Jeon Hong Co., Ltd. (Bae & Yang LLC, Attorneys Yang Sora et al., Counsel for the defendant-appellant)

Seoul Metropolitan Government Bus Transport Business Association (Law Firm Chungcheong, Attorneys Noh Jae-gu et al., Counsel for the plaintiff-appellant)

October 7, 2016

Seoul Central District Court Decision 2014Gahap56478 Decided August 12, 2015

1. As to the principal lawsuit, the Plaintiff’s appeal and the conjunctive claim of the Plaintiff (Counterclaim Defendant) added at the trial are dismissed.

2. As to a counterclaim:

A. Of the judgment of the first instance court, the part against the Plaintiff (Counterclaim Defendant) is revoked, and the Defendant (Counterclaim Plaintiff)’s counterclaim corresponding to the revoked part is dismissed.

B. The Defendant (Counterclaim Plaintiff)’s counterclaim added in the trial of the trial is dismissed.

3. The costs of lawsuit shall be borne by each person;

[Claim]

1. Main elements;

A. The Defendant (Counterclaim Plaintiff; hereinafter “Defendant”) shall pay 10 million won to the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) and 5% per annum from July 1, 2014 to the service date of a duplicate of the main complaint of this case, and 20% per annum from the next day to the day of complete payment.

B. (1) At the first place, it is confirmed that the defendant's claim for insurance payment against Seoul Guarantee Insurance Co., Ltd. based on the guarantee insurance contract listed in the attached list does not exist.

(2) Preliminaryly, the Defendant shall pay to the Plaintiff 5,770,793,520 won and the amount equivalent to 5% per annum from August 20, 2014 to April 14, 2016 from the date of delivery of a copy of the claim and the application form for modification of the cause of the claim as of April 14, 2016, and 20% per annum from the next day to the date of full payment (in addition, at the appellate court).

2. Counterclaim;

With respect to KRW 5,380,421,40 and KRW 3,060,892,124 among them, the Plaintiff shall pay to the Defendant 6% per annum from July 23, 2014 to August 12, 2015; and KRW 20% per annum from the next day to the date of full payment; KRW 2,34,482,201 per annum from the date of service of a copy of the application for modification of the purport of the instant counterclaim and the grounds for the instant claim to the date of full payment (extension from the appellate court).

【Purpose of Appeal】

1. The plaintiff;

(a) With respect to the principal claim:

The judgment of the first instance is revoked, and the defendant pays to the plaintiff 5,00,000 won with 5% interest per annum from July 1, 2014 to the delivery date of a copy of the main office of this case, and 20% interest per annum from the next day to the date of complete payment. It is confirmed that the defendant does not have any part exceeding 5,770,793,520 of the insurance claim against Seoul Guarantee Insurance Co., Ltd. under the guarantee insurance contract stated in the attached list, which exceeds 5,70,793,520 won.

B. As to the counterclaim:

The part of the judgment of the first instance against the plaintiff shall be revoked, and the defendant's claim corresponding to the above revoked part shall be dismissed.

2. The defendant;

Of the judgment of the court of first instance, the part against the Defendant (Counterclaim Plaintiff) that orders payment under the below shall be revoked. The Plaintiff (Counterclaim Defendant) shall pay 100 million won to the Defendant (Counterclaim Plaintiff) and 20% interest per annum from the day following the day of service of a copy of the instant counterclaim to the day of complete payment.

A principal lawsuit and a counterclaim shall be deemed simultaneously.

1. Facts of recognition;

(a) Conclusion, etc. of contracts for vicarious execution of external advertisement of urban buses;

(1) The Defendant issued a public announcement of tender on November 30, 2012 following the project explanation meeting on November 29, 2012 in order to select a total of 7,512 operating service providers of urban buses with a total of 7,512 authorized number of city buses owned by 66 Seoul metropolitan bus companies. The main contents of the tender explanation meeting and the tender announcement are as follows.

본문내 포함된 표 1. 입찰에 부치는 사항 가. 입찰 방식 : 공개경쟁입찰(조합에서 정한 예정가격 이상 최고가) 나. 입찰건명 : 시내버스 외부광고대행 운영사업자 선정 다. 입찰대상 - 총 7,512대, 66개사(일괄입찰) ※ 광고규격 : 옥외광고물 등 관리법 시행령 제19조 광고 표시면적 범위 내 ※ 광고규격 등 상세내역은 업무편의를 위한 참고자료일 뿐 현장과 다를 수 있으며, 현장과 다른 부분으로 인해 발생되는 불이익은 사업신청자의 책임임 3. 입찰제한 다. 추후 계약포기(반납)업체는 향후 계약의무 종료일로부터 3년간 시내버스 외부광고 입찰참여자격 불가 6. 입찰보증금 납부 및 귀속 가. 입찰금액(총액)의 100분의 5이상에 해당하는 입찰보증금을 현금으로 전자입찰마감시간까지 보증금 납부계좌에 납부하여야 한다. 라. 낙찰자가 정당한 이유 없이 낙찰일로부터 계약기일 이내에 계약을 체결하지 아니할 때에는 낙찰이 취소되며, 입찰보증금은 서울시버스운송사업조합에 귀속되고 이 경우 낙찰자는 부정당업자로 입찰참가자격 제한 처분을 받게 됨. 10. 계약 체결 가. 낙찰자는 매체사용료(입찰시 낙찰된 금액을 기준으로 3개월분)를 선납한 후 낙찰일로부터 지정된 기일(7일) 이내 계약을 체결하여야 함. 12. 이행보증금 납부(예치) 및 귀속 다. 낙찰자의 사정 또는 귀책사유로 계약이 중도해지된 경우, 새로운 광고대행사와 광고매체 대행계약을 다시 체결하기까지의 손해 배상 및 재계약시 수반되는 광고요금 손실분을 보전하기 위해 이행보증금 전액 서울특별시버스운송사업조합에 귀속됨. 13. 기타 유의사항 가. 입찰자는 계약조건 등 기타 입찰에 필요한 모든 사항에 관하여 완전 숙지하여야 하며, 이를 숙지하지 못 한 책임은 입찰자에게 있음. 마. 계약대수는 각 회사별 인가대수(운행대수+예비대수)로 한다. - 서울시내버스는 탄력적인 교통수요 변화에 대응하고자 요일별(토·일·공휴), 계절별 (방학기간 등) 명절기간별로 운행하는 차량대수(운행률)가 변동적임 - 현재 토요일은 약 15%, 일·공휴일은 약 27%의 운휴를 시행하고 있으며 방학기간(하절기, 동절기)에는 평일 7%, 토·공휴일 5%를 각각 추가 운휴하고, - 설·추석 명절 시에는 평균 35% 운휴를 시행하고 있음. ※ 운행대수는 정상운행대수와 단축운행대수를 포함한 것임 ▷ 정상운행대수 : 하루 종일 운행(18시간 기준) ▷ 단축운행대수 : 오전, 오후 첨두시간대에만 운행(10시간 기준) ※ 예비대수는 인가된 버스 중 약 5%(400여대)로 승객의 과밀한 노선, 고장, 정비 등 상황에 따라 투입되어 운행하는 차량을 말함. ▷ 예비투입 : 예비대수 중 약 10% 정도를 과밀지역에 정상 또는 단 축 투임, 예시된 도표에 의하면, 운행대수는 7,100대(정상운행 6,208대, 단축운행 892대), 예비대수는 412대(예비투입 41대)로 기재되어 있음.

(2) On December 20, 2012, the Plaintiff and the Defendant entered into the Seoul metropolitan bus advertising contract with the term of contract from January 1, 2013 to December 31, 2015 (hereinafter “instant agency contract”). The Plaintiff’s total amount of media user fees is KRW 512,140 per month for each authorized bus (i.e., monthly KRW 512,140 x 36 months x 7,512 x value-added tax) and entered into the Seoul metropolitan bus advertising contract (hereinafter “instant agency contract”). The main contents are as follows, and the current status and current status of the authorized number of each city bus company and the media user fees are attached to the contract:

Article 3 (Types and Quantity of Business) ① The type of business included in the main sentence shall be the external advertisement business (including Seoul Love) of the area of the city bus. ② The number of the business applied shall be the number of the companies attached to Gap which submitted written consent to use the media (including attached 1) and the number of vehicles subject to reduction of the number of the authorized vehicles shall be excluded: Provided, That in the event of changes to the route and increase or decrease between the above companies, any objection shall not be raised accordingly; ③ The number of vehicles subject to reduction of the advertising media fees shall not be requested to be reduced, etc. due to the reasons that the above companies do not temporarily operate part of the applicable number of vehicles due to flexible operation, such as soil, sand, day, holidays, and lighting, etc. during the contract period. ④ With respect to the number of vehicles reduced to the number of vehicles reduced due to changes in the traffic policies of Seoul Metropolitan Government, it shall be excluded from the number of advertising businesses from the date of authorization, and in the case of increase of the number of vehicles to be installed, the number of vehicles subject to reduction or exemption shall be refunded to the advance payment.

A person shall be appointed.

본문내 포함된 표 〈규격 2〉 ○ 외부광고 범위 확대 및 형태개선(다양화) : 표시면적은 창문 부분을 제외한 버스 측면정보영역의 유효 표기면적 범위 내에서 각 면적의 2분의 1 이내로 하며, 기존 사각형에서 사각형, 타원, 원 등 다양화와 버스 바탕색과 어울리도록 조화로운 틀을 유지(규격 및 형태 개선은 심의절차 후 이행) 제7조(매체사용료 및 매체사용료 납부 등) ① 매체사용료는 제4조 제2항 금액을 기준으로 3개월분에 해당하는 11,541,587,040원을 3개월 단위 선납으로 한다. 최초 발생 매체사용료 3개월분은 계약체결 시 납부하고, 향후 발생하는 매체사용료는 발생 전월(3, 6, 9, 12월) 20일까지 갑이 지정한 은행계좌에 입금하여야 한다. ④ 을이 제7조 제1항에 의해 기한 내에 매체사용료를 납부하지 아니할 경우에는 지연일수에 대하여 16% 대출연체금리로 연체료를 일할 계산하여 납부하여야 한다. ⑤ 을은 계약업체(경성여객 외 65개사 7,512대)가 부가세를 분기별(3, 6, 9, 12월)로 납부할 수 있도록 매 분기 말일까지 계약업체에 부가세를 지급하여야 한다. ⑥ 을은 제15조에 의해 계약 해지된 경우 및 중도 계약포기(반납)할 시 기 선납된 매체사용료는 갑에게 귀속되며, 이 경우 어떠한 이의(반환청구의 소 포함)도 제기하지 아니한다. 제8조(이행보증금) ① 을은 계약사항 이행을 담보하기 위해 이행보증금을 계약체결 후 10일 이내에 갑에게 예치한다. ② 이행보증금은 계약기간(3년) 동안 납부해야 할 매체사용료 총 금액의 3개월분에 해당하는 금액으로 한다. ③ 이행보증금은 현금 또는 정액 보상특약이 있는 이행보증보험증권으로 예치할 수 있다. ⑤ 제15조 또는 을의 귀책사유로 계약이 중도해지된 경우 잔여계약기간에 관계없이 이행보증금은 갑에게 귀속되며 이 경우 어떠한 이의(반환청구의 소 포함)도 제기하지 아니한다. 제9조(계약조건의 변경) ① 갑 또는 을이 계약기간 중 계약조건을 변경하고자 하는 경우에는 30일 전에 서면에 의한 의사표시가 있어야 하며, 별도의 문서에 의한 쌍방 합의에 의하여 계약조건을 변경할 수 있다. ② 을의 귀책사유가 아닌 연유로 인하여 계약기간에 당해 사업을 실시하지 못하는 사태가 발생할 경우 갑과 을은 상호 협의에 의하여 계약조건의 변경을 요구할 수 있다. ③ 천재지변, 버스파업 등으로 인해 정상적인 광고영업을 할 수 없는 상황이 발생할 경우 갑과 을은 협의하여 매체사용료 등을 협의 조정할 수 있다. ④ 계약기간 중 행정당국의 교통정책 변경이나 서울시내버스 교통시스템 개편 등으로 인한 인가대수 변경 시 갑과 을은 계약조건(계약대수, 매체사용료 등)을 상호 협의하여 조정할 수 있다. ⑤ 향후 시내버스 외부광고와 관련하여 정책기준 등 변경사유 발생 시 협의에 따라 계약조건을 변경할 수 있다. 제11조(금지광고물) 을은 다음 각 호에 해당하는 광고물을 시내버스 차량에 게시하여서는 아니 된다. 1. 관련 법률(옥외광고물 등 관리법, 국민건강증진법, 청소년보호법, 의료법)이나 국가시책에 반하는 광고 8. 술(주류 등), 담배 등 소비촉진을 권유하는 광고 10. 기타 공익적 차원에서 현저하게 부당하다고 인정되는 광고 제13조(사업수행에 따른 책임 부담) ② 을은 제10조, 제11조, 제12조를 위반한 광고물 적발 시 부착기간 동안 발생한 매체사용료의 15%에 해당하는 금액을 일할 계산하여 갑에게 지급하여야 한다. ④ 을의 광고물 제작 및 부착작업 시 갑의 기존시설이 훼손(시내버스 차량 도색 등)된 경우에는 을의 비용(계약 시 제출한 이행보증금 이외의 별도 비용)과 책임 하에 원상복구하여야 한다. 제15조(계약의 해지) ① 갑과 을은 다음 각 호에 해당하는 경우에는 본 계약을 해지할 수 있다. 본 계약의 해지에 관하여는 갑이 정하며, 이에 대하여 을은 이의를 제기하지 아니한다. 1. 갑 또는 을이 이 계약에서 정한 중요한 사항을 위반 또는 불이행하여 계약존속이 어려운 경우 4. 법령의 개정, 행정당국의 방침 변경, 기타 여건변화로 인하여 사업을 계속 추진하는 것이 곤란한 경우 6. 을은 제7조에 의해 납부해야 할 선납 매체사용료 납부기일을 단, 1일이라도 경과되면 갑이 일방적으로 계약을 해지할 수 있으며, 이 경우 을은 갑에게 어떠한 이의(반환청구의 소 포함)도 제기하지 아니한다. ② 제1항의 사유로 계약이 해지될 경우 이행보증금은 갑에 귀속되며, 을은 어떠한 민형사상 소를 제기할 수 없다. 제16조(손해배상) 상대방의 귀책사유로 인해 손해가 발생한 경우 손해를 배상하여야 한다. 1. 을은 을 또는 그 종사원(임시사용자 포함)의 귀책사유로 인하여 버스 시설물과 버스이용객에게 피해나 손해를 입힌 경우 이에 대한 민·형사상 모든 책임을 부담하여야 한다. 2. 제13조 제4항에 따라 손해가 발생된 경우 을의 비용과 책임 하에 원상복구 하여야 한다. 제19조(사업의 정산) 제15조 제4호 규정에 의하여 계약이 해제 또는 해지된 경우에는 매체사용료는 일할 계산방식으로 정산하여 반환한다. 단, 을의 귀책사유로 해제 또는 해지된 경우에는 선납된 매체 매체사용료는 반환하지 않는다.

B. Submission of a guaranty insurance policy

In order to deposit contract guarantee money under Article 8 of the Advertising Agency Contract on December 28, 2012, the Plaintiff entered into a guarantee insurance contract (contract) with the Seoul Guarantee Insurance Co., Ltd. as the principal contract for the instant metropolitan bus advertising contract, and submitted it to the Defendant with the guaranty insurance contract amounting to 12,695,745,744 won (3-month media user fee + value added tax). According to the insurance terms and conditions, the Seoul Guarantee Insurance Co., Ltd. provides that the damage suffered by the insured is compensated by the failure of the policyholder to perform his/her obligations or legal obligations under the principal contract, but the damage incurred by the insured’s cause is not compensated.

C. Progress of the termination of the instant agency contract by the Defendant and the Defendant

(1) On June 12, 2014, the Plaintiff, on the ground of Article 9 of the Advertising Agency Agreement on the Change of Terms and Conditions of a Contract, presented a proposal to the effect that “Nam shall pay the media user fee only to the actual number of advertisements for 12 months during the term of the contract, and if it is difficult to do so, 50% of the media user fee shall be reduced retroactively from April 2014 to the end of the year retroactively, and if possible, the PR, which is not the product promotion, is not the product promotion, shall be allowed.” In addition, in the event that the Defendant did not accept the proposal or that there is no response by June 25, 2014, the Plaintiff sent a conditional agency notice to the Defendant on the termination of the contract as of July 1, 2014 pursuant to Article 15(1)1 and 4 of the Advertising Agency Agreement.

(2) On June 17, 2014, the Defendant notified the Plaintiff that he/she could not accept the Plaintiff’s request, and urged the Defendant to implement the terms and conditions of the contract.

(3) The Plaintiff did not deposit the user fee for media for three months from July 2014 to September 2014, 2014, which is the date agreed upon. As to June 20, 2014, the Defendant, on June 23, 2014, deposited the user fee for media from July 1 to 9 (3 months) under Article 7(1) of the instant contract into the bank account designated by the Korean Union until June 20, 2014, but did not pay the user fee for media until June 20, 2014, to the Defendant for the payment of the user fee for media (including interest for arrears) under Article 15(1)6 of the Agreement, and the Defendant, on June 26, 2014, notified the Plaintiff of the scheduled repayment of the user fee for three months under Article 15(1) of the Agreement and the scheduled repayment of the user fee for urban bus to the Defendant by June 18, 2014 (including the scheduled repayment of the contract).

(4) On July 1, 2014, the Plaintiff notified the Defendant that the advertising agency contract was terminated on July 1, 2014, as stated in the above conditional termination notice.

(5) On July 15, 2014, the Defendant notified the Plaintiff that “In the event that the media user fee is not paid by July 22, 2014, the instant agency contract is terminated as of July 23, 2014, and as from July 23, 2014, the instant agency contract is prohibited from attaching all external bus advertisements,” and the Defendant notified the Plaintiff that the instant agency contract was terminated as of July 23, 2014 due to delay in payment of the media user fee, etc.

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1, Gap evidence 2-2, Gap evidence 3 and 6-1 to 4, Gap evidence 7-2 and 5-2, and the purport of the whole pleadings

2. Summary of the parties' arguments;

A. The ground and time for the cancellation of the instant agency contract

(1) Plaintiff

(A) The instant agency contract falls under the terms and conditions, and such terms and conditions should be interpreted in accordance with the Act on the Regulation of Terms and Conditions (hereinafter “Terms and Conditions Regulation Act”).

(B) The Defendant violated or failed to fulfill the obligation under the instant agency contract, such as ① delay in the project to improve the standard for drawing advertising, ② total prohibition of alcoholic beverage advertising, ③ implementation of the advertising business on board a protruding bus, ④ operation of a protruding bus, etc., which constitutes a cause for statutory termination under Article 544 of the Civil Act concerning the cause for termination of the agreement or delay of performance under Article 15(1)1 of the instant agency contract, and the Plaintiff’s breach of duty to comply with the Plaintiff’s legitimate request for consultation on change of the terms and conditions of the contract based on Article 9(1), (2), (4), and (5) of the instant agency contract.

(C) The Plaintiff suffered loss of KRW 20 billion due to the Defendant’s failure to perform the contract and aggravation of the external market situation for 18 months in which the contract was maintained, which constitutes grounds for termination due to changes in circumstances under Article 15(1)4 of the instant agency contract.

(D) Therefore, since the instant agency contract terminated on July 1, 2014 due to the Defendant’s notice of termination due to the Defendant’s nonperformance, the Defendant is obligated to pay the Plaintiff KRW 10 billion as part of the damages amounting to KRW 18,534,783,140 (i.e., KRW 8,177,528,120 + ② ② KRW 8,921,880,000 + + KRW 1,203,360,000 + ④ ④ KRW 232,015,020).

(2) Defendant

(A) The Defendant did not perform its four obligations asserted by the Plaintiff, and the instant agency contract was terminated on July 23, 2014 upon the Defendant’s notification as of July 23, 2014, due to the Plaintiff’s failure to pay the media user fee for three months in advance.

(B) Therefore, the Plaintiff is obligated to pay the Defendant the unpaid user fee of KRW 3,035,939 from July 1, 2014 to July 23, 2014.

B. The assertion regarding unjust enrichment after the forfeiture and termination of performance guarantee money

(1) Plaintiff

(A) Since the instant agency contract terminated as the Defendant’s default, there is no right to claim the payment of the guaranteed insurance against Seoul Guarantee Insurance, and there is a benefit to seek confirmation of its absence.

(B) The performance guarantee under the instant agency contract constitutes an estimate of damages, and the amount thereof shall be reduced as it loses fairness by imposing unfair pressure on the Plaintiff.

(C) Preliminary preparation for the case where the absence of verification of the right to claim the above guaranteed insurance payment is rejected as there is no benefit in verification, and ① the performance bond of this case does not include KRW 1,154,158,704 equivalent to the value-added tax on the media usage fee for three months under the instant agency contract. Since the Defendant received the insurance money including this, the Defendant is obligated to return the insurance money to the Plaintiff as unjust enrichment, nonperformance, or tort damages. ② Although the Defendant did not have the right to claim the guaranteed insurance payment, the amount equivalent to the whole or reduced portion should be returned to the Plaintiff as unjust enrichment or damages.

(2) Defendant

(A) The performance guarantee under the instant agency contract constitutes not an estimate of damages but a penalty for penalty, and thus, cannot be reduced.

(B) Since the Plaintiff obtained a benefit equivalent to the royalty by attaching an advertisement without permission even after the instant agency contract, the Plaintiff is obligated to refund KRW 2,344,482,210, which was actually acquired from July 23, 2014 to November 31, 2014, the date when the contract was terminated, to the Defendant as unjust enrichment or tort damages.

3. Determination

A. The legality of demanding confirmation of the absence of a claim for insurance money

A lawsuit for confirmation is not necessarily limited to a legal relationship between the parties, but also the legal relationship between one of the parties and a third party or between a third party. However, in order to have an interest to seek confirmation of the legal relationship, it is necessary to immediately determine the legal relationship by the confirmation judgment in order to remove any danger or omission existing in the claimant’s rights or legal status, and it should be the most effective and appropriate means (see Supreme Court Decision 2013Da30196, Dec. 12, 2013, etc.).

On August 20, 2014, the facts that the Defendant claimed the performance guarantee insurance under the contract of this case on behalf of the Seoul Guarantee Insurance and received the payment on or around August 20, 2014, and that the Plaintiff paid the reimbursement in response to the claim for reimbursement of the Seoul Guarantee Insurance. In light of this, the Seoul Guarantee Insurance already paid the guaranteed insurance and the Defendant’s claim for payment of the insurance was extinguished. In the light of this, it would be the most effective and appropriate method to remove the risks and deficiencies existing in the rights or legal status by filing a lawsuit claiming the return of the amount of reimbursement already paid to the Defendant of the performance guarantee insurance and the Plaintiff disputing the cause for payment against the Defendant of the performance guarantee insurance (see, e.g., Supreme Court Decision 2015Da206492, Jun. 11, 2015). Therefore, the part of the Plaintiff’s claim for confirmation of the absence of the claim for payment of the insurance money among the principal claim of the Plaintiff

B. Whether the defendant violated or breached the contract

(1) Whether it constitutes a standardized contract

The plaintiff asserted that the contract of this case constitutes a standardized contract and thus the Act on the Regulation of Terms and Conditions applies to the interpretation of the specific terms and conditions. Thus, according to the contents of the contract of this case which the defendant concluded with the plaintiff as to the contract of this case, it is almost similar to the advertising agency contract that the defendant concluded with the third party, and if the successful bidder does not conclude the contract within the contract date without any justifiable reasons, the successful bid is revoked and the bid bond is confiscated to the defendant.

However, regardless of its name, form, or scope, the terms and conditions subject to regulation under the Act refer to the terms and conditions of the contract prepared in advance in order to conclude the contract with multiple other parties. In other words, the following circumstances acknowledged by the aforementioned factual basis are: ① the Defendant publicly announced the subject of bidding, term of contract, method of payment of media user fee, payment of bid bond and reversion; ② the Plaintiff and the bidder participate in the bidding by stating media user fee in consideration of confirmation of the terms and conditions; ③ the Plaintiff appears to have sufficiently time to discuss the specific terms and conditions of the contract between the Defendant and the Defendant until December 20, 2012 after the contract was awarded on December 7, 2012, and the contract was concluded with the instant agency contract; ④ the Defendant’s project was affected by bus business policy, etc. by the introduction of the bus completion system on July 2004, 204, and thus, it is difficult to see that the terms and conditions of the contract were included in the agreement with the Seoul Special Metropolitan City Mayor, such as the construction of the Seoul Metropolitan City Mayor’s.

(2) (1) The delay of the project to improve advertisement standards on the face of India

(A) The plaintiff's specific assertion

As long as the advertisement specification of the “personal drawing” expanded than the previous contract terms in the instant advertising agency contract is specifically specified, the Defendant is obligated to complete the movement of the side line board before the contract term is terminated and provide an expanded advertisement area from January 1, 2013, which is the time of the contract term. However, the Defendant delayed it until November 1, 2013, and accordingly, the Plaintiff’s damage during the said delayed period may be calculated as KRW 8,177,528,120 by applying the ratio of the total size of the expanded advertisement to the fee for use of the medium.

(B) Determination

(6) The following facts and circumstances acknowledged as the whole purport of the argument as a result of fact inquiries about the advertisement site of the Seoul Metropolitan Government, i.e., the following facts and conditions, i., advertisement size and other details for convenience of business, and any disadvantage incurred by the part different from the site, are different from the site, ii) the Defendant’s construction of the Seoul Metropolitan Government notice of the construction of the advertisement site, i.e., the expansion of the advertisement site and the construction of the advertisement site of the Seoul Metropolitan Government, i., the expansion of the advertisement site and the construction of the advertisement site of the Seoul Metropolitan Government, ii) the Defendant’s construction of the advertisement site of the Seoul Metropolitan Government, i.e., the expansion of the advertisement site and the construction of the advertisement site of the advertisement site of the Seoul Metropolitan Government, i., the expansion of the construction site and the construction of the advertisement site of the advertisement site of the Seoul Metropolitan Government, i.e., the expansion of the construction site of the advertisement site of the Seoul Metropolitan Government, ii).

(2) Prohibition of any advertisement of alcoholic beverages

(A) Specific assertion by the parties

1) Plaintiff

An advertisement prohibited as being contrary to relevant Acts pursuant to Article 11 subparagraph 1 of the Advertising Agency Contract is limited to an advertisement that misleads people's awareness of health due to the excessive amount of drinking alcohol, illness treatment, and mental health of alcoholic beverages during the advertisement (Article 7 (2) 1 of the National Health Promotion Act, Article 10 (1) [Attachment 1] of the Enforcement Decree of the same Act, and Article 11 subparagraph 8 of the Advertising Agency Contract only prohibits an advertisement that solicits the promotion of consumption of alcoholic beverages (e.g., alcoholic beverages). Since the instant agency contract constitutes a standardized contract, it is not allowed to interpret that the instant agency contract constitutes a standardized contract and thus it should be interpreted favorable to the plaintiff pursuant to Article 5 (2) of the Act on the Regulation of Terms and Conditions, and thus, it is not allowed to interpret that the instant contract is "the full prohibition of advertisement of alcoholic beverages" differently from the contract expressed by the defendant.

Therefore, the Defendant’s prohibition of all advertising advertising outside the Seoul city bus constitutes breach of contract, and the Plaintiff’s damages therefrom constitute KRW 8,921,880,000 (=60,000 x 751 x 18 months) which applied 10% of the ratio of alcoholic beverage advertising in the bus outside the bus to 7,512.7,512.

2) Defendant

The meaning of Article 11 subparag. 8 of the instant agency contract ought to be deemed to be to completely prohibit the advertisement of alcoholic beverages, and even if the instant agency contract falls under the terms and conditions, it constitutes a clause that could have been anticipated by the Plaintiff, and thus, is exempt from the duty to explain.

(B) Determination

1) First, as seen earlier, the instant agency contract is not a standardized contract, and thus, the Plaintiff’s assertion premised on such contract is without merit without further review.

2) Next, the following facts are revealed: (a) the Plaintiff’s contract agreement on the advertisement of alcoholic beverages as stipulated in Article 11 subparag. 8 of the instant case is difficult to look at the scope of alcoholic beverages advertising; (b) the statement of No. 1 of the Plaintiff’s certificate and the fact-finding on the wind of the court of first instance; (c) the Seoul Metropolitan Government’s contract concluded with bus cooperatives or advertising agencies on August 17, 2012 to prohibit the front advertisement of the Seoul City bus from advertising terms and conditions; and (d) the Defendant’s agreement on the provision of No. 1 of the instant contract terms and conditions to prohibit the front advertisement of alcoholic beverages as stated in Article 11 subparag. 8 of the instant contract terms and conditions cannot be seen as having been explicitly indicated in the instant contract terms and conditions, and thus, it cannot be seen that the instant contract terms and conditions are likely to interfere with the Plaintiff’s full-time sales of alcoholic beverages, including the provision of No. 1 of the instant contract terms and conditions.

(4) Execution of protruding-type advertising business.

(A) The plaintiff's specific assertion

Protruding-type plates are included in the external advertisements or external advertisements of the Seoul metropolitan bus, which are the subject of the Plaintiff’s bid or contract, and belong to the category of “extension of the scope of external advertisements and improvement of the form (diversified)” as prescribed in Article 6(1) of the Advertising Agency Contract 2>. In addition, since the Plaintiff has the exclusive right or similar right to the external advertisements of the city bus, it constitutes a serious breach of contract to the Defendant unilaterally proceed with the protruding-type advertising business after concluding a contract without the Plaintiff’s consent or consultation with the Plaintiff, thereby infringing on the Plaintiff’s business rights, and refuse the Plaintiff’s request for suspension thereof and the change of the terms of the contract. The Plaintiff’s damage therefrom may be deemed as the amount equivalent to the revenue gained by the Defendant by implementing the protruding-type advertising business from October 22, 2013 to June 22, 2014 (i.e., 1,203,360,000 won (=7,521 x 200,8 months).

(B) Determination

The main text of Article 6(1) of the instant agency contract provides that the specification and display method of the advertisements subject to contract shall comply with the Outdoor Advertisements Control Act and the Enforcement Decree of the same Act. Article 19(1) of the former Enforcement Decree of the Outdoor Advertisements, etc. Control Act (wholly amended by Presidential Decree No. 25825, Dec. 9, 2014) provides that the display method of the external advertisements of commercial automobiles, etc. shall be displayed on the side of body except for windows (Article 1) and the display area shall not exceed 1/2 of the area of each side (excluding the portion of windows), and the display area shall not exceed 200 (Article 2). In addition, the following facts and circumstances recognized by the respective description of subparagraphs 2 and 8, subparagraph 12, and the purport of the entire pleading, namely, (i) the announcement method of selecting the operator of the instant advertisement agency shall be within the scope of the advertisement area to be indicated within the scope of the advertisement area under Article 19 of the Enforcement Decree of the Outdoor Advertisements Control Act, etc.

On the other hand, it is difficult to view that the instant agency contract was concluded on the premise that the Plaintiff was given an exclusive status to the external advertising business, solely on the ground that the Seoul Special Metropolitan City or the Defendant urged active participation by presenting the prospect for the expansion of the advertising area and the utilization of various advertising methods at the project explanation meeting for bidding, and that the instant agency contract was concluded on the premise that the Plaintiff was given an exclusive status to the external advertising business of urban buses.

(d) Operation of a bus:

(A) The plaintiff's specific assertion

In accordance with the Seoul Special Metropolitan City’s policy, the Defendant designated and operated 12 buses around April 19, 2013 among the authorized number of buses subject to the instant contract, and 33 buses as late buses around September 13, 2013. The Defendant did not comply with the obligation to modify the contract terms, such as exclusion of the number of late-time buses that cannot be deemed to have the effect of external advertising from the subject of payment of fees for the use of a medium. Accordingly, the Plaintiff’s damages therefrom amount to 232,015,020 won, which is equivalent to the fee for the use of a medium for late-time buses.

(B) Determination

The following facts and circumstances acknowledged based on the above facts, namely, ① the instant agency contract was concluded under the total contract that uniformly applies the user fee per unit without considering the actual number of contracts and the exposure limit to advertisement, ② the concept of the number of operation units and the number of spare parts in the bidding presentation data for concluding the contract and the bidding announcement, and the current status of the relevant number indicated in the bidding table. ③ Article 9(4) of the instant agency contract provides that the contract term of the instant service contract can be adjusted through mutual consultation between the administrative authority’s change in the traffic policy or the change of the number of authorized vehicles due to the reorganization of the Seoul urban bus transportation system, etc., and Article 9(3) also provides that the term of the contract can be changed according to consultation when the ground for change, such as policy guidelines, etc. regarding the external advertising of the urban bus, but it is difficult to view that the Seoul Metropolitan Government introduced the late bus service system for the convenience of citizens to be changed to the number of vehicles that were not subject to the instant agency contract or the number of vehicles subject to temporary reduction of the number.

C. Cause and time of termination of the contract, and claim for restitution of unjust enrichment by the Defendant

(1) Whether the right to terminate the contract or the right to statutory termination under Article 15(1)1 of the instant agency contract arises

B. As determined in the above paragraph, the Defendant cannot be deemed to have violated or breached four contracts, such as delay in the improvement of advertisement specification, etc. In addition, Article 9(1) of the advertising agency contract of this case merely provides for the procedures for the modification of the terms and conditions of the contract by mutual agreement, and cannot be said to have the Defendant’s right to demand the alteration of the terms and conditions of the contract or the Plaintiff’s above request pursuant to the above provision, and the occurrence of the above four conditions alleged by the Plaintiff does not constitute “a situation in which the business cannot be performed within the contract period due to the cause not attributable to the Plaintiff’s fault.” As such, it is difficult to view that the request for the alteration of the terms and conditions of the contract under Article 9(2) and (3) of the instant agency contract of this case and the adjustment of the agreement, such as the request for the alteration of the terms and conditions of the contract and the fee for media use, etc. Therefore, there is no legal ground for the termination of the contract under Article 15(1)1 of the Civil Act and Article 544.

(2) Whether the contract of this case occurred due to an agreement termination right under Article 15 (1) 4 of the contract of this case or alteration of circumstances

(A) The plaintiff's specific assertion

The Plaintiff asserts that: (a) the Plaintiff suffered loss of KRW 20 billion during the 18-month period from January 1, 2013, where the contract was maintained until June 30, 2014, due to the Defendant’s nonperformance of the contract (non-Cooperation) and the decline in domestic internal markets since April 2012, the company’s advertisement fee reduction due to the economic uncertainty, the decrease in the advertisement utility value of the company’s external advertisements due to the growth of new media, such as the Internet, mother, etc.; and (b) the rapid decrease in the demand for outdoor advertising due to the three-month crisis, etc.; and (c) the Defendant, the main agent of the public project, who is a private economic entity, committed a loss of at least KRW 20 billion during the remaining contract period to the Plaintiff, would seriously go against the good faith principle; (d) thus, the Defendant asserts that there exists a ground for cancellation of the instant agency’s amendment of statutes, changes of administrative authorities’ policy, or other changes in circumstances that make it difficult to terminate the contract.

(B) Whether the instant agency contract falls under Article 15(1)4 of the instant agency contract

According to the instant agency contract, if the contract is terminated or terminated due to a cause attributable to the Plaintiff, the user fee for media shall not be refunded in advance, but if the contract is terminated or terminated under Article 15 subparag. 4 of the instant agency contract, the user fee for media shall be calculated on a daily basis (Article 19). According to the literal interpretation of the instant agency contract, “where it is difficult to continue to implement the business due to a cause attributable to a change in circumstances, etc.,” which is listed in Article 15 subparag. 4 of the instant agency contract, refers to a cause attributable to the Defendant (or Seoul Special Metropolitan City). As such, the Plaintiff’s assertion cannot be a cause attributable to the cancellation of the contract stipulated in the above provision. Furthermore, insofar as the Defendant’s breach of contract or nonperformance is not recognized as a cause attributable to the Plaintiff’s failure to comply with the request for adjustment of the user fee for media on the grounds as seen earlier, and thus, it is difficult to deem the Defendant to continue to implement the business due to changes in circumstances or business conditions.”

(C) Whether there has occurred a right to terminate the contract due to change of circumstances

The termination of a contract due to change in circumstances occurs due to a significant change in circumstances that the parties could not have anticipated at the time of the formation of the contract, and such change in circumstances occurred due to a cause not attributable to the party who acquired the right to terminate the contract. If the binding force of the content of the contract is recognized, it is recognized as an exception to the principle of contract observance in cases where the result is substantially contrary to the good faith principle. Here, the circumstances referred to in this context refer to an objective circumstance which served as the basis of the contract, not to mean a subjective or personal circumstance of one party. Furthermore, even if a circumstance which is not the basis of contract formation changes later and causes damage to one party as a result of a failure to achieve the intended purpose of the contract at the time of the contract, barring any special circumstance, maintaining the validity of the contract as it is cannot be deemed as contrary to the good faith principle (see Supreme Court Decision 2004Da31

As to the instant case, the following circumstances, which are acknowledged in full view of the purport of the entire pleadings as a whole, namely, (i) the instant agency contract with respect to Defendant 4’s nonperformance of obligation asserted by the Plaintiff, appears to have been anticipated as the Plaintiff, and (ii) it is difficult to deem that the Plaintiff’s assertion alone requires the Defendant to respond to the request for reduction of media usage fees; (iii) bus external advertising business is affected by the external market situation due to its characteristics, and thus, the Plaintiff was entering into the instant agency contract with the burden of risk of loss; (iv) in light of the fact that the business loss occurred due to the aggravation of the external market situation, and the media user fee set by the new agency was lower than that of the Plaintiff, it is merely the Plaintiff’s subjective or personal circumstance. Unlike the Plaintiff’s originally anticipated market situation, recognizing the binding force of the instant agency contract solely on the ground that the Plaintiff suffered a large loss due to a change in the market situation, cannot be said to violate the principle of good faith.

(3) The time of termination and termination of the contract, and the validity of the defendant's claim for restitution of unjust enrichment

(A) In order for a contract to be terminated, as in the case of a general contract to be agreed, the conflicting declaration of intent between the offer and the acceptance of the contract is required to be agreed. However, since the contract can be agreed upon implicitly as well as explicitly and explicitly, it is reasonable to interpret that the contract is terminated implicitly by mutual consent between the parties to the contract, in cases where the lack or renunciation of the parties to the contract is objectively consistent with the intent expressed in both parties’ act of expressing their intent (see Supreme Court Decision 2014Da213684, Jul. 14, 2016).

(6) On the ground that the Plaintiff’s 2-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-6-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-7-77-77-77-77-8-7-14-7-7-7-7-7

(B) If so, the part of the Defendant’s claim for payment of media user fees equivalent to KRW 3,035,939,199, which is based on the premise that the instant agency contract was terminated on July 23, 2014, is without merit.

(d) nature of the performance guarantee and propriety of the claims of both parties accordingly;

(1) Character of performance guarantee

Since penalty is presumed to be an estimate of the amount of compensation for breach of contract under Article 398(4) of the Civil Act, special circumstances should be asserted and proved in order for the penalty to be interpreted as a penalty for breach of contract. In addition to the names and phrases used in relation to the penalty at the time of concluding the contract, the economic status of the contracting party, details and contents of the contract, the course of negotiations, the details and negotiation of the agreement for the penalty, the principal purpose of the contract, the nature of the obligation to guarantee performance through the penalty, whether a party may separately claim damages other than penalty in the event of nonperformance of contract, whether the penalty can be claimed in addition to the penalty, the amount of the penalty or the ratio of the amount of the penalty to the total amount of the liability, the size of the damages anticipated to be caused by the nonperformance of contract, and the transaction practices at the time, etc. shall be reasonably determined (see Supreme Court Decision 2012Da659

In light of the following circumstances which are acknowledged as being comprehensively based on the purport of the entire pleadings in the public announcement of the instant agency contract, i.e., ① “where the contract is terminated due to the situation of the successful bidder or any cause attributable to him, the full amount of the performance bond shall belong to the Defendant in order to compensate for damages incurred by the new event of the advertising counter, and the advertisement fee incurred by the contract to conclude the contract again,” ② where damage or damage is inflicted on bus facilities and bus users under Article 16 of the instant agency contract, there is only a provision that the Defendant shall bear the liability for damages incurred by the damage of the existing facilities during the production and installation of advertisements, and there is no provision that the Defendant may claim damages separately from the performance bond due to the termination of the instant agency contract, ③ the parties are forced to perform the contract by means of the performance bond, and the issues that may occur in the future, it is reasonable to deem that the performance bond has the nature of the liquidated damages.

(2) Determination on the plaintiff's claim for refund of performance guarantee

(A) The Plaintiff asserts that the performance guarantee amounting to the fee for the use of the medium for three months shall be borne by the Plaintiff as excessive damages, and that the Plaintiff shall not be fair in violation of the good faith and good faith as a provision unfairly unfavorable to the Plaintiff. Since the performance guarantee amount equivalent to the fee for the use of the medium for three months is invalid by Article 6 and Article 8 of the Act on the Regulation of Terms and Conditions, the Defendant shall return the insurance amount equivalent

However, as examined in the following sub-paragraph (b), the instant performance guarantee does not require the Plaintiff to pay excessive damages, and as seen earlier, the instant performance guarantee contract is not a standardized contract. Therefore, the Plaintiff’s above assertion is without merit.

(B) The Plaintiff asserts that the estimated amount of damages should be reduced as the performance bond, by taking advantage of the superior position of the Defendant’s exclusive authority over the intracity bus advertising services. However, the Plaintiff concluded the instant agency contract in response to bidding, i.e., the following circumstances acknowledged by comprehensively considering the overall purport of the pleadings. ① The Plaintiff’s performance bond is calculated based on the media user fee submitted by the Plaintiff. ② As seen earlier, if the instant agency contract is terminated, it appears that the bid bond was prescribed to compensate for damages incurred by the new event of the advertising and the re-contract contract, and damages incurred by the event of the conclusion of the contract. ③ In fact, the instant agency contract was concluded on June 30, 2014 with the Defendant’s property communication, and the Plaintiff also concluded a new agency contract for 20% of the estimated amount of damages for 19% of the estimated amount of damages for 30% of the total amount of damages to be paid to the Defendant’s property and the Defendant’s new agency contract for 30% of the estimated amount of damages for 16% of the advertising contract.

(C) The Plaintiff asserts that the performance bond under the instant agency contract is KRW 11,541,587,040, which is the media usage fee for three months other than value-added tax, and that the Defendant paid the amount including value-added tax as the performance bond and received insurance money equivalent to KRW 12,695,745,744, which is the performance bond, including value-added tax, from the Seoul Guarantee Insurance. Thus, the Defendant is obliged to return the amount equivalent to value-added tax, as the nonperformance of obligation, tort or unjust enrichment, to the Plaintiff.

According to the instant agency contract, “a performance bond shall be the amount equivalent to the total amount of the user fee of the media that shall be paid during the contract period (Article 8(2)), and the media user fee shall be paid in advance for three months (Article 7(1)).” However, separate provisions are prescribed in the instant agency contract and the public announcement of tender. According to the public announcement of tender, the successful bidder shall deposit the performance bond amounting to three months (including additional tax) in cash, within ten days after concluding the contract with the insurer under the Insurance Business Act or the bank guarantee certificate. Accordingly, in light of the fact that the Plaintiff entered into the contract with the Seoul Guarantee Insurance and the Defendant with the guarantee insurance policy for performance for three months (including value-added tax), the amount of the performance bond equivalent to three months (12,695,745,7444), including value-added tax, and the amount of value-added tax for three months (12,69,745,744) shall be the amount of the purchase of the contract and submitted the guarantee insurance policy to the Defendant.

(D) If so, the plaintiff's claim seeking the return of all or part of the performance guarantee is without merit.

(3) Judgment on Defendant’s unjust enrichment or claim for damages

The Defendant, separate from performance guarantee, seeks payment of KRW 2,34,482,210, which was actually gained by the Plaintiff from July 23, 2014 to November 31, 2014 after termination of the contract due to unjust enrichment or tort, will be examined.

The aforementioned facts and evidence Nos. 19-1 through 13 comprehensively consider the purport of the entire pleadings, namely, ① there is no provision on compensation for damages other than forfeiture of the performance bond with respect to damages caused by the termination of the instant agency contract; ② as seen earlier, it does not state what the performance bond is expected to incur damages to the instant agency contract; and ② in the public announcement of tender, it is nothing more than an example clause for damages expected to incur damages to the new advertising substitute, advertising media, and advertising charges incidental to the re-contract contract. However, the instant performance bond is nothing more than an example clause for damages anticipated to cover all damages incurred after the contract was terminated. ③ Although the Plaintiff attempted to remove the bus advertising after the termination of the instant agency contract, it is nothing more than an amount of the performance bond or the amount of the performance bond to be returned to the Plaintiff without considering the above fact that the performance bond was no more than 4 months after the termination of the contract, the Defendant’s claim for compensation for damages was no more than 2 months after the termination of the contract, and the Defendant’s claim for compensation for damages was no more than 3 months after the contract termination of the contract.

4. Conclusion

If so, the part of the plaintiff's claim for confirmation of the absence of the claim for insurance money out of the principal lawsuit of this case, including the claim modified or added in the trial, shall be dismissed, and all of the plaintiff's remaining principal lawsuit and the defendant's counterclaim shall be dismissed as it is without merit. The judgment of the court of first instance is unfair in part, and it is so modified

Judges Cho Han-chul (Presiding Judge)

(1) The Defendant (Counterclaim) stated the purport of the appeal as follows: “The part against the Defendant (Counterclaim Plaintiff) during the judgment in the original instance is modified as follows. The Plaintiff (Counterclaim Defendant) stated that the Defendant (Counterclaim Plaintiff) shall pay KRW 100,000,000 and delay damages therefor, but the Defendant (Counterclaim Plaintiff) shall be first written as above.”

2) If the instant agency contract is terminated after the lapse of July 1, 2013, after the advance payment of the user fee for the media for three-month portion, on June 20, 2013, the period of advance payment, and even after the lapse of July 1, 2013, not only the advance payment of the user fee for the media, but also the performance guarantee corresponding to the three-month portion, also belongs to the Defendant.