Standard time to determine whether a contract constitutes an unfair juristic act / (i) the elements to establish an unfair juristic act / (ii) the time to determine whether a contract constitutes an unfair juristic act / Whether a contract constitutes an unfair contract as a matter of course, on the ground that a significant loss is incurred to one of the parties to the contract as a result of rapid changes in external environments, and corresponding benefits may accrue to

Article 104 of the Civil Act

Supreme Court en banc Decision 2011Da53683, 53690 Decided September 26, 2013 (Gong2013Ha, 182)

De.D.C. Co., Ltd. (Law Firm Han field, Attorneys Park Ha-young, Counsel for the plaintiff-appellant)

Seoul High Court Decision 200Na14488 decided May 1, 200

Seoul High Court Decision 2013Na2012257 decided June 13, 2014

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. The court may, unless it considers it is the sole evidence of the facts alleged by the party that the evidence requested by the party is not necessary (Article 290 of the Civil Procedure Act).

Since the application for on-site inspection filed by the defendant does not constitute the only evidence of the defendant's assertion, and it does not necessarily need to be accepted on the records, it cannot be said that the court below erred in rejecting the application or failed to exhaust all necessary deliberations.

2. The reasoning of the written judgment is sufficient to indicate the judgment on the party’s assertion and other means of offence and defense to the extent that it can be recognized that the text is justifiable (Article 208 of the Civil Procedure Act). Therefore, even if the specific and direct judgment on the matters alleged by the party is not indicated in the court’s judgment, it cannot be deemed an omission of judgment if it is possible to find out that the assertion was cited or rejected in light of the overall purport of the reasoning of the judgment, and even if it was not actually determined, if it is obvious that the assertion would be rejected, it does not affect the conclusion of the judgment, and thus, it cannot be said that there was an omission of judgment (see Supreme Court Decision 2011Da87174, Apr.

The court below rejected the defendant's claim on the premise that the contract of this case was valid, and even if the contract of this case was the land lease contract as alleged by the defendant, in light of the circumstances as stated in its reasoning, the court below rejected the defendant's claim on the right to claim for the reduction of rent on the ground that it is difficult to regard the storage fees of this case as substantially unfair due to changes in circumstances, in light of the circumstances as stated in its reasoning. Such judgment of the court below contains the judgment that indirectly rejected the defendant's claim that the contract of this case, which was prepared as if the defendant kept the river in custody and operated the river, is invalid as a false declaration of conspiracy, and the judgment that it is impossible to accept the claim for the reduction of rent as alleged by the defendant without any need to decide whether the contract of this case is the land lease contract as alleged by the defendant,

3. An unfair legal act under Article 104 of the Civil Act is established when there exists a significant imbalance between payment and consideration, and such an unfair legal act is established when a transaction which has lost balance took place using scambling, rashness, or inexperience of the victimized party. Even if the victimized party was in imminent condition, if the victimized party knew of the circumstances of the victimized party, and, i.e., the intent to use it, if there was no bad faith or there was no significant imbalance between payment and consideration, it shall not be deemed an unfair legal act under Article 104 of the Civil Act. Furthermore, whether a certain legal act constitutes an unfair legal act shall be determined at the time of the juristic act. Thus, if it is not an unfair legal act as a result of comprehensively taking into account the rights and duties relationship in accordance with the terms of the contract as of the time of signing the contract, it shall not be deemed that the contract constitutes an unfair contract as a matter of course, on the ground that the other party suffers a big loss as a result of rapid change in the external environment and the other party may benefit corresponding thereto (see, etc.)

In full view of the circumstances stated in its reasoning, the lower court rejected the Defendant’s assertion that the instant contract constitutes an unfair juristic act and thus null and void, on the grounds that it is difficult to recognize that the Defendant was in a state of rashness or experience in entering into the instant contract, and that even if the Defendant had to use the instant land at the time, such circumstance alone cannot be readily concluded that the Defendant was in an imminent state, and that the Defendant’s benefits under the instant contract cannot be deemed significantly unfair. Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine regarding unfair juristic act

4. Furthermore, the lower court determined that it was difficult to recognize that, in light of the following circumstances as indicated in its holding, even though it was acknowledged that there was a drop in the shipping industry at the time of the conclusion of the lower judgment’s argument compared to the time of the instant contract, the detention fees between the Defendant and Samsung Heavy Industries, which are essential elements of the instant contract, continued to be maintained at KRW 2,500 per ton since February 2010, solely on the grounds that the price of the shipbuilding industry drops, it was considerably unreasonable to detain the Defendant under the agreement, such as storage fees and the minimum quantity guarantee

In light of the relevant legal principles and records, the above fact-finding and determination by the court below are just, and there is no error of law by failing to exhaust all necessary deliberations or by misapprehending the legal principles on the right to claim the reduction of the difference.

5. 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 Ko Young-han (Presiding Justice)