In case where the prime contractor has agreed with the subcontractor that the subcontractor has the right to claim a direct payment of the subcontract price with the subcontractor at the time of the enforcement of the former Fair Transactions in Subcontracting Act, whether the subcontractor’s claim for the payment of the subcontract price against the subcontractor is transferred to the subcontractor (negative), and whether compulsory execution is restricted such as seizure of the claim for the payment of the contract price by the third

The former Fair Transactions in Subcontracting Act (amended by Act No. 5816, Feb. 5, 199; hereinafter referred to as the "former Act") applies to subcontractings entered into at the time of the enforcement of the former Act. Under Article 14 of the former Act, even if a subcontractor’s right to claim the payment of the subcontract price under a subcontract to a subcontractor directly enters into an agreement between the parties concerned, the agreement on the direct payment of the subcontract price is that the subcontractor’s right to claim the payment of the subcontract price has an effect of settling and terminating both the contract price claim against the subcontractor and the subcontractor’s contract price claim against the original contractor by directly paying the subcontract price to the subcontractor according to the subcontractor’s exercise of the subcontractor’s right to claim the direct payment of the subcontract price, and it is reasonable to deem that the contract price claim against the subcontractor of the original contractor does not directly be transferred or extinguished. Therefore, it cannot be said that the subcontractor’s right to claim the payment of the subcontract price has been transferred to the subcontractor or restricted by compulsory execution against the third party.

Article 14 of the former Fair Transactions in Subcontracting Act (amended by Act No. 5816 of Feb. 5, 199)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jae-soo et al., Counsel for plaintiff-appellant)

Plaintiff (Attorney Lee Jae-sung, Counsel for the plaintiff-appellant)

Seoul High Court Decision 200Na14488 decided May 21, 200

Gwangju High Court Decision 2000Na5465 delivered on February 23, 2001

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

1. The purpose of the agreement on direct payment of subcontract price under the former Fair Transactions in Subcontracting Act (amended by Act No. 5816, Feb. 5, 1999; hereinafter referred to as the "former Act") is to apply the former Act to each subcontract of this case which was concluded on July 7, 1998 at the time of enforcement of the former Act (amended by Act No. 5816, Feb. 5, 1999; hereinafter referred to as the "New Act"). Under the application of Article 14 of the former Act, the subcontractor's right to request the payment of subcontract price to the subcontractor directly arising from an agreement between the parties to the subcontractor, even if the subcontractor's right to request the payment of subcontract price under the subcontractor's subcontract price arises, it shall be justified that the subcontractor's obligation to the subcontractor and the subcontractor's obligation to pay the subcontract price to the subcontractor are settled and terminated at the same time due to the subcontractor's exercise of the subcontractor's right to demand direct payment of the subcontract price, and it shall not be deemed that the subcontractor's right to claim 207.

2. The remaining grounds of appeal cannot be legitimate grounds of appeal as they are alleged in the supplemental appellate brief that was not timely filed, and in light of the records, the judgment of the court below on each of the above grounds of appeal are justifiable. Thus, each of the above grounds of appeal are without merit.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)