The meaning of “unfairly excessive cases” where a court may reduce the estimated amount of damages pursuant to Article 398(2) of the Civil Act.

Article 398(2) of the Civil Act

Supreme Court Decision 90Da14478 Decided March 27, 1991 (Gong1991, 1265) Supreme Court Decision 2008Da46906 Decided November 13, 2008

Plaintiff 1 and 87 others (Law Firm Green, Attorney Park Jin-jin, Counsel for the plaintiff-appellant)

AC Development Co., Ltd. (Law Firm LLC, Attorneys Lee Yong-woo et al., Counsel for the plaintiff-appellant)

Gwangju High Court Decision 2010Na4980 decided August 26, 2011

All appeals are dismissed. The costs of appeal are assessed against the defendant.

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

1. Regarding ground of appeal No. 1

According to the reasoning of the judgment below, the court below decided that the plaintiffs' contract of this case was cancelled if the plaintiffs were unable to move into within three months from the scheduled date of occupancy due to the reasons attributable to the defendant, and the contract was cancelled for such reasons, and the defendant agreed to pay 10% of the total supply price to the plaintiffs as penalty (hereinafter "the contract of this case"), and the Korea Housing Guarantee Co., Ltd. (hereinafter "Korea Housing Guarantee Co., Ltd.") which concluded the contract of this case as to the apartment of this case (hereinafter "the contract of this case") with the defendant cannot be seen as being cancelled for the reasons that the contract of this case was terminated for the reasons that the supervisor's execution rate does not reach 25% or more than the scheduled progress rate, and the plaintiffs' contract of this case was terminated for the reasons that the contract of this case was terminated for the reasons that the plaintiffs did not have agreed to move into the sale contract of this case to the defendant on February 3, 2009.

In light of the relevant legal principles and records, it may be deemed that the plaintiffs had no intent to maintain the sales contract of this case when the plaintiffs were refunded the sales price from the Korea Housing Guarantee. However, in light of the fact that it can be deemed that the grounds for the cancellation of the sales contract of this case have already occurred due to the defendant's nonperformance of obligation, it is reasonable to deem the above fact-finding and determination of the court below as the intention of statutory cancellation rather than as the intention of rescission of agreement. Therefore, contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles as to the cancellation or termination of the sales contract of this case, or by misapprehending the bounds of the

The Defendant’s remaining grounds of appeal No. 1 are asserted only in the grounds of appeal, and thus, cannot be legitimate grounds of appeal.

2. Regarding ground of appeal No. 2

Under Article 398(2) of the Civil Act, the phrase “unfairly excessive cases” in which the court may reduce the estimated amount of damages pursuant to Article 398(2) means cases where, regardless of whether there is no damage or not, the amount of damages is less than the estimated amount of damages. Considering the economic status of the contractor, the purpose and content of the contract, the details of the scheduled amount of damages, the transaction practices and other circumstances, the payment of such estimated amount of damages means cases where it is deemed that the payment of such estimated amount of damages results in the loss of fairness by imposing unfair pressure on the debtor in the position of the economically weak (see, e.g., Supreme Court Decisions 90Da14478, Mar. 27, 191; 2008Da46906, Nov. 13, 2008).

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s determination that it is reasonable to reduce the amount equivalent to the down payment paid in the case of the Plaintiff, the first-come-served order, and the largest private person who paid the down payment not exceeding 5 million won, which falls short of 3% of the total supply price of the apartment of this case, by taking into account the circumstances acknowledged by the adopted evidence. In so doing, it did not err by misapprehending the legal principles on the reduction of the estimated amount of damages, or by misapprehending the legal principles on the reduction of the estimated amount of damages, contrary to what is alleged in the grounds of appeal.

3. As to the third ground for appeal

According to the reasoning of the judgment below, the court below held that as long as the sales contract in this case was cancelled, the defendant has a duty to return the balcony expansion contract with all the plaintiffs, who are the buyer of the apartment in this case, entered into a balcony expansion contract at the time of entering into the sales contract in this case, and received one million won each as contract deposit, it is reasonable to view that the contract in this case was cancelled.

In light of the records, the above judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the principle of free evaluation of evidence against logical and empirical rules, or in the misapprehension of legal principles as to the cancellation of contract.

4. Conclusion

Therefore, all appeals are 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 Jeon Soo-ahn (Presiding Justice)