2013Na54627 Damages

Korea

Biosastteclosion Co., Ltd.

Seoul Central District Court Decision 2012Da508607 Decided October 11, 2013

March 17, 2015

April 7, 2015

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant shall pay to the plaintiff 46,31,700 won with 20% interest per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

2. Purport of appeal

The same shall apply to the order.

1. Basic facts

A. On November 23, 2010, the Plaintiff (the National Archives of the competent authority) entered into a purchase contract with the Defendant, a supplier of records disinfection chemicals (hereinafter referred to as the “instant contract”), and on December 22, 2010, supplied 37,78,000 won for goods to the Defendant on December 27, 2010.

B. Of the relevant statutes and the contract terms of this case, the parts related to the lower judgment are as shown in the attached Form.

C. Before entering into the instant contract, the Plaintiff demanded a certified testing institution to submit a test report on the disinfection effect (the Plaintiff’s disinfection effect (the microbes (pathy and mycotos) germs and 100% fungum fungum fungum, 100% fungum fungum fungum fungum, etc., after disinfection treatment, should not be born for five days after the disinfection treatment, and there must be no movement after two hours).

D. The Defendant: (a) to the Korea Testing and Research Institute of Chemical Convergence (hereinafter referred to as the “KTR”); (b) to request Fungchiscination test to the Korea Agricultural Science Research Institute of Chungcheongnamnam University, and (c) received a test report as shown below (hereinafter referred to as the “Defendant Test Report”).

A person shall be appointed.

A person shall be appointed.

E. On December 201, the Plaintiff, who used the instant disinfection medicine supplied by the Defendant, requested the TPP to test the costs of KRW 8,543,700 in order to verify the effect of disinfection. From December 19, 2011 to January 26, 2012, the Plaintiff conducted a test and submitted a test report (hereinafter “Plaintiff’s test report”) as follows.

A person shall be appointed.

F. The main reason behind the result of a significant fall from the Plaintiff’s examination report in comparison with the Defendant’s examination report is that: (a) the Defendant’s examination, at the request, did not put the records inside the disinfection equipment, put them into the stuffed product samples; and (b) the Plaintiff’s examination, upon the Plaintiff’s request, put them in the records inside the disinfection equipment and conducted disinfection; and (c) the effect of disinfection differs depending on the existence and quantity of the records inside the disinfection equipment operated by the cirrative method.

G. On July 10, 2012, based on the result of the Plaintiff’s test report, the Plaintiff demanded the Defendant to submit a document verifying the efficacy of disinfection equipment and notified the Defendant that the supply of medicines without disinfection effect would be deemed to have been made if the data were not submitted by July 12, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2, Gap evidence 4 through 7 (including provisional number), Gap evidence 10, Gap's party testimony and the first instance court testimony, the purport of the whole pleadings

2. Plaintiff’s assertion and judgment thereon

A. The plaintiff's assertion

Before entering into the instant contract, the Plaintiff publicly announced the standards of disinfection effect and demanded a certified testing institution to submit a test report meeting the standards. Accordingly, the Defendant guaranteed disinfection effect by submitting the Defendant’s test report prepared to satisfy the standards of disinfection effect, but the effect of disinfection was found to have failed to meet the standards by the Plaintiff’s test report. Therefore, the Defendant is liable to compensate the Plaintiff for damages caused by defects (37,788,000 won for goods + KTR verification cost + KRW 8,543,700).

(b) Expiration of the defect liability period;

The Defendant supplied the instant disinfection medicine to the Plaintiff on December 22, 2010, Article 18(1) of the Special Conditions for the Quality Control of Goods Purchase Contract (hereinafter “Special Conditions”) and Article 18(1) of the "one year from the date of delivery" as the warranty period. The Plaintiff demanded the Defendant to prove the disinfection effect on July 10, 2012 when at least one year has passed from the delivery date, and it is apparent in the record that the Plaintiff filed the instant lawsuit on July 30, 2012. As such, the Plaintiff is claiming damages due to defects after the expiration of the warranty period.

Furthermore, in full view of Article 18(1) and (3) through (5) of the Special Conditions, in order for the Plaintiff to receive a refund of the price of goods from the Defendant, the Plaintiff shall notify the Defendant of the demand for defect repair or substitute supply within the warranty period. Accordingly, the Plaintiff may receive a refund of the price of goods only in a case where the Defendant refused the demand or fails to deliver the defect repair or substitute supply within the prescribed warranty period. However, as seen earlier, the Plaintiff did not demand the Defendant to demand a defect repair or substitute supply within the warranty period, and thus, the Plaintiff cannot seek damages equivalent to the price of goods under Article

In addition, in light of Article 14(1) and (4) of the State Contracts Act and Article 55(1) of the Enforcement Decree of the Enforcement Decree of the State Contracts Act, all inspection expenses under Article 6 of the special conditions are borne by the other party to the contract, but the inspection expenses borne by the other party to the contract are the inspection expenses on whether or not the defects the plaintiff should complete within 14 days after notice of the completion of the contract execution. Thus, in this case, the expenses for KTR verification which the plaintiff performed after one year from the date of delivery cannot be deemed to constitute such expenses. ② The plaintiff shall notify the defendant of the defect repair, etc. within the warranty period in order to bear the expenses related to defects pursuant to Article 18(4) of the special conditions. As seen earlier, the plaintiff failed to notify the defendant within the warranty period (KTR verification expenses are incidental expenses to seek the return of the price of the goods due to the defect). ③ When the plaintiff was selected through competitive bidding in 2011, the defendant raised several grounds for selecting a civil petition and the background of the plaintiff's request for inspection of the above disinfection.

Ultimately, the Plaintiff’s assertion is without merit, regardless of whether there is any defect in the disinfection medicine of this case.

C. Determination on the Plaintiff’s assertion of default

1) The plaintiff asserts that the defendant should be held liable in addition to the warranty liability, and that the above warranty liability period is not applicable to the latter.

Article 3 of the Act on Contracts to Which the State is a Party (hereinafter “State Contracts Act”), except as otherwise provided for in other Acts, the State Contracts Act shall take precedence over the Civil Act. As such, Article 18 of the State Contracts Act, which provides for warranty liability, constitutes a special condition that takes precedence over the Civil Act. Article 18 of the Special condition that provides for warranty liability in the instant contract constitutes the general condition of the purchase of goods (manufacture) contract prepared by the Minister of Strategy and Finance pursuant to Article 48(1) of the Enforcement Decree of the State Contracts Act and the contract terms created by the Public Procurement Service upon delegation. Article 28 of the Special condition provides that the special condition shall take precedence over the contract (order 1) and the quality control special condition (order 3) within the extent not contrary to the State Contracts Act, within the scope not contrary to the Ordinance of the State Contracts Act. Accordingly, even if the defect in the instant medicine constitutes an incomplete performance as a type of nonperformance, and is in competition with the warranty liability, it is reasonable to deem that the special condition is preferentially applied to nonperformance under the Civil Act as long as damages arising from defects.

2) The Plaintiff asserts that the liability for repairing defects in the goods supplied for a period of one year from the date of delivery under Article 18(1) of the Special Conditions is stipulated as "the liability for repairing defects in the goods supplied for a period of one year from the date of delivery," and that the liability for repairing defects shall not apply to the liability

However, when comprehensively interpreting Article 18(1) and (3) through (5) of the Special Conditions comprehensively, in order for the Plaintiff to receive the price of goods from the Defendant as compensation for damages in lieu of defect repair, the Plaintiff shall notify the Defendant of the demand for defect repair or substitute delivery within the defect liability period. Accordingly, it is reasonable to view that the defect liability period also applies to the claim for damages, such as the return of the price of goods, since the Defendant refuses the demand or fails to deliver the goods within the prescribed period of time.

3) The plaintiff asserts that the term of validity of the instant disinfection medicine was two years, and that the defect occurred within two years from the date of delivery, regardless of the defect liability period, the defendant is liable for damages caused by the defect.

However, the two-year term of validity is merely that the Defendant guarantees the efficacy of the instant disinfection medicine, so long as it is used within two years from the date of delivery, it cannot be deemed that it constitutes a defect warranty period or a defect warranty period. Therefore, the Plaintiff’s above assertion is rejected.

3. Conclusion

Thus, the plaintiff's claim of this case shall be dismissed as it is without merit. Since the judgment of the first instance is unfair with different conclusions, the defendant's appeal is accepted and the judgment of the first instance is revoked and the plaintiff's claim is dismissed.

The judge of the presiding judge shall be appointed

Judges Shin Hong-ju

Judges Cho Chang-chul

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.