1. All appeals filed by the Defendant (Counterclaim Plaintiff) against the principal claim and counterclaim are dismissed.

2. The costs of appeal shall be the principal lawsuit.

1. The reasoning of the court of first instance’s explanation concerning this case is as follows, except where the defendant makes a decision as to the part of the appeal as the grounds for appeal by the court of first instance, and as such, it is so accepted by the main sentence of Article 420 of the Civil Procedure Act.

2. Additional determination

A. Article 4(3) of the instant Construction Contract for the Reasons of Appeal by the Defendant is a provision stipulating a penalty for breach of contract, and there is no provision stipulating a right to rescind an agreement in light of the content of Article 12 of the instant Construction Contract, etc.

Therefore, in order to cancel the instant construction contract, the Plaintiff asserts that Article 565 of the Civil Act does not apply since the Defendant waived down payment of KRW 40 million paid to the Defendant pursuant to Article 565(1) of the Civil Act, and the Defendant started the implementation of the instant construction contract in the first instance trial. However, the appellate court asserted that the Plaintiff should waive down payment of KRW 40 million pursuant to Article 565 of the Civil Act on the premise that the Defendant was before commencing the implementation of the instant construction contract (the third and fifth grounds for appeal). Thus, the Defendant’s assertion that the Plaintiff commenced the performance before the Plaintiff expressed his/her intent to rescind the said contract is withdrawn.

A separate penalty shall be paid to the defendant 20 million won, which is a half of the down payment.

B. Determination 1) The right to cancel under Article 565 of the Civil Act is recognized only where there is no other agreement between the parties. If the parties agree to exclude the right to cancel under the above provision, the right to cancel may no longer be exercised (see, e.g., Supreme Court Decision 2008Da50615, Apr. 23, 2009). However, the claimant must prove that the parties agreed not to withhold the right to cancel the contract despite the receipt of the down payment.