[1] Criteria for determining whether a contractor is responsible for repairing defects

[2] Whether the obligation of the contractor to pay the contract price in simultaneous performance relationship with the contractor's defect repair obligation is limited to the amount of the contract price for the part where the defect in question occurred (negative)

[3] Whether it constitutes an abuse of rights where a right to defense of simultaneous performance is exercised as a means to avoid the performance of one's own obligations (affirmative)

[4] The case holding that the scope of the contract price of the work is limited to the amount corresponding to the defect and damage, which a contractor may defend simultaneous performance by exercising the right to claim the repair of defects

[5] Whether a supplier may refuse performance in a continuous transaction where, although the supplier had performed his/her obligation prior to performance, he/she was not paid the price for the preceding time when the due date has expired, or the other party’s obligation to the subsequent performance has not yet been due, but there is a very unstable reason for the fulfillment of the due date (affirmative)

[1] The contractor's liability for repairing defects is also established for the part completed before the completion of the contract. The part completed before the completion of the contract refers to the condition where the work of the part where the defect was completed although the whole date was not completed under the contract, and where the contractor claims the repair of defects, the court shall specify the type and degree of the defect to be repaired, and deliberate on the appropriate method of repairing the defect and the cost necessary for repairing the defect, and determine whether the contractor may be held liable for repairing the defect by considering whether the defect is important or not, even if the defect is not important.

[2] Even where the contract price is agreed to be paid in installments based on the work price, unless there are special circumstances, the obligation to pay the construction price in simultaneous performance relationship with the defect repair obligation is not limited to the amount of the work price for the part where the defect occurred. If we look otherwise, the obligation of the contractor to pay the work price for the part where the defect occurred, which is the part where the defect occurred, shall not be limited to the amount of the work price for the work, and if a defect is found later and later later, the right to defense of simultaneous performance shall not

[3] In a case where the relationship of simultaneous performance is generally acknowledged, if the other party of the person who exercises the right of defense requires excessive expenses to perform the obligation of simultaneous performance, or the performance of the obligation is practically difficult, while the benefit gained by the person who has the right of defense as a result of the performance of the obligation is not so large that the exercise of the right of defense is a means to avoid only the performance of the obligation, the exercise of the right of defense should be excluded as an abuse of right.

[4] The case holding that in a case where the defect repair cost is very small compared to the unpaid construction cost and it is unclear whether the construction cost will be paid even after the completion of the defect repair work, the scope of the original construction cost for which the contractor may exercise the right to claim the defect repair and limit it to the amount corresponding to the defect and the damage is consistent with the principle of fairness and good faith

[5] In a continuous transaction, where the supplier agreed to receive the payment after settling the transaction price at a certain period after the supply of goods or services first, the supplier was not paid the price for the preceding period during which the obligation of the prior performance was completed and the settlement was completed, or where the other party’s obligation of the subsequent performance was not yet due, but the performance of the due date is considerably unstable, in light of the principle of good faith and good faith, the supplier may refuse to pay the price for the preceding period until the due date is already due or the other party’s cause for non-performance of the obligation is resolved.

[1] Article 667 of the Civil Act / [2] Articles 536 and 667 of the Civil Act / [3] Articles 2 and 536 of the Civil Act / [4] Articles 2 and 536 of the Civil Act / [5] Articles 2 and 536 (2) of the Civil Act

[1] [4] Supreme Court Decision 91Da33056 delivered on December 10, 1991 (Gong1992, 490) / [2] Supreme Court Decision 91Da33056 delivered on December 10, 1991 (Gong1992, 490), Supreme Court Decision 96Da7250, 7267 delivered on July 12, 1996 (Gong1996Ha, 2480), Supreme Court Decision 2001Da21632, 21649 delivered on June 15, 201 (Gong201Ha, 1606) / [3] Supreme Court Decision 91Da2972 delivered on April 28, 1992 (Gong1997Da39849 delivered on May 195, 195) / [3] Supreme Court Decision 97Da19849 delivered on May 1985

Young-si Industry Co., Ltd. (Seng General Law Firm, Attorneys Kang Hong-ju et al., Counsel for the plaintiff-appellant)

Ywon Co., Ltd. (Attorney Shin Sung-sung, Counsel for defendant-appellant)

Seoul High Court Decision 96Na42743 delivered on December 21, 2000

The part of the judgment of the court below against the plaintiff is reversed, and that part of the case is remanded to the Seoul High Court. The defendant's appeal is dismissed. The litigation cost incurred by the defendant's appeal

1. Plaintiff’s ground of appeal

A. As to the existence and scope of defects and the cost of repair

The contractor's liability for repairing defects is also established for the part completed before the completion of the contract. The part completed before the completion of the contract refers to the condition where the work of the part where the defect occurred even though the whole is not completed under the contract, and where the contractor claims the repair of defects, the court shall specify the types and degree of the defects to be repaired, and shall deliberate on the appropriate method for repairing the defects and the cost necessary for repairing the defects, and shall determine whether the contractor may be held liable for repairing the defects by considering whether the defect is important or not even if the defect is not important (see Supreme Court Decision 91Da3056 delivered on December 10, 191).

In full view of on-site inspection and appraisal results, the court below found that the slves thickness from the first floor to the 9th floor of the building of the building of this case were less and less slves thickness, not less than slves were generated due to slves laid underground, the slves were generated in each floor, and slves were generated in each floor, and the slves and the slves and the 2nd floor and the 4nd floor were less stable, and that there were defects in the outer columns from the first to the 6th floor. According to the records, the court below determined the method of and expenses for repairing the defects. In light of the records, the construction of the slves, beams, and the slves in which the above defects occurred were completed, and it can be known that there was no relation with the removal of part of the completed part of the building of this case after the discontinuance of the construction of this case, or the occurrence or expansion of the defects neglected for several years, and therefore, the judgment below is correct, and there is no violation of law.

B. As to the method of exercising the defect repair claim

According to the records, the defendant's assertion that "it is possible to refuse the payment of the price until the completion of the repair of defects" in the legal brief dated December 20, 1997, and that "if the repair of defects is possible, the cost of repairing defects shall be deducted from the cost of the works of the works of the works of the works of the works of the works of the works of the works of the works of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project of the project

C. Regarding the time when the defect repair liability occurred

According to the records, Article 18 of the contract for the construction work of this case is a provision concerning the procedure and method for the payment of the cost of the construction work according to the nature and nature of the construction work, and Article 22 of the same contract is not a provision concerning the time of the occurrence of the defect liability, but a provision concerning the method and period of the defect repair to guarantee the defect repair for a certain period after the completion inspection, and is not a provision concerning the time of the defect repair liability. Thus, the judgment of the court below that recognized the plaintiff's liability for the defect repair of the building of this case regardless of the completion inspection is proper, and there is no error of law in the misapprehension

D. As to the determination of construction cost due to the confirmation of the price of the completed construction work

According to the records, the defendant, after the completion of the construction of this case on January 25, 1993, prepared a document confirming that the amount of the construction work to be paid by the defendant is KRW 5.2.5 billion (including additional tax, KRW 5.7772.75 million) and delivered it to the plaintiff. Thus, it cannot be deemed that the defendant's right to claim repair of defects against the plaintiff was extinguished by the preparation of the above certificate alone, and there are no other circumstances suggesting that the defendant renounced the right to claim repair of defects.

Therefore, the judgment of the court below that recognized the plaintiff's liability for repairing defects regardless of the preparation of the above confirmation document is correct, and there is no violation of law by misunderstanding the legal principles as to the meaning of the confirmation of construction price

E. As to the exercise of right to defense of simultaneous performance

Where there is a defect in the completed object or part of the completed object in a contract for work, the contractor may claim against the contractor for the compensation of the defect, or in lieu of or together with the repair of the defect (see, e.g., Supreme Court Decisions 91Da3056, Dec. 10, 1991; 96Da7250, Jul. 12, 1996; 2001Da21632, 21649, Jun. 15, 2001).

In addition, even if the contract price is agreed to be paid in installments based on the completed value as in this case, unless there are special circumstances, the obligation to pay the construction price in the simultaneous performance relationship with the defect repair obligation is not limited to the amount of the completed construction work for the part where the defect occurred, unless there are other special circumstances. This is because, if the contractor pays the cost of the completed construction corresponding to the part where the defect occurred and finds the defect late after the occurrence, it is impossible to exercise the right of defense of simultaneous performance, and it is contrary to fairness.

Therefore, the decision of the court below is justified in the measure that does not limit the scope of the construction cost that the defendant may refuse payment to the construction cost for the part where the defect occurred, and it is not erroneous in the incomplete hearing or incomplete reasoning as otherwise alleged in the ground of appeal by the plaintiff.

On the other hand, in a case where the relationship of simultaneous performance is generally acknowledged, if excessive expenses are required to perform the obligation of simultaneous performance or the performance of the obligation is practically difficult, while the benefit gained by the person having the right of defense as a result of the performance of the obligation is not so large that the exercise of the right of defense is a means to avoid only the performance of the obligation, the exercise of the right of defense should be excluded as abuse of rights (see Supreme Court Decision 91Da29972 delivered on April 28, 1992).

According to the court below's duly admitted, the building of this case is not allowed to use the building of this case unless it is repaired, and approximately KRW 676,401,00 for the purpose of the repair. If there are circumstances, the degree of the defect is excessive and excessive cost is not required for the repair. Thus, the defendant's exercise of the right to claim the repair of defects itself cannot be viewed as abuse of rights.

However, according to the records, the amount of the construction work that the defendant did not pay is KRW 5,402,59,00, while the cost of the construction work of this case is KRW 676,401,00, the cost of the defect repair of this case is limited to KRW 676,401,00, and the defendant does not pay the cost of the construction work in accordance with the agreement since the advance payment was made, and it is recognized that there is no financial ability and it is unclear whether the construction work should be paid even after the defect repair is completed in the future. Therefore, it is reasonable to limit the scope of the cost of the construction work of this case, which the defendant may assert the right

Nevertheless, the court below ordered the defendant to pay the whole price of the construction work of the building of this case in return for the completion of the repair of defects in the building of this case, which affected the conclusion of the judgment by misunderstanding the legal principles as to the defect repair obligation of the contractor and the simultaneous performance obligation of the contractor. The plaintiff's ground of appeal

2. As to the Defendant’s ground of appeal

A. As to the liquidated damages

The court below acknowledged that the plaintiff agreed to pay compensation for delay equivalent to 1/1,000 of the contract amount per day of delay when the plaintiff entered into the construction contract of this case and failed to complete the construction within the said period. The defendant's assertion that the plaintiff started the construction work on April 11, 1991 is insufficient to recognize it, and there is no other evidence to acknowledge it. Rather, the date of completion of the construction contract of this case is recognized as the plaintiff started the construction work on November 1, 1991 after the completion of the removal construction work of the old building, and the date of completion of the construction contract of this case is the date of May 1, 1993 when the plaintiff started the construction work of this case was 18 months from November 1, 191 when the plaintiff started the construction work of this case and the defendant did not pay compensation for delay before the expiration of the construction work before December 20, 199.

According to the records, the plaintiff stated that "the plaintiff commenced new construction of the building of this case on April 11, 1991" on February 9, 1995. The defendant stated that "the construction of the new building of this case was commenced on April 11, 1991." On July 20, 1995, "the plaintiff should complete the construction of this case within 18 months from the commencement date of construction work of this case." The plaintiff stated that "the construction of this case shall not be completed until October 11, 1992." The plaintiff stated that "the date of commencement of construction of the new construction of this case was 9 days after the completion date of the new construction of this case was 199 days after the completion date of the construction of this case." The plaintiff stated that "the removal of new construction of the new construction of this case was 9 days after the completion date of the construction of this case was 9 days after the completion date of the construction of the new construction of this case," and that "the removal of new construction work of this case was 19 days after the completion date.

Therefore, the court below erred in finding that there was no evidence to acknowledge the fact that the date of commencement of the construction of this case was the date of April 11, 1991, and that there was no evidence to prove it. However, since the confessions are contrary to the truth and were revoked due to mistake, the above mistake of the court below does not affect the conclusion of the judgment. The defendant's ground of appeal on this point is without merit.

B. As to the assertion that the deadline for the payment of the construction cost has expired

The court below acknowledged the fact that the plaintiff paid the construction price at the time of the construction contract in this case to the defendant's possession fund and the rent in lots and agreed to use the rent in lots as the top priority for the payment of the construction price. However, in light of the fact that the defendant agreed to pay the plaintiff the payment in advance for the construction ingredients up to every two months after the commencement of construction work and to pay the payment in advance at 17.5% interest per annum from the lapse of six months after the commencement of construction work if the payment in advance is not made within the above period, the court below held that the plaintiff and the defendant did not agree to the payment in advance for the rent in the building and the method of using the rent in lots, and that the payment in the construction price shall not be deemed to have been postponed after the completion of the building. In light of the records, it is proper in the judgment of the court below, and there is no error of law by misunderstanding

C. As to the liability for damages caused by the discontinuance of construction

In a continuous transaction, in cases where a supplier agreed to receive payment after settling accounts at a certain period of time after the supply of goods or services first, the supplier may refuse the performance of his/her own obligation for the following period of time until the time when the due date is already due and the settlement of accounts is completed, or the other party’s obligation has not yet been paid. However, in cases where performance of the due date is considerably unstable, in light of Article 536(2) of the Civil Act and the principle of good faith, the supplier may refuse the performance of his/her obligation for the following period of time until the time when the due date is already due and the other party’s obligation for the foregoing has already been paid or the other party’s obligation for the foregoing is resolved (see, e.g., Supreme Court Decision 93Da5387, Feb. 28, 1995).

According to the records, even though the Defendant agreed to pay the construction cost upon the advance payment every two months in the contract for the instant construction work, it is not paid at all since the advance payment was made, and in light of the current status of the property, it can be acknowledged that there is a clear situation as to whether to pay the construction cost in the future. Thus, the Plaintiff’s completion of the instant construction work is the obligation to perform the original advance payment, but the Plaintiff may refuse the completion of the remaining construction until the due date has already expired or until the cause for the Defendant’s failure to pay the construction cost has been resolved.

Therefore, the court below's decision that the defendant shall not be held liable for the delay in completion of the construction work because the plaintiff's failure to complete the construction work by the date of completion of the construction work is caused by the defendant's default of the obligation to pay the construction cost, is somewhat insufficient, but its conclusion is justified, and it shall not be deemed that there is an error in the omission of judgment as alleged in the ground for

3. Therefore, the part of the judgment below against the plaintiff is reversed, and that part of the case is remanded to the Seoul High Court for further proceedings consistent with this Opinion, and the defendant's appeal is dismissed, and the costs of appeal are assessed against the defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jae-sik (Presiding Justice)