Decided November 23, 1993 (Gong194, 179), Supreme Court Decision 93Da42320 Decided August 12, 1994 (Gong194, 2285), Supreme Court Decision 94Da18584 Decided November 4, 1994 (Gong194, 3232), Supreme Court Decision 96Da316365 Decided 316, 1965 (Gong196365 decided November 31, 196)

Urban Union Housing Association (Attorney Park Ho-ju, Counsel for defendant-appellant)

Han-jin Housing Co., Ltd. (Attorney Jeong-tae, Counsel for defendant-appellant)

Gwangju High Court Decision 95Na4673 delivered on August 23, 1996

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

We examine the grounds of appeal.

1. On the first ground for appeal

With respect to a construction work contract, even if the contract has been rescinded and completed, if the construction has been completed considerably, and the restoration to its original state has been considerably incurred significant social and economic losses and the completed part is beneficial to the contractor, the contractor is obligated to deliver the building to the contractor as it is invalidated and the contractor is obligated to pay reasonable remuneration for the building delivered in consideration of the height of the building and other factors (see, e.g., Supreme Court Decisions 85Da1751, Sept. 9, 1986; 88Da3247, Dec. 26, 1989; 93Da25080, Nov. 23, 1993; 93Da42320, Aug. 12, 1994; 94Da48584, Nov. 4, 1994).

The lower court determined that, based on its recognized facts as indicated in its reasoning, it appears that the instant construction contract between the Plaintiff and the Defendant appears to have been rescinded as a cause of the Defendant’s nonperformance, and even if not, it is reasonable to deem that the said contract was rescinded by agreement between the Plaintiff and the Defendant at least after the discontinuance of construction works, and therefore, the said contract was null and void. However, the lower court determined that only the Defendant had the right to claim for the costs against the Plaintiff

The purport of the judgment of the court below is that the entire construction contract of this case is not deemed to be retroactively null and void, and only the completed portion is deemed null and void, and there is no error of law by misapprehending the Supreme Court precedents or other legal principles as to the cancellation of the construction contract.

In addition, as seen above, the construction of this case was suspended and only the claim for construction cost for the already completed part remains, and the condition to regard the land of this case as a subsequent return cycle is satisfied. As such, the existence of misapprehension of legal principles as to whether the construction of this case was suspended and its completed part, or whether the whole contract becomes null and void, does not directly affect the conclusion of this case.

Therefore, the argument about this issue is without merit.

2. On the second ground for appeal

For the reasons indicated in its holding, the court below held that the transfer registration of ownership on the surplus land of this case in the name of the defendant was made as part of the payment method for the plaintiff to the defendant, but it was a conditional agreement that was made on the condition that the defendant completed the construction (i.e., where the construction is suspended if the construction is completed in advance, the ownership of the road will be found if the construction is suspended), and that the above surplus land transfer agreement was invalidated as a condition non-performance, as long as the defendant did not complete the construction as above and suspended, the above fact-finding and decision of the court below is just, and there is no error of law as alleged in the grounds for appeal or interpretation of the parties' intent.

In addition, the argument that the transfer registration of ownership on the surplus land of this case is a kind of payment in substitution for the unpaid construction cost even if the defendant suspends the construction work, or that it is a security for the construction cost to be received by the defendant is a tree in different opinion from the original judgment and thus, cannot be accepted

3. Therefore, the appeal is without merit, and the 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 Lee Im-soo (Presiding Justice)