[1] Where there is a defect in the so-called public contract procedure to which a local government is a party pursuant to the "Act on Contracts to which the State is a Party", the standards for interpreting that the determination of the successful bidder according to the relevant tender or the contract concluded based on the determination of the successful bidder

[2] The case holding that in the tendering procedure for concluding a contract under the Enforcement Decree of the Act on Contracts to which the State is a Party, it is difficult to view that the defect not submitted a “tender” as notified in the proposal letter publicly notified by the local government is a serious defect as being “not arriving in the bidding place” under Article 44 subparag. 3 of the Enforcement Rule of the same Act

[1] The so-called public contract to which a local government is a party pursuant to the "Act on Contracts to which the State is a Party" as applied mutatis mutandis under the Local Finance Act is a private economic entity and is concluded at an equal position with the other party as the subject of the private economy, and its essential content does not differ from a contract between the private parties. Thus, the principle of private autonomy and freedom of contract applies as it is, except as otherwise expressly provided in the relevant Acts and subordinate statutes. Thus, even if there is a defect in the submission of a tender in the tendering procedure for the conclusion of a contract, if the intent of the tender is clearly expressed by other documents and the purpose of submitting a tender is not entirely damaged because there is no problem in the examination and other bidding procedure, the tender does not become null and void as a matter of course. However, if the defect is so serious to the extent that the public nature and fairness of the bidding procedure may be considerably infringed, or if the other party knew or could have known such a situation, it is obvious that the decision of a successful bidder who implied the defect and the conclusion of a contract would be detrimental to good morals and other social order.

[2] The case holding that in the tendering procedure for concluding a contract under the Enforcement Decree of the Act on Contracts to which the State is a Party, it is difficult to view that the defect not submitted a "tender" as notified in the proposal letter publicly by the local government is a material defect to be "not arriving in the bidding place" under Article 44 subparagraph 3 of the Enforcement Rule of the same Act

[1] Article 105 of the Civil Act, Article 39 (1) of the Enforcement Decree of the Act on Contracts to Which the State is a Party, Article 44 subparagraph 3 of the Enforcement Rule of the Act on Contracts to which the State is a Party / [2] Articles 39 (1) and 43 of the Enforcement Decree of the Act on Contracts to which the State is a Party, Article 44 subparagraph 3 of the Enforcement Rule of the Act on Contracts

[1] Supreme Court Decision 2001Da33604 decided Dec. 11, 2001 (Gong2002Sang, 256)

Masan-si (Attorney Jin-Jin, Counsel for defendant-appellant)

Central Port Business Co., Ltd. and two others (Law Firm Pacific, Attorneys Kang Yong-tae et al., Counsel for the plaintiff-appellant)

Gino system (Attorney Go-chul et al., Counsel for defendant-appellant)

Busan High Court Order 2005Ra146 dated January 10, 2006

The order of the court below is reversed, and the case is remanded to Busan High Court.

The grounds for re-appeal by the obligor and the Intervenor (hereinafter referred to as the “ Intervenor”) are also examined.

1. Summary of the original judgment

In full view of the adopted evidence, the court below found that the debtor submitted the tender by contract conclusion method pursuant to Article 43 of the Enforcement Decree of the Act on Contracts to Which the State is a Party (hereinafter “State Contract Act”), the person who intends to participate in the tender shall submit a tender registration and a proposal, and shall seal one copy of the price tender document in addition to the technical proposal and the draft proposal, and publicly announce that Article 39 of the Enforcement Decree of the State Contracts Act, Article 44 of the Enforcement Rule of the State Contracts Act, and Article 44 of the Enforcement Rule of the State Contracts Act shall apply to the tender in this case. The price proposal is set as a document attached to the written request for the tender issued by the debtor to the person who intends to participate in the tender. The above tender was registered by the joint supply and demand organization (hereinafter “contractor”) of the intervenors and four joint contractors such as joint contractors, etc., and the debtor first reviewed the technical proposal submitted by each of the intervenors and joint contractors on April 25, 2005, and each of the intervenors submitted the tender price proposal.

Based on the above facts, the court below determined that the intervenor's tender is null and void on the premise that the intervenor's tender is valid on the premise that the intervenor's tender is designated as priority negotiation object and that the contract entered into with the participant is invalid on the basis that the intervenor's tender is valid. Article 39 (4) of the Enforcement Decree of the State Contracts Act provides that "the bidder shall submit a tender directly at the place and time indicated in the public notice of tender." Article 39 (1) of the Enforcement Decree of the State Contracts Act provides that "the participant's tender fails to submit a tender at the time and on the date and time indicated in the public notice of tender."

2. The judgment of this Court

However, we cannot accept the judgment of the court below for the following reasons.

A. The record reveals that the debtor's notice of the presentation of the proposal as of January 12, 2005 regarding the tender of this case requires the debtor to seal and submit the "price bidding document" as one of the proposals for bidding 6.c. (2) and 9.e., the debtor requires the debtor to accurately prepare and submit a proposal in accordance with the form of the proposal published for the bidding of this case. For this purpose, the letter of proposal published on the Internet homepage is accompanied by a separate form of the document stating "tender document", "price proposal" and "calculated basis for calculating the amount." Among them, the form of the proposal is to be accompanied by a document stating the price proposal as of January 12, 2005. The above three documents should be combined with a document stating the basis for calculating the amount in the form of the proposal, and eventually, it can be seen that the document should be combined with a single document stating the meaning of the document as a single document and a single document stating the entire document as 20.2.

Therefore, as acknowledged by the court below, if the intervenor submitted the documents combined with two documents by omitting the documents in the tender form among the three documents when submitting the proposal document, such documents shall be deemed incomplete documents combined with two documents only, and if part of the documents is submitted, it shall not be deemed the same as the case where the tender is not submitted at all, and it shall be reasonable to deem that there is any defect in the submission of the tender document. Whether such a tender should be invalidated pursuant to Article 39(4) of the Enforcement Decree and Article 44 subparag. 3 of the Enforcement Rule of the same Act shall be determined by whether such defect is significant to deem "the tender document to be "not arrived at the bidding place" as stated in the above Rules.

B. The so-called public contract to which a local government is a party pursuant to the State Contracts Act, which is applied mutatis mutandis under the Local Finance Act, is a contract under private law entered into with the other party as the subject of private economy and its essential content is not different from a contract between private persons. Thus, the principle of private autonomy and freedom of contract shall be applied as it is, except as otherwise provided in relevant Acts and subordinate statutes. Thus, even if there is a defect in the submission of a tender in the tendering procedure for the conclusion of a contract, if there is a defect in the presentation of a tender in other documents, and the purpose of allowing the tender to be submitted is not entirely damaged, the tender does not become null and void as a matter of course. However, if the defect is so serious that the public nature and fairness of the tendering procedure may be considerably infringed, or if it is evident that the other party knew or could have known of such a defect, or that the determination of a successful bidder who implied such defect and the conclusion of a contract would result in a violation of good morals and other social order, it shall be interpreted to be null and void only under special circumstances.

With respect to this case, each form of the tender document and the price proposal posted in the written request for proposal is almost overlapping with its main contents. However, compared to the fact that the 4th tender document stating the intent of the tender is printed in the same text and the tender price is generally stated, the price proposal does not have the same text as printed, and there is a difference to the extent that the tender price is separately stated in each sector. The method of the successful bid of this case requires the selection of the successful bidder through the examination and negotiation in accordance with the evaluation criteria specified in the tender documentation, i.e., the mere mere fact that the 4th tender document and the tender price proposal were not submitted in the form of the tender document stating the intent of the participant, and there is no special reason to view the defect in the tender document as a material omission in the tender documentation or other document stating the intent of the participant as a material omission in the tender documentation. Furthermore, it is difficult to view that the remaining form of the tender tender document and other document were submitted in the form of the tender tender tender document to the extent that the participant did not explicitly submit the tender documentation.

C. Nevertheless, the lower court determined otherwise that the omission of documents in the tender form by the Intervenor in submitting the proposal for the instant tender constitutes Article 39(4) of the Enforcement Decree of the State Contracts Act and Article 44 subparag. 3 of the Enforcement Rule of the same Act, and thus the tender becomes null and void. In so doing, the lower court’s order did not err by misapprehending the State Contracts Act and the legal principles on the validity of the tender procedure, and the ground for reappeal pointing this out has merit.

3. Conclusion

Therefore, the order of the court below is reversed without examining the remaining grounds for reappeal, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Shin-chul (Presiding Justice)