[1] The requirements and standard for determining the terms and conditions to be null and void on the ground that they are unfairly unfavorable clauses to customers, which are “a clause which has lost fairness in violation of the principle of trust and good faith”

[2] Where a seller fails to fulfill the obligation to pay the sale price under the contract for sale in lots, and the effect of the contract for sale in lots is at issue, which provides that the seller shall bear the management expenses incurred from the date following the expiration date of the contract for sale in lots until the date of cancellation of the contract for sale in lots and the property tax generated after the first date of the designation period for occupancy in lots separate from the penalty, the case affirming the judgment below holding that the above provision cannot be seen as a provision that transfers the risks to be borne by the seller without a reasonable reason to the customer

[3] The validity of a standardized contract clause excluding the obligation to return interest where an enterpriser returns the money already received due to the cancellation of a contract (=in principle invalid)

[4] In a case where the validity of the sales contract clause which provides that the buyer does not refund interest on the price already paid, the case affirming the judgment below that the above provision is null and void in principle as it violates Article 9 subparagraph 4 of the former Regulation of Standardized Contracts Act, and it is also identical to the party's perception that the buyer does not collect and confiscate the down payment which is confiscated as penalty after returning it to the other party and return it again to the other party, and it does not return it to the other party, and thus, it does not constitute an unfair reduction of the business operator's duty of restitution of interest, and thus, it cannot be deemed null and void.

[1] Article 6(1) and (2)1 of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010) / [2] Article 6(1) and (2)1 of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010); Article 9 subparag. 4 (see current Article 9 subparag. 5) of the former Regulation of Standardized Contracts Act; Article 551 of the Civil Act / [3] Article 9 subparag. 4 (see current Article 9 subparag. 5) of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010); Article 548(2) of the Civil Act / [4] Article 6(1) and (2)1 of the former Regulation of Standardized Contracts Act (Amended by Act No. 10169, Mar. 22, 2010; Act No. 4)

[1] Supreme Court Order 2007Ma1328 Decided December 16, 2008 (Gong2009Sang, 29) Supreme Court Decision 2013Da214864 Decided June 12, 2014 (Gong2014Ha, 1387) / [3] Supreme Court Decision 2008Da75393 Decided December 24, 2008 (Gong2010Da21849 Decided April 12, 2012)

Plaintiff (Counterclaim Defendant) (Law Firm Hanjin, Attorneys Jeon Soo-soo et al., Counsel for the plaintiff-appellant)

anti-do Comprehensive Construction (Law Firm Apex, Attorneys Park Gi-ju et al., Counsel for the plaintiff-appellant)

Incheon District Court Decision 2014Na1461, 1478 Decided June 27, 2014

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the ground of appeal on the validity of the burden clause, such as management expenses and property tax

A. Under Article 6(1) and (2)1 of the former Regulation of Standardized Contracts Act (amended by Act No. 10169, Mar. 22, 2010; hereinafter “former Regulation of Standardized Contracts Act”), in order to consider the terms and conditions as null and void on the ground that they are unfairly unfavorable terms and conditions to customers, the terms and conditions are somewhat disadvantageous to customers. It is insufficient to say that the terms and conditions are somewhat unfavorable to customers. It should be acknowledged that the standardized contract maker abused his position in the transaction, thereby impairing sound trade order by preparing and using the terms and conditions contrary to the legitimate interests and reasonable expectations of the contracting parties. Whether the terms and conditions are “unfairly unfavorable terms and conditions to customers” constituting grounds for invalidation of the terms and conditions should be determined by comprehensively taking into account all the circumstances such as the content and likelihood of disadvantages that may arise to customers pursuant to the terms and conditions, influence on the transaction process between the parties, influence on the transaction process between the parties, and relevant provisions (see Supreme Court Decision 2014Da1634164, Dec. 27, 2016).

B. The lower court rejected the Plaintiff’s assertion that (1) management expenses and property tax are valid, and (2) where the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) did not fulfill the obligation to pay the sale price, etc. as stipulated in the instant sales contract, and the damages suffered by the Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) can also be deemed as damages even if the sales contract was cancelled, and (2) where the sales contract was cancelled due to the Plaintiff’s nonperformance, Article 2(2) of the instant sales contract clearly states that the damages can be claimed separately from penalty, and (2) where the sales contract was cancelled due to the Plaintiff’s default, the Plaintiff’s obligation to pay the management expenses and property tax can be separately claimed pursuant to the agreement if the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) entered into an additional agreement on damages between the parties, and (2) where the contract was rescinded, the Plaintiff may claim damages from the date of the first sale contract to the buyer and the damages from the date of the cancellation of the sale contract, and determined that the penalty can not be claimed for damages from the expiration date of the first sale contract (2).

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court appears to be based on the legal doctrine as seen earlier, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine regarding the interpretation of terms and conditions, the liquidated damages, and the terms and conditions which lose fairness

2. As to the ground of appeal on the validity of the exemption clause for the refund of interest on penalty

A. Article 9 of the former Terms and Conditions Regulation Act provides that “any of the terms and conditions that provide for the following matters concerning the cancellation or termination of a contract shall be null and void.” Article 4 of the same Act provides that “When a sales contract is terminated, the obligation of a business operator to restore or compensate for damages due to the cancellation or termination of a contract shall be unreasonably mitigated.” In the event that the sales contract is terminated, the payment shall be made in addition to legal interest from the date on which the contract is received pursuant to Article 548(2) of the Civil Act. As such, where a business operator returns money already received due to the cancellation of a contract, the terms and conditions excluding the obligation of return of interest shall be presumed to be unfair disadvantageous to the customer and invalid, but this provision does not apply where there are reasonable grounds to justify such termination (see Supreme Court Decisions 2008Da75393, Dec. 24, 2008; 2010Da21849, Apr. 12, 2012).

B. The court below held that the proviso of Article 4 (3) of the sales contract of this case, which provides that interest on the price already paid by the plaintiff does not be returned, is null and void in principle because it violates the provisions of Article 9 (4) of the former Standardized Contract Regulation Act, and thus, is null and void in principle, on the grounds as stated in its reasoning. (2) However, in the case of the down payment confiscated as a penalty, it is a general transaction situation and the recognition of the parties is that it is not returned again to the other party, and it is the same as the other party's awareness that it is not returned, and in light of the fact that the apartment standard supply contract of apartment and the apartment sales contract of the Cheongra zone publicly notified by the Fair Trade Commission provide that interest on the price already paid by the plaintiff shall be returned by adding interest only to the remainder after deducting the penalty, even if the defendant's obligation to pay the payment is excluded, it cannot be deemed null and void.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s aforementioned determination is based on the legal doctrine as seen earlier. In so doing, it did not err by misapprehending the legal doctrine on the time when the penalty is reverted, the interpretation of terms and conditions, and the statutory interest and the duty

3. Conclusion

Therefore, the 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 on the bench.

Justices Kim So-young (Presiding Justice)