[1] The validity of a standardized contract clause excluding the obligation to return interest where an enterpriser returns the money already received due to the cancellation of a contract (=in principle invalid)

[2] In a case where the validity of the sales contract clause that provides that the buyer does not refund interest on the price already paid, the case affirming the judgment below that the above provision is null and void in principle as it violates Article 9 subparagraph 4 of the former Regulation of Standardized Contracts Act, and it is also identical to the party's perception that the buyer does not collect and confiscate the down payment which is confiscated as a penalty after returning it to the other party, but without returning it after returning it to the other party. In light of the fact that the party's perception is also the same as the ordinary transaction situation, it cannot be deemed that the part of the exemption clause for interest refund result in unfairly reducing the enterpriser's duty

[1] Article 9 subparag. 4 of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010); Article 548(2) of the Civil Act / [2] Article 9 subparag. 4 (see current Article 9 subparag. 5) of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010); Articles 398(4), 548(2), and 565 of the Civil Act

[1] Supreme Court Decision 2008Da75393 Decided December 24, 2008 Supreme Court Decision 2010Da21849 Decided April 12, 2012

Plaintiff (Counterclaim Defendant) (Law Firm Hanjin, Attorneys Jeon Soo-soo et al., Counsel for the plaintiff-appellant)

anti-do Comprehensive Construction (Law Firm Apex, Attorneys Park Gi-ju et al., Counsel for the plaintiff-appellant)

Incheon District Court Decision 2013Na22058, 22065 Decided June 27, 2014

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined.

1. As to the ground of appeal on the validity of the exemption clause for the refund of interest on penalty

A. Article 9 of the former Regulation of Standardized Contracts Act (amended by Act No. 10169, Mar. 22, 2010; hereinafter “former Regulation of Standardized Contracts Act”) provides that “any of the terms and conditions that provide for the cancellation or termination of a contract that falls under any of the following subparagraphs shall be null and void.” Subparagraph 4 of Article 548 provides that “any of the terms and conditions that unreasonably reduces the obligation to restore the business entity due to the cancellation or termination of the contract or the obligation to compensate for damages.” In the event a sales contract is terminated, when the sales price that a business entity receives as the performance of the duty to reinstate is returned, the business entity shall pay an additional interest along with legal interest from the date of receipt pursuant to Article 548(2) of the Civil Act. Therefore, the terms and conditions excluding the obligation to return interest in a case where the business entity returns money already received due to the cancellation of the contract are presumed to be unfairly unfavorable to the customer, and thus, shall be deemed null and void unless there are reasonable grounds to justify it (see, Supreme Court Decision 2008Da41214.

B. On the grounds indicated in its reasoning, the lower court determined that the proviso of Article 4(3) of the instant sales contract, which provides that interest on the price already paid by the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) shall not be returned, is null and void in principle as it violates the provisions of Article 9 subparag. 4 of the former Terms and Conditions Regulation Act, and thus, is null and void in principle. However, in the case of the down payment confiscated as a penalty, it is not returned to the other party and confiscated without return, but it is the same as the recognition of the parties in general transaction circumstances, and the fact that the Fair Trade Commission provides that other apartment sales contract in the apartment standard supply contract and the Cheongbu District shall be returned with interest added only to the remainder after deducting the penalty, in light of the fact that the payment obligation of the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) is excluded from the obligation of payment of the said interest exemption clause, it cannot be deemed null and void.

C. Examining the reasoning of the lower judgment in light of the record, the lower court’s aforementioned determination is justifiable as it is based on the legal doctrine as seen earlier. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the time when the penalty is reverted

2. As to the ground of appeal on the validity of the burden clause, such as management expenses and property tax

A. The court below acknowledged that Article 2 (2) of the sales contract of this case provides that where a purchaser of this case receives a loan from a financial institution for the allotment price on behalf of the purchaser in violation of the obligation to repay the loan, and then the purchaser requests the performance on behalf of the purchaser in violation of the obligation to repay the loan, the purchaser may claim taxes and public charges under Article 10 and management expenses, etc. under Article 16 (3) separate from penalty where the sales contract is cancelled as long as the loan transaction is not normal within the designated period even though the purchaser notifies the purchaser of the performance of the obligation to repay the loan, and that Article 10 of the sales contract of this case provides that the purchaser shall bear the expenses for the sales contract and public charges under Article 10 and the property tax under Article 16 (3), regardless of the existence of the remainder payment or transfer of ownership after the initial date of the designation period of occupancy. Article 16 (3) of the same Act provides that the purchaser shall not be obliged to pay the total amount of the sales contract of this case on the grounds of its stated reasoning.

B. Examining the reasoning of the judgment below in light of the relevant legal principles and records, the part which was somewhat inappropriate at the time of the judgment below's explanation (it is reasonable to interpret Articles 10 and 16 (3) of the sales contract of this case as imposing upon the buyer the property tax and other taxes incurred before the expiration date of the occupancy period, in full view of all the circumstances, just as management expenses are imposed on the buyer, as well as the taxes and the public charges incurred after the expiration date of the occupancy period. However, the conclusion to reject each of the above arguments by the plaintiff is justifiable, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the interpretation of Articles 8 and 9 (4) of the former Terms and Conditions Regulation Act.

3. Conclusion

Therefore, the appeal is dismissed, 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.

Justices Kim Chang-suk (Presiding Justice)