(a) Legal nature and period for exercising the right to complete trade reservation;

(b) the starting point of the exclusion period, in cases where there is an agreement on the timing for exercising the right of termination of trade reservation.

(a) a right which would become effective as the other party to a trade by expressing his/her intention of completion of the trade reservation, i.e., the right to conclude the trade reservation, if any, shall be a kind of right to form and exercise within such period, if any, or within 10 years from the time when the reservation is made, if no, and upon the expiration of such period, the right to complete the trade reservation shall be extinguished by the lapse of the exclusion period;

B. The purpose of the exclusion period is to promptly determine legal relations by allowing a right holder to exercise his/her right as soon as possible. As such, unlike that the extinctive prescription brings about the effect of extinction due to the passage of a certain period and the non-exercise of a right, the passage of that period itself would bring about the effect of extinction of a right. Thus, barring any special circumstance, the starting point of running the period is when a right arises in principle, and even if a special agreement is made between the parties on the timing to exercise the right to conclude a pre-contract for sale and purchase, the exclusion period shall not be deemed to expire at the expiration of 10 years from the date on which the initial right comes into existence, but shall not be deemed to extend from the expiration

Articles 162 and 564 of the Civil Act

A. Supreme Court Decision 91Da44766, 44773 delivered on July 28, 1992 (Gong1992, 2552). Supreme Court Decision 92Da4666 delivered on October 13, 1992 (Gong1992, 3125) 92Da52795 delivered on July 27, 1993 (Gong193Ha, 2397)

[Judgment of the court below]

Appellee, Attorney Kim Tae-tae, Counsel for the defendant-appellant

Gwangju District Court Decision 93Na6405, 6849 (Counterclaim) Decided April 7, 1994

The appeal is dismissed.

The costs of appeal shall be assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, on May 1, 1980, the court below acknowledged that the plaintiff (Counterclaim defendant; hereinafter the plaintiff) entered into a pre-sale agreement with the defendant (Counterclaim plaintiff; hereinafter the defendant) on the land of this case with the price of 10 million won on May 1, 1980, and made a provisional registration of preservation of the right to claim transfer on the ground of the above pre-sale on the 13th of that month. On August 6, 1992, the court below rejected the plaintiff's first claimant's right to conclude the provisional registration of this case based on the provisional registration of this case, which the plaintiff sought for completion due to the delivery of a copy of the complaint of this case on August 6, 1992, on the ground of the completion of the provisional registration of this case, the right to conclude the purchase and sale of the land of this case had expired since May 1, 190, which was the date of the above pre-sale, and rejected the plaintiff's claim for exclusion of the above provisional registration of this case.

2. The gist of the grounds of appeal is that since there was an agreement between the plaintiff and the defendant on August 19, 1980 that the right to complete the above reservation should be exercised from March 26, 1985, the exclusion period of the right to complete the reservation should be deemed to have expired on March 25, 1995, when 10 years have elapsed since that right to complete the reservation.

However, the right which may become effective as a result of the other party’s expressing his/her intent to complete the sale and purchase agreement, i.e., the right to complete the sale and purchase agreement, if it is a sort of right to form and exercise the period of exercise between the parties, and if there is no such agreement, it shall be exercised within 10 years from the date of establishment of such agreement, and if such period expires, the right to complete the reservation shall be extinguished due to the lapse of the exclusion period (see Supreme Court Decision 91Da4476, 4473, Jul. 28, 1992). The purpose of the exclusion period is to promptly determine legal relations by allowing the right holder to exercise the right as soon as possible. Unlike the lapse of a certain period and the absence of the right, the extinctive prescription is to bring about the effect of extinction of right merely by the lapse of such period, and thus, the right to begin with the lapse of 10 years from the expiration of the initial period of sale and purchase agreement cannot be seen as being beyond the exclusion period of 10 years from the expiration of the right.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the plaintiff-Appellant (Counterclaim defendant). It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)