1. The defendant's appeal is all dismissed.

2. The costs of appeal shall be borne by the Defendant.

Purport of claim and appeal

1..

1. The reasoning of the court of first instance’s explanation concerning this case is as follows. Except where the defendant added the judgment as to the newly asserted part of the judgment of the first instance, the reasoning of the court of first instance is as stated in the reasoning of the judgment. Thus, the court of first instance cites this part of the reasoning of the court of first instance pursuant to the main sentence of Article 420 of the Civil Procedure Act.

The part of paragraph (1) and paragraph (4) (1) of the first instance judgment shall be deleted.

The part of the first instance judgment, i.e., “the Plaintiff A paid KRW 16,175,000 on March 29, 2016, as well as KRW 97,049,00,00,” i.e., the last 10th sentence from the 9th sentence of the first instance judgment.

Part 10 through 11 of the first instance judgment shall be deleted.

2. Determination of the attached articles

A. The defendant asserts that even if each of the supply contracts of this case was lawfully rescinded due to the defendant's cause attributable to the defendant, the defendant should reduce the penalty, which is the estimated amount of damages, by taking account of various circumstances, such as the fact that the defendant bears interest on the part of the plaintiffs (50% of the total purchase price).

B. (1) The agreement of penalty for breach of contract is presumed to be an estimate of the amount of damages under Article 398(4) of the Civil Act. According to Article 398(2) of the Civil Act, where the estimated amount of damages is unreasonable, the court may reduce the estimated amount of damages to a reasonable extent.

Here, “unfairly excessive cases” refers to cases where the payment of estimated amount of damages is deemed to result in the loss of fairness by imposing unfair pressure on the debtor in light of the general social norms, considering all circumstances, such as the status of the creditor and the debtor, purpose and content of the contract, the motive scheduled for the amount of damages, the ratio of estimated amount of damages to the debt, the expected amount of damages, transaction practices and economic conditions, etc.

Pursuant to the above provisions, the estimated amount of compensation for damages is unfairly excessive and the scope of reasonable reduction thereof.