[1] The standard for determining whether a sale between merchants is a defined term sale under Article 68 of the Commercial Code

[2] The case holding that a transaction between merchants under Article 68 of the Commercial Act can not be deemed as a defined term transaction between merchants solely on the ground that the international trade in which the price fluctuation of raw materials with severe price is an object of contract

[1] In the case of a fixed term transaction between merchants as stipulated in Article 68 of the Commercial Code, the other party may claim the effect of rescission immediately after the time when one of the parties has fulfilled the obligation. The issue of whether it is a fixed term transaction between merchants shall be determined by taking into account the following: (a) the price fluctuation of the subject matter of sale; (b) whether the subject matter of sale was known to the other party; (c) whether the purpose of the purchase and sale contract was to enter into; and (d) the method of settlement of the purchase and sale amount; and (e) whether the period of shipment is uncertain and important; (e) whether the terms and conditions, such as the terms and conditions of the purchase and sale; (e) the method of entering into

[2] The case holding that in light of the method of entering into and implementing the previous contract between the contracting parties and the specific implementation conditions of the contract, the reason that price fluctuation is an international trade in which raw materials with a high price fluctuation as contract object can not be deemed as a fixed term transaction between merchants under Article 68 of the Commercial Act

[1] Article 68 of the Commercial Act / [2] Article 68 of the Commercial Act

Plaintiff Company (Law Firm Squa, Attorneys Lee Jae-in et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Jeong-dong International Law, Attorneys Seo Dong-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Na101518 decided January 15, 2009

The judgment below is reversed and the case is remanded to Seoul High Court.

The plaintiff and the defendant's grounds of appeal are examined in logical order.

1. The defendant's first ground for appeal

Examining the reasoning of the judgment below in light of the records, the court below, although there was no agreement between the parties on the terms and conditions of payment of the contract of this case, method of resolution of disputes, transshipment and installment shipment, such matters can be supplemented by transaction practice between the parties or the provisions of the law applicable to the contract of this case, and there was an agreement on the subject matter, quantity, price, and due date, which can be deemed the most important factor in the contract of this case. Although the contract of this case was performed by the defendant, the defendant provided 18MT, provided the plaintiff and received them without objection, and paid the corresponding amount. The plaintiff and the defendant did not agree on the remaining parts of the contract of this case prior to the transaction of this case only through two times and agreed on the quantity, due date, etc., and did not reach an agreement on the payment of the contract of this case, it did not err in the misapprehension of legal principles as to the establishment of the contract of this case and the contract of this case. The plaintiff and the defendant delivered the price of this case several times under the premise that the contract of this case was concluded.

2. The plaintiff's ground of appeal No. 1 and the defendant's ground of appeal No. 3

Article 68 of the Commercial Code provides, "If the purpose of a contract cannot be achieved unless the purpose of the contract is fulfilled at a certain time or within a certain period by the nature of sale and purchase between merchants or by the declaration of intention of the parties, the other party shall be deemed to have cancelled the contract if one of the parties has passed immediately, and the other party may assert the effect of cancellation immediately after the time when the performance has been performed by one of the parties concerned, without the other party's peremptory notice or the declaration of intent to cancel the contract." Thus, the issue of whether the sale between merchants is final and conclusive shall be determined by taking into account the following factors: the price fluctuations of the subject matter of sale, the purpose of the sale and purchase contract, and whether the other party has been known of the subject matter of sale, the method of settlement of the purchase price, and the specific situation of performance in the sale contract.

The lower court determined that the instant contract constitutes a final installment sale under Article 68 (a) of the Commercial Act, in which the purpose of the contract is not achieved unless it is performed within the due date agreed upon by the parties’ intent or within the due date agreed upon by the parties’ intent, in full view of the following: (a) the subject matter of the instant contract is a raw material with a significant price fluctuation; (b) the Plaintiff, the purchaser of the raw materials, purchased Perobn for the purpose of resale; and (c) the Defendant also concluded the instant contract on the premise that it should import and resell Perobn from China to the Plaintiff; and (d) such contract has a significant meaning to the extent that the decision of due date is in an indivisible relationship with the decision of due date; and (e) there is concern that one party would incur a big loss depending on the circumstances where the performance

However, the circumstances cited by the court below are merely a general nature in the international trade in raw materials. Rather, according to the reasoning of the court below and the evidence that the contract in this case was concluded upon the expiration of the due date specified in the contract in this case, even if the original and the defendant performed the contract in this case before the due date, it is difficult to accept the judgment of the court below that the contract in this case was concluded upon the expiration of the due date specified in the contract in this case, and that some of the contract in this case was performed after the due date specified in the contract in this case, and that the contract in this case was partially performed after the due date and the contract number in this case was entered in the commercial invoice and that the payment was made under the conditions consistent with the contract in this case, and the discussion process and contents revealed that it was evident that the remaining part of the contract in this case was performed by the original and the defendant after the due date was performed. Thus, it is difficult to accept the decision of the court below that the contract in this case was a final transaction under Article 68 of the Commercial Act.

In addition, according to the records, it can be known that all the plaintiff and the defendant did not assert that the contract of this case was a final installment transaction under Article 68 of the Commercial Act at the first instance court and the lower court. However, the court below's determination of the issue that was not an object of assertion and proof at all cannot be deemed significantly unfair, and it is necessary for the court below to exercise the right of explanation and urge the parties to assert and present evidence in order to determine it as a final installment transaction. However, the court below erred by neglecting the exercise of such right of explanation and failing to exhaust all necessary deliberations.

Therefore, the judgment of the court below that the contract of this case constitutes a sale for fixed term, which affected the conclusion of the judgment, is erroneous in the misapprehension of legal principles as to the requirements for recognition of sale for fixed term, and there are errors in the misapprehension of legal principles as to the elements for recognition of sale for fixed term. Thus, the ground of

3. Conclusion

Therefore, without examining the remaining grounds of appeal by the Plaintiff and the Defendant, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)