The legal nature of the warranty bond agreed upon by the construction company to enter into a construction contract with a local government (=the penalty)

The warranty bond agreed upon by a construction company in a construction contract concluded with a local government falls under the so-called penalty or penalty, which indirectly forces the performance of the contractor's liability for repairing defects under the above contract and the contractor fails to perform the said liability, which shall belong to the local government, as a sanction, and thus, the contractor's claim for the return of the warranty bond arises under the condition that the contractor performs the defect repair obligation under the above contract even if any defect occurs within the warranty period or within the period.

Articles 398 and 667 of the Civil Act; Articles 12(3) and 18(3) of the Act on Contracts to Which the State is a Party; Article 63 of the Local Finance Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Domin, Attorneys Park Jae-young and 1 other, Counsel for plaintiff-appellant)

Plaintiff (Attorney Kim Jin-soo, Counsel for the plaintiff-appellant)

Jeju-do (Attorney Cho Sung-ap et al., Counsel for defendant-appellee)

Gwangju High Court Decision 96Na770 delivered on July 18, 1997

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

The grounds of appeal are examined.

In light of the above facts and records, the non-party 1 and the non-party 3 company were subject to sanctions against the non-party 1 company regarding the defect repair under the provision of the contract for the non-party 1 and the non-party 5 company's warranty bond, and the non-party 1 and the non-party 4 company were subject to warranty bond or the non-party 1 company's warranty bond under the provision of the contract for the non-party 1 and the non-party 5 company's warranty bond within the non-party 1 and the non-party 3 company's warranty bond within the non-party 1 and the non-party 5 company's warranty bond within the non-party 1 and the non-party 4 company's warranty bond within the non-party 1 and the non-party 5 company's warranty bond within the non-party 1 and the non-party 3 company's warranty bond within the non-party 1 and the non-party 5 company's warranty bond within the non-party 1 and the non-party 198 company's warranty bond.

In addition, the plaintiff's assertion based on the premise that the above warranty bond is the estimated amount of compensation for the non-performance of defects is a new argument that is not limited to the original judgment but merely a single opinion that is not accepted.

Therefore, the appeal shall be dismissed and the costs of appeal shall be assessed against the plaintiff who is the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Jong-ho (Presiding Justice)