[1] The method of interpreting a juristic act in a case where the objective meaning is not clearly revealed by the party’s language and text

[2] The case holding that in a case where Party A claimed cancellation of a sales contract against Party B on the ground that Party A’s application for a long-term lease house of 59 square meters for an exclusive use area of less than 40 square meters was rejected on the ground that Party A was disqualified from its application for a contract for the purchase of a long-term lease house of 25 square meters from Party B, and that Party B’s application for a cancellation of a sales contract on the ground that Party A was disqualified from its application for a contract for the purchase of a long-term lease house of 59 square meters, the right to cancel the contract is difficult to deem that Party A’s right to cancel the contract was created until Party A could not preferentially purchase the rent-type apartment of 25 square meters due to the reasons on the ground that Party A’s application for the purchase of a long-term lease house of 59 square meters, where the right to cancel the contract was not preferentially sold.

[1] Interpretation of a juristic act is clearly confirming the objective meaning that a party gave to an act of representation, and is not bound to the language and text, but should reasonably interpret the objective meaning given by the party to an act of representation, regardless of the party’s internal intent. In a case where the objective meaning is not clearly revealed by the party’s language and text, it shall be reasonably interpreted in accordance with logical and empirical rules, social common sense and transaction norms so as to conform to the ideology of social justice and equity, by comprehensively examining the contents of the text, the motive and background behind the juristic act in question, the purpose and genuine intent of the party to the juristic act to be achieved, and transaction practices, etc., in a case where the contents of the juristic act alleged by one of the parties cause a serious impact on the other party’s rights and obligations. In particular, more strict interpretation should be made in a case where the contents of the juristic act of which are claimed by the

[2] In a case where Party A asserted the cancellation of a sales contract against Party B on the ground that Party B did not withdraw from its application for a long-term lease house of 25 square meters from Party B, it is difficult for Party B to purchase the above apartment house of 25 square meters, and Party B issued a letter of performance stating that “A shall pay Party A the principal amount of KRW 32 million when the right to move into the apartment house of 25 square meters in the housing district is revoked,” and Party B may apply for the exclusive supply of housing of 40 square meters or less in his/her resident registration form, but Party A cannot be deemed to have applied for the cancellation of a sales contract for the above apartment of 40 square meters because Party A did not withdraw from its application for a sales contract for a long-term lease house of 59 square meters, Party B applied for the cancellation of a sales contract for the above apartment house of 20 square meters or less, and Party A may not be deemed to have the right to be allocated for each apartment house of 20 square meters or less in accordance with the relevant laws and regulations.

[1] Article 105 of the Civil Act / [2] Articles 105 and 543 of the Civil Act

[1] Supreme Court Decision 99Da43486 delivered on November 26, 199 (Gong2000Sang, 47) Supreme Court Decision 2000Da33607 delivered on January 19, 2001 (Gong2001Sang, 507) Supreme Court Decision 2005Da68950 Delivered on April 13, 2007 (Gong2006Da77197 Delivered on June 26, 2008)

Plaintiff (Law Firm Rate, Attorneys Cho Yong-han et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Law Firm Han, Attorneys Song-won et al., Counsel for the defendant-appellant)

Seoul Eastern District Court Decision 2016Na25654 decided June 21, 2017

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

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

1. Interpretation of a juristic act is to clearly define the objective meaning that the parties gave to the act of indicating it. Although it is not subject to the language and text, it is necessary to reasonably interpret the objective meaning given by the parties to the act of indicating it according to the contents of the language and text regardless of its inner intent (see, e.g., Supreme Court Decisions 9Da43486, Nov. 26, 1999; 2006Da7197, Jun. 26, 2008). In a case where the objective meaning is not clearly expressed according to the language and text expressed by the parties, if the objective meaning is not clearly expressed, the contents of the language, the motive and circumstance leading up to the juristic act revealed through the allegations and certification of the parties, the purpose and genuine intent of the parties to the juristic act to achieve through the said juristic act, transaction practices, etc., shall be reasonably interpreted in accordance with the principles of logic and experience, common sense of society and transaction norms, etc., and in a case where one party asserts to the juristic act, it should be more construed.

2. A. Review of the reasoning of the lower judgment and the record reveals the following facts.

1) On December 2010, the Plaintiff entered into the instant contract with Defendant 1 to purchase KRW 32 million from Defendant 1’s right to move in at least KRW 25-type rental apartment, through the Nonparty’s mother. By March 4, 2011, the Plaintiff paid both KRW 32 million in the purchase price of the aforementioned right to move in.

2) On January 20, 201, Defendant 1 prepared and delivered to the Plaintiff a letter of performance stating, “The purchase price of KRW 25,200,00,000 for the right to occupy a residential farm located in the Gangnam-gu Seoul Metropolitan City ○○○○-dong △△△-dong 2 (number omitted). When the right to occupy the above goods has been revoked, Defendant 1 shall pay the Plaintiff the principal KRW 32,00,000 (hereinafter “each of the instant notes”), and Defendant 2 signed each of the instant notes as the guarantor.

3) The Plaintiff was notified of the subject of preferential supply of rental apartments following the procedures to verify residents of simplified plastic structures prescribed by the Seoul Special Metropolitan City Es. The said Corporation granted the right to move into rental apartments that can be preferentially allocated national rental housing and long-term rental housing only once to residents of simplified plastic structures in the construction area of the Bogeumjari Housing. When a new national rental housing and long-term rental housing is supplied, it is not a preferential allotment to residents of the relevant housing construction area. Such right to move into a rental apartment is impossible.

4) A △△2 district had a preferential supply of Bogeumjari housing and general supply in 2013. On September 13, 2013, 2013, in a long-term rental housing recruitment announcement (including both the △△ district and △△ district in which the instant farmland is located) of the said construction, a single household owner (a person who does not have any other household members or his spouse or lineal ascendant or descendant on his resident registration card on his own resident registration card or a person who does not have any other household member on his own resident registration card) applied for a supply of housing with an exclusive area of 40 square meters or less. As regards housing exceeding the above area, all of the household members themselves and household members (including their spouse and household members who are not registered in the same resident registration card as the former resident registration card) were eligible to apply for a long-term supply of housing with an exclusive residential area of 25 square meters or less at the time of filing an application for a long-term rental housing recruitment plan, the Plaintiff was also eligible to file an application for a long-term occupancy housing recruitment announcement with 25.

B. According to the above facts, the written statement of this case alone does not clearly indicate what is the object of the sale and what is the objective meaning of the “where the right to move in to the above goods has been revoked.” The Plaintiff asserts that, with respect to the “the right to move in to the △△△ Group 2,” which is the object of the sale, the right to move in to the △△ Group 25-type rental apartment, regardless of the party’s liability, should be interpreted to have cancelled the sales contract and refund the sales price.

C. However, in light of the aforementioned legal principles and the following circumstances revealed by the factual basis, the evidence presented by the Plaintiff regarding the motive, circumstance, purpose, transaction practice, etc. of the instant contract cannot be accepted as it is, solely based on the evidence presented by the Plaintiff.

1) Pursuant to relevant Acts and subordinate statutes, the Seoul Special Metropolitan City SP Corporation grants a resident of a simple plastic structure in the construction area of a Bogeumjari Housing and designated as a preferential supplier of a rental apartment on one occasion a right to be allocated a rental apartment on one occasion without distinction between the area subject to the preferential supply of a rental apartment or a residential area. Preferred to the applicant for the preferential supply is limited to the usual type that can be allocated according to his/her qualification, and when the Plaintiff files an application for the qualification requirements, he/she may be allocated a rental apartment at 25 square meters. The Plaintiff is entitled to apply for the preferential supply of rental apartment supplied in another Bogeumjari Housing construction area of the said construction project. Since the Plaintiff has not yet been allocated such allocation, the Plaintiff is entitled to file an application for preferential supply of rental apartment supplied

2) The foregoing Corporation shall notify the residents of simple plastic structures in the construction area of the Bogeumjari Housing as eligible for preferential supply of rental apartments after going through prescribed verification procedures, and such eligibility is not transferable. However, each of the instant contracts was prepared before confirmation of the eligibility for preferential supply of rental apartments for the above residential farming spaces, and the Plaintiff was notified of the priority supply of rental apartments through prescribed verification procedures, and the qualification continues to be maintained.

3) According to the contents of the right to move into a rental apartment and the progress before and after the instant contract, each of the instant orders is a farmer in △2 district where the right to move into a rental apartment is to be granted, and there is room to view that the purpose of the contract has been achieved by granting the Plaintiff the right to move into

4) Each of the instant notes provides the grounds for a seller’s return of the purchase price, and the interpretation thereof seriously affects the rights and obligations of the Defendants, the content of each of the instant notes ought to be more strict interpretation. However, there is no indication of liability in cases where the area of a rental apartment that can be allocated through a preferential supply application falls short of 25 square meters. Accordingly, each of the instant notes may be construed as the residential bar, and the “where the occupancy right of the leased apartment is revoked” is not granted in cases where the leased apartment is not eligible for preferential supply.

D. On the grounds indicated in its reasoning, the lower court determined that the right to move into the instant sales contract is the right to receive “one household of 25 square-type rental apartment within the △△△△△ Housing Housing Zone,” as alleged by the Plaintiff, and that, if the Plaintiff fails to secure such right, Defendant 1 cannot be deemed to have agreed to return the purchase price received by the Plaintiff, and that the right to cancel the contract under the instant sales contract is difficult to be deemed to have occurred even when the Plaintiff was unable to preferentially sell the usual rental apartment that the Plaintiff wants due to the Plaintiff’s reasons. Although the reasoning of the lower judgment is somewhat inappropriate or inadequate, the lower court’s determination that the meaning of each of the instant sales contracts cannot be interpreted as alleged by the Plaintiff is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the interpretation of

3. 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 Park Jung-hwa (Presiding Justice)