A. Whether a penalty for breach of contract can be reduced by analogical application of Article 398(2) of the Civil Act with respect to the estimate of damages (negative)

(b) The case holding that an agreement on penalty for negligence, which stipulates that the lessor shall compensate for the amount equivalent to 10 times the sales commission and the amount equivalent to 10/10 of the omitted sales report, shall not be contrary to the public order and good morals, where the lessee fails to file a sales report in the contract on consignment sales

A. The agreement on penalty for breach of contract is set to secure the performance of an obligation, and its content differs from the scheduled amount of damages, so it cannot be reduced by analogical application of Article 398(2) of the Civil Act regarding the scheduled amount of damages by analogy. However, if the agreed penalty is excessively excessive compared to the interests of creditors resulting from compulsory performance of the obligation, such an agreement is null and void in whole or in part contrary to public order.

(b) The case holding that an agreement on penalty for breach of contract concluded to compensate a lessor for the amount equivalent to ten times the sales commission and the omission of the sales report, where the lessee omits the sales report in the contract on consignment sales store for department stores, shall not be contrary to the public order and good morals;

Articles 398 and 103 of the Civil Act

A. Supreme Court Decision 68Da491 decided Jun. 4, 1968 (No. 16B citizen 115) (Gong165), October 10, 1989 (Gong1989, 1658) 90Da6880 decided Apr. 26, 1991 (Gong191, 1483)

[Judgment of the court below]

Man-su Law Firm, Pacific Law Office, Attorneys Kim In-ap et al., Counsel for the defendant-appellant-appellant-appellee)

Seoul High Court Decision 92Na1553 delivered on September 30, 1992

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

According to the reasoning of the lower judgment, the lower court rejected the Plaintiff’s agreement on the reduction of the total amount of KRW 10 as a penalty surcharge if the agreement was concluded between the Plaintiff and the Defendant company for the omission of the sales amount by the said agreement, and concluded an agreement on the reduction of the sales amount by the lessor’s fee to be paid to the lessee at the end of each month, and thus, it is necessary to ensure the lessor’s accurate statement of sales to secure a certain amount of money out of the sales amount without receiving deposit, monthly rent, management fee, etc. from the lessee. As such, the lower court determined that the agreement on the reduction of the sales amount by the Defendant company’s sales amount was null and void by taking account of the fact that the agreement on the reduction of the sales amount by the Plaintiff’s sales amount was not reached, and that the Plaintiff’s sales amount was no more than KRW 250,500,000,000 for the mere reason that the agreement was concluded by the Plaintiff’s sales agent to obtain the said agreement and thus, it should be deemed that the remaining sales amount of KRW 25,50.

In light of the records, the above fact-finding and judgment of the court below are all acceptable, and there is no error in the misapprehension of the legal principles as to liquidated damages or penalty agreements, such as the theory of lawsuit, and there is no error in the misapprehension of the legal principles as to liquidated damages or penalty agreements. Furthermore, even if the plaintiff was urged to admit the assertion of basic facts for assessing the invalidity of the above agreement on the fifth date for pleading of the court below, the plaintiff continued several times thereafter, but failed to implement it until the date for pleading is terminated, and there is no error in the misapprehension of the legal principles as to the plaintiff's refusal of the right to request a reduction

Therefore, the plaintiff's 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 Choi Jae-ho (Presiding Justice)