[1] Whether the contract performance guarantee and compensation for delay under the contract can be deemed as penalty for breach of contract only if the contract performance guarantee and compensation for delay are stipulated (negative)

[2] The meaning of "in cases where the estimated amount of damages under Article 398 (2) of the Civil Code is unreasonably excessive," and the method of determining such amount

[1] Where a contract is terminated due to a cause attributable to the contractor under the contract agreement and the terms and conditions incorporated into the contract, whether the contract bond belongs to the contractor shall be determined individually in a specific case by comprehensively taking into account the contract agreement and the above contract terms and conditions. Penalty is presumed to be an estimate of damages under Article 398(4) of the Civil Code, and special circumstances should be asserted and presented to interpret the penalty as a penalty for breach of contract, and it is difficult to regard the contract bond as a penalty for breach of contract solely on the ground that the contract bond belongs to the contractor.

[2] According to Article 398 (2) of the Civil Code, where the estimated amount of compensation for damage is unreasonably excessive, the court may reduce it to a reasonable extent. Here, "unfairly excessive case" means a case where the payment of the estimated amount of compensation for damage is deemed to result in the loss of fairness by imposing unfair pressure on the debtor who is in the position of the economically weak in light of the general social concept, taking into account all the circumstances such as the status of the creditor and the debtor, the purpose and content of the contract, the motive scheduled for the amount of compensation, the estimated amount of compensation for damage, the ratio of the estimated amount of compensation to the amount of debt, the estimated amount of damage, the size of the estimated amount of damage, and the transaction practices at the time. Meanwhile, in determining whether the estimated amount of compensation for damage is unreasonably excessive or the scope of reasonable reduction is to be determined specifically, the court shall take into account all the above circumstances that occurred between them as of the time of the closing

[1] Articles 105, 398(1) and (4) of the Civil Act / [2] Article 398(1) and (2) of the Civil Act

[1] Supreme Court Decision 95Da11436 delivered on April 26, 1996 (Gong1996Sang, 1683), Supreme Court Decision 97Da21932 delivered on October 28, 1997 (Gong1997Ha, 3626), Supreme Court Decision 97Da2409 delivered on April 27, 199 (Gong1999Ha, 1329) / [2] Supreme Court Decision 92Da41719 delivered on April 23, 1993 (Gong1993Ha, 1528), Supreme Court Decision 95Da42393 delivered on February 27, 196 (Gong196Sang, 197Da3979 delivered on April 197, 195 (Gong1997Da979497 delivered on June 197, 197).

Korea Guarantee Insurance Corporation

Samsung Heavy Industries Co., Ltd. (Attorney Yoon Yong-han, Counsel for defendant-appellant)

Defendant

Daegu District Court Decision 98Na7443 delivered on May 17, 2000

All appeals are dismissed. The costs of appeal are assessed against each party who filed the appeal.

1. As to the defendant's appeal

The defendant did not state any grounds of appeal in the petition of appeal and did not submit any grounds of appeal within the submission period of the appellate brief.

2. We examine the Plaintiff’s Intervenor’s grounds of appeal.

A. As to the first ground for appeal

If the contract is terminated due to a cause attributable to the contractor included in the contract agreement and the terms and conditions of the contract, whether the contract bond belongs to the contractor is scheduled to pay damages or not shall be determined individually in a specific case by considering the contract agreement and the above terms and conditions. Since the penalty for breach is presumed to be an estimate of damages under Article 398(4) of the Civil Act, special circumstances should be asserted and presented to interpret the penalty as a penalty for breach of contract. Thus, it is difficult to regard the contract bond of this case as a penalty for breach of contract only on the ground that the subcontract agreement between the Samsung Heavy Industries Co., Ltd. and the non-party order Co., Ltd. is stipulated in addition to the contract bond. This case's precedent pointing out in the grounds of appeal is inappropriate to be invoked in this case. Accordingly, the judgment of the court below that the contract bond of this case is scheduled to pay damages, as otherwise alleged in the grounds of appeal, is justifiable, and there is no violation of the precedents or the misapprehension of the legal principles as to the estimate of damages and the classification of penalty for breach of contract.

B. On the second ground for appeal

According to Article 398(2) of the Civil Act, where the estimated amount of compensation for damages is unreasonably excessive, the court may reduce it to an extent reasonable. Here, "unfairly excessive case" means cases where the payment of the estimated amount of compensation for damages is deemed to result in the loss of fairness by imposing unfair pressure on the debtor in the position of the economically weak in light of the general social concept, taking into account all the circumstances such as the status of the creditor and the debtor, the purpose and content of the contract, the motive behind the liquidated amount of compensation for damages, the ratio of the estimated amount of damages to the amount of debts, the estimated amount of damages, the estimated amount of damages, and the current transaction practices, etc. In addition, in order to determine whether the estimated amount of compensation for damages is unreasonably excessive or to determine whether the estimated amount of compensation for damages is unfairly excessive or the scope of reasonable reduction is to be comprehensively considered (see Supreme Court Decision 98Da45546, Apr. 23, 199).

Examining the reasoning of the judgment below in light of the records, the court below determined that the contract bond (20% of the total construction amount) of this case was unfairly excessive as the liquidated damages amount, and it is just to take measures to reduce it to 47,870,130 won, which is 10% of the total construction amount, in consideration of the various circumstances shown in the argument of this case, such as the fact that the payment period has been extended at the request of the intervenor who is a large enterprise and the non-party 1 corporation (hereinafter referred to as the "non-party 1 corporation")'s financing increase due to the extension of the payment period, the non-party 1 corporation's commercial machinery was manufactured, the non-party 1 corporation was completed through the non-party 1 corporation's commercial construction industry through the non-party 1 corporation, and the fact that the construction of the steel structure was completed through the non-party 2 corporation through the non-party 1 corporation. The grounds for appeal as to this cannot be accepted.

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party who filed the appeal. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Son Ji-yol (Presiding Justice)