[1] The case holding that in a case where a separate settlement agreement was reached as the difference between a transferor and a transferee was narrow in view of the existence of a separate settlement agreement between a transferor and a transferee in the course of concluding a business transfer and takeover agreement, it cannot be deemed that there was a significant imbalance between the transferor's payment and the transferee's payment in return for the balance

[2] The elements for establishing a declaration of intent by duress and the standard for determining illegality of coercions that give notice of harm

[3] The case holding that it cannot be viewed as an "Notice of Illegal Harm" under all circumstances that the contract was rescinded to the effect that it can claim damages by cancelling the contract

[1] The case holding that, in a case where the settlement of accounts was concluded when concluding a contract on the transfer and acquisition of all stocks of taxi transport business, where the balance is paid after settling accounts for the company's credit and debt, but the difference between the transferor and the transferee is narrow and thus a separate settlement was reached, the above settlement agreement cannot be deemed to constitute an unfair legal act on the grounds that all circumstances arising out of the fact that there is a significant imbalance between the transferor's payment and the payment of the transferee, who is the benefit in return, under

[2] In order to constitute a declaration of harm by duress, it should be the one that the other party made a fear and expression of harm due to the other party’s unlawfully notifying the harm. Here, in order to commit an unlawful act of coercioning certain harm, it should be deemed to fall under the case where the profit pursued by the notice of harm and injury is not justifiable, the content of harm and injury notified to the other party as a means of coercion violates the legal order, or it is inappropriate as a means to achieve the profit pursued by the notice of harm and injury in light of the transaction concept and overall circumstances.

[3] The case holding that it cannot be viewed as an "Notice of Illegal Harm" under all circumstances that the contract was cancelled to the effect that it can claim damages

[1] Article 104 of the Civil Act / [2] Article 110 (1) of the Civil Act / [3] Article 110 (1) of the Civil Act

[1] Supreme Court Decision 2006Da4199 Decided December 24, 2008 / [2] Supreme Court Decision 99Da64049 Decided March 23, 2000 (Gong2000Sang, 102Da73708, 73715 Decided May 13, 2003 (Gong2003Sang, 1286)

Plaintiff (Law Firm Roon, Attorneys Lee Dong-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Law Firm Jeon, Kim & Lee, Attorneys Shin Hyun-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2008Na23943 decided August 27, 2009

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. The judgment of the court below

(a) Facts of recognition;

On October 12, 2004, Defendant 1 entered into a contract for acquisition (hereinafter “instant contract”) with co-defendant 2 of the first instance trial, one’s own fault (hereinafter “Defendant Company”) with the representative director and the largest shareholder of the Defendant Company (hereinafter “Defendant Company”) with the Plaintiff and the Defendant Company with the total transfer price of KRW 3 billion with respect to all the taxi transportation business license and stocks at KRW 3 billion. On the same day, the Plaintiff paid the down payment of KRW 300 million and the intermediate payment of KRW 1.2 billion with the Plaintiff around October 31, 2004, and acquired the management right of the Defendant Company from November 1, 2004, and Defendant 1 was appointed to the representative director of the Defendant Company on November 22, 2004.

Upon entering into the instant contract, the Plaintiff and the Defendant, etc. paid the remainder after deducting tax and public charges and vehicle installment charges, and offsetting the claims and obligations of the Defendant Company. The Plaintiff claimed 89,027,256 won, deducting the difference between the amount of the obligation and the amount of the claim (173,449,564 won - 2,371,89,891,685 - 166,648 won) from the difference between the amount of the obligation and the amount of the claim (1,50,679,657,037 won) and the remainder of 1,560,000 won were not narrowed.

On January 28, 2005, the Plaintiff, along with Nonparty 1, 2, 3, and 4, who was a director and auditor of the Defendant Company, agreed with the Defendant, etc. on January 28, 2005, including that the Plaintiff returned KRW 100 million to the Defendant Company, and that the Plaintiff returned KRW 300 million to the Defendant Company as the deposit money for the garage lease (hereinafter “instant settlement agreement”), and paid KRW 10 million to the Defendant Company and KRW 300 million to the Defendant Company, respectively.

B. Determination

(1) Whether an unfair legal act was done

In the instant case, ① the Plaintiff was unable to reach an agreement with the Defendant Company on the settlement of accounts due to the Plaintiff’s failure to pay the remaining amount of KRW 150,600,00 to the Defendant Company’s settlement of accounts, and the Plaintiff was entitled to receive KRW 89,027,236 if the Plaintiff was to deduct the remaining amount from the Plaintiff’s settlement of accounts. However, the Plaintiff paid KRW 100,000 to the Defendant Company for the remaining amount of KRW 70,000,000,000,000, which would not have been paid for the remaining amount of KRW 50,000,000,000 to the Defendant Company’s settlement of accounts. However, in light of the fact that the Plaintiff’s settlement of accounts would have been denied, the Plaintiff would not be obliged to pay the remaining amount of money to the Plaintiff, which would have been subject to the Plaintiff’s settlement of accounts due to the Plaintiff’s non-party 1’s non-party 2’s failure to pay the outstanding amount of taxes.

(2) Whether a legal act was done by duress

Even if the settlement agreement of this case does not constitute an unfair legal act, the defendant, etc. may legally address the obligation to pay the balance under the contract of this case and return part of the paid amount, and may claim a huge amount of damages by cancelling the contract of this case. Thus, the defendant, etc. threatened with recognizing the settlement of accounts prepared by the defendant, etc., and agreed not only to waive the obligation to pay the balance, but also to pay 400 million won to the defendant. Thus, the settlement agreement of this case constitutes a legal act by coercion.

2. Judgment of the Supreme Court

A. The lower court’s determination that the instant settlement agreement constitutes an unfair legal act is difficult to accept for the following reasons.

The unfair legal act stipulated in Article 104 of the Civil Act is established when there exists an objective imbalance between payment and benefit in return, and a transaction which has lost balance as a subjectively, is conducted using flag, rashness, or inexperience of the party affected by the transaction. Thus, in order to deem the settlement agreement of this case null and void as an unfair legal act, there is a significant imbalance between the plaintiff's benefit and the benefit of the defendant et al. (see Supreme Court Decision 2006Da4199, Dec. 24, 2008).

We examine the above 1.b. (1) through 4, which is the basis of the settlement agreement of this case as an unfair legal act.

First of all, it appears that the Plaintiff was able to receive a certain amount from the Defendant, etc. at the time of settling the balance. However, the Plaintiff, the Defendant, etc., once the contract of this case was concluded in the manner of “number of vehicle registration x the price per vehicle”, and the down payment and the intermediate payment are specified and paid, and the amount of the down payment and the intermediate payment should be paid after the settlement of all kinds of claims and obligations of the Defendant company through the actual inspection (Article 5 of the contract of this case). As the result of settling the balance, the Defendant, etc. does not necessarily have to pay a certain amount to the Plaintiff. Rather, there may be cases where the Plaintiff, etc. should return a certain amount of the down payment and the intermediate payment already received by the Plaintiff. Therefore, the grounds of the lower court’

2) The following points are understood to the purport that the parties to the instant settlement agreement did not refer to the omitted amount of sales, but to the phrase “tax, etc. to be imposed on the Defendant Company due to the omission of sales.” This part of the judgment of the court below is to the effect that “where the amount of tax to be imposed is deducted from the balance on the ground that there is an omission of sales under paragraph (1) of the instant settlement agreement, the Defendant, etc. should bear the tax to be imposed later, but Article 4 of the instant settlement agreement provides that the Plaintiff shall bear the tax to be imposed later, etc., and as a result, the Plaintiff shall also be deducted from the balance and bear the tax to be incurred later, and as such, Article 1 of the instant settlement agreement provides that “the amount of tax that differs from the corporate settlement is recognized by the transferee’s statement of accounts.” As for other detailed items of the settlement of accounts, the Plaintiff shall be deemed to have agreed to be liable for the remaining amount of tax to be imposed on the Plaintiff on the grounds that there is no omission or omission of the tax revenue from the transfer date.”

③ In addition, the lower court is understood to the effect that “The Defendant, etc. asserted the reduction of the remainder on the ground that it is not subject to the balance settlement from the beginning, and the actual lease deposit is not more than KRW 50 million, not the Defendant, etc. who claims the return of the remainder.” First, as to whether the lease deposit for a garage is subject to the balance settlement, it is an essential facility for the public health company and the taxi company, and it is reasonable to regard “the right to return the lease deposit for the Defendant company’s entire business rights” as part of the “property”, and it is reasonable to view that the Plaintiff was included in the “property” as the object of the instant contract. In light of the fact that the Plaintiff, etc. did not have the obligation to maintain the building and the present condition of the building in question by the date of the instant contract 000,000,000 won, and that the Plaintiff received the lease deposit from Nonparty 1, 200,000,000,000 won from the Plaintiff or the Defendant company.

As such, the Plaintiff and the Defendant agreed to return KRW 300 million again to the Defendant Company on the premise that the amount of the real lease deposit was hidden by the Plaintiff, and that the deposit amount was KRW 300 million upon the instant settlement agreement and that the Plaintiff had received the return at will. Thus, if the parties agreed to the return on the premise that the deposit amount was KRW 300 million, its effect should be recognized.

Finally, the judgment of the court below on the issue of ④ is understood as an explanation on the items other than the above "amount omitted of sales" and "security deposit for the lease of a vehicle in notice," but it is difficult to find the grounds for such judgment of the court below even if examining the records in detail. Nevertheless, it is difficult to understand that the court below's abstract decision without presenting any specific grounds that "the settlement of accounts presented by the defendant is not contrary to the purport of the contract of this case in the specific account, or unreshed without any grounds."

Ultimately, all of the circumstances indicated by the lower court based on the fact that there is a significant imbalance between the Plaintiff’s benefit and the Defendant’s benefit in return for the settlement of accounts are not acceptable. Thus, the settlement agreement of this case cannot be deemed to constitute an unfair juristic act without further examining the legitimacy of the fact that the Defendant et al. used the Plaintiff’s poor condition. Nevertheless, deeming that the settlement agreement of this case constitutes an unfair juristic act cannot be deemed to constitute an unfair juristic act by misapprehending the legal doctrine on unfair juristic act, thereby adversely affecting the conclusion of the judgment.

B. We cannot accept the lower court’s determination that the instant settlement agreement constitutes a juristic act by coercion.

In order for a declaration of harm to be a declaration of harm by coercion, the other party should have made a fear and expression of harm due to the other party’s unlawfully notifying of a certain harm. Here, in order to make a threat of harm unlawful, it shall fall under cases where the profit pursued by the threat of harm and injury is not justifiable in light of the transactional concept and overall circumstances at the time of the coercion act, or where the content of harm and injury notified to the other party as a means of coercion violates the legal order, or where the notice of harm and injury is inappropriate as a means to achieve the profit pursued by the threat of harm and injury under the transactional concept (see Supreme Court Decision 9Da64049 delivered on March 23,

In the instant case, even though the Defendant et al. told the Plaintiff that the omission of sales amount, etc. can be legally problematic and claim damages through the rescission of the instant contract, in light of the overall circumstances of the instant case, it cannot be deemed as an “an illegal threat of harm and injury.” Nevertheless, the lower court did not err by misapprehending the legal doctrine on declaration of intent by coercion under Article 110 of the Civil Act, thereby adversely affecting the conclusion of the judgment.

3. Conclusion

Therefore, the judgment of the court below is reversed, 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 Lee Hong-hoon (Presiding Justice)