Whether loss of business caused by a defect of a product is subject to the Product Liability Act (negative)

Product liability is a liability for damages caused to a manufacturer, etc. in the event of any loss of life, body, or property due to a defect that is normally expected to cause a product, and the "property damage incurred only to the manufactured product" is excluded here (Article 3 (1) of the Product Liability Act).

In addition, the "property damage only caused by the manufacture" includes not only the property damage itself caused by the product but also the loss caused by the business loss caused by the defect of the product, so the damage caused by the damage is not subject to the Product Liability Act.

Article 3(1) of the Product Liability Act

Supreme Court Decision 97Da26593 delivered on February 5, 1999 (Gong1999Sang, 434) Supreme Court Decision 98Da35525 delivered on July 28, 2000 (Gong200Ha, 1923)

Hyundai Marine Fire Insurance Co., Ltd. (Attorney Park Sung-won et al., Counsel for the plaintiff-appellant)

Hyundai Embs Co., Ltd and one other (Bae, Kim & Lee LLC et al., Counsel for the defendant-appellant)

Hyundai Construction Co., Ltd (LLC, Kim & Kim LLC, Attorneys Ko Hyun-chul et al., Counsel for the defendant-appellant)

Two Industrial Co., Ltd. (Attorneys Son Ji-yol et al., Counsel for the defendant-appellant)

U.S. Mestop Electricity Co., Ltd. (Bae & Yang LLC, Attorneys Jeong Woo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2010Na66639 decided November 24, 2011

All appeals and supplementary appeals are dismissed. The costs of appeal are assessed against each party. The costs of appeal between the Plaintiff and Defendant Hyundai Flus Co., Ltd. and Defendant Hyundai Construction Co., Ltd. are assessed against each party, and the costs of appeal between the Plaintiff and Defendant Hyundai Construction Co., Ltd. are assessed against each party. The costs of appeal between the Plaintiff and the Defendant N2 Industries Co., Ltd. are assessed against the Plaintiff including the costs

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

1. As to the Plaintiff’s appeal and the grounds of incidental appeal

A. On the first ground for appeal

In full view of the circumstances stated in its holding, the lower court determined that it is reasonable to limit liability for damages arising from the nonperformance of the obligation of Defendant Hyundai Frans Co., Ltd, Defendant Korea Electric Power Technology Co., Ltd, and Defendant Hyundai Construction Co., Ltd. (hereinafter “Co.”), to 35% in cases where the said three companies are combined.

The plaintiff asserts that the above limitation of liability is unfair in the grounds of appeal, but the fact-finding or the recognition of the limitation of liability for the purpose of offsetting negligence or ensuring the fair burden of damage in the damage compensation case falls under the exclusive authority of the fact-finding court, unless it is deemed that such determination is considerably unreasonable in light of the principle of equity. The above determination of the court below is not reasonable in light of the principle of equity. Accordingly, the ground of appeal on this part is without

B. On the second and third grounds for appeal

Product liability is a liability for damages caused to a manufacturer, etc. in the event of any loss of life, body or property due to a defect that is normally expected to cause a product, and the “property damage incurred only to the product” is excluded here (Article 3(1) of the Product Liability Act).

In addition, since it is reasonable to view that “property damage that occurred only to manufactured goods” includes not only the property damage itself caused by the product but also the business loss caused by the defect of the product, the damage caused thereby is not subject to the Product Liability Act (see, e.g., Supreme Court Decisions 97Da26593, Feb. 5, 199; 98Da35525, Jul. 28, 2000).

In full view of the evidence, the lower court rejected the Plaintiff’s conclusion of the instant contract on December 22, 2003, which was concluded with Defendant Hyundai Fit Industries Co., Ltd. (hereinafter “Eco-Energy”) to promote a project for converting gas into resources, and concluded the instant supply contract with Defendant Hyundai Fit Industries Co., Ltd. (hereinafter “Defendant Nit Industries”) to be supplied with the instant power generator necessary for the above power generation facilities, as it supplied the instant power generation equipment from Japan and supplied the instant power generation equipment to Hyundai Fits, and completed an installation project under the instant contract with Defendant Hyundai Fit Industries Co., Ltd., Ltd. (hereinafter “Eitco-Energy”), which was found to have been operated for the first time due to the interruption of power generation of the instant power generation facilities (hereinafter “Defendant Nitco-Energy”), and found that the instant equipment was operated for the first time after the commencement of a test for the instant power generation facilities, and that the instant equipment was operated for a period of less than 12,2006.

The judgment of the court below is in accordance with the above legal principles, and it did not err by misapprehending the legal principles on the subject of product liability.

In addition, unless the above error is found in the judgment of the court below, the legitimacy of the court below's assumptive and additional determination as to whether the above defect occurring in the development period of this case merely lacks product adequacy does not affect the conclusion of the judgment. Thus, the argument in the grounds of appeal on this point cannot be accepted without need for further review.

C. On the fourth and fifth grounds

For the reasons indicated in its reasoning, the lower court rejected all the Plaintiff’s assertion as to tort liability, employer liability (Article 756 of the Civil Act), and contractor’s liability (Article 757 of the Civil Act) of Defendant two Heavy Industries. Examining the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on tort liability, employer liability, and contractor’s liability, as alleged in the grounds of appeal

Meanwhile, even though the Plaintiff asserted against the Defendant Hyundai Women’s Liability under Article 756 of the Civil Act, the lower court did not explicitly state the reasons for its determination. However, in light of the relevant legal principles and records, in order for the Defendant Hyundai Women’s Liability to be an employer’s responsibility, the tort liability of the employee is recognized, and there is no evidence to support this in order for the Defendant Hyundai Women’s Liability to be an employer, and thus, it cannot be deemed that the Defendant Hyundai Women’s Liability is liable for damages arising from the employer’s liability under Article 756 of the Civil Act. Accordingly, this part of the allegation is clearly rejected. Ultimately, the omission of the lower judgment did not affect the conclusion of the judgment, and this part

D. On the sixth ground for appeal

The lower court determined that, in the case of Defendant Hyundai Flus, etc., only engaged in the installation of the instant power generator, which was completed in the form of a bresh and power generators, and delivered at the construction site, and cannot be deemed as the manufacturer of the instant power generator, and thus, cannot be deemed as the subject of the liability for damages under the Product Liability Act.

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on the manufacturer, who is the subject of product liability, as alleged in the grounds of appeal.

2. As to the Defendants’ grounds of appeal

A. As to the grounds of appeal by Defendant Hyundai Flus and Defendant Hyundai Construction

1) On the first ground for appeal

The court below held that the accident of this case occurred due to the defect in the manufacture or installation of the power generator of this case, and there was no evidence to acknowledge that there was no negligence on the part of the defendant Hyundai Flus, etc., and therefore, the defendant Hyundai Flus, etc. was liable to compensate for the damage caused by the non-performance

Even if examining the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on presumption or indirect proof, contrary to what is alleged in the grounds of appeal.

2) On the second ground for appeal

Based on its stated reasoning, the lower court determined that Defendant Hyundai Mos, etc. could not be exempted from liability for damages due to nonperformance under Article 26(3) of the General Conditions of the instant contract.

In light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on the interpretation of a legal act or by failing to exhaust all necessary deliberations.

3) On the third ground for appeal

In accordance with the legal principles as to subrogation of claims in some insurances, the assertion that the Plaintiff’s subrogation of claims against the Defendant Hyundai Flus, etc. is KRW 368,744,33, is a new assertion that was first filed in the final appeal and cannot be a legitimate ground for appeal.

4) On the fourth ground for appeal

As seen earlier, the lower court’s determination that limits liability for damages due to nonperformance of obligation, such as Defendant Hyundai Women’s Republic of Korea to 35% is not considerably unreasonable in light of the principle of equity. This part of the grounds of appeal is without merit.

B. As to the ground of appeal by Defendant Korea Electric Power Technology

1) As to the grounds of appeal on the defect in the manufacture and installation and the existence of negligence

As seen earlier, the lower court determined that the instant accident was liable for the damage inflicted on the Defendant Hyundai Flus, etc., on the ground that there was no evidence that there was no negligence on the part of the Defendant Hyundai Flus, etc., on the ground that the instant accident occurred due to the defect in the manufacture or installation of the instant power generator.

In light of the relevant legal principles and records, the lower court did not err by misapprehending facts or failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

2) As to the ground of appeal on interpretation of a juristic act

As seen earlier, the lower court’s determination that Defendant Hyundai Mos et al. cannot be exempted from liability for damages due to nonperformance on the ground of Article 26(3) of the General Conditions of the instant contract regarding the instant accident is justifiable, and contrary to what is alleged in the grounds of appeal, it did not err by misapprehending the legal doctrine on

3) As to the grounds of appeal on the scope of damages

The lower court determined that he did not produce electricity for 40 days from August 1, 2007 to September 9, 2007 due to the instant accident, and that he sustained damages from KRW 2,633,88,092.

Examining the above judgment of the court below in light of the records and evidence, contrary to what is alleged in the grounds of appeal, the court below did not err by misapprehending the facts against logical and empirical rules, failing to exhaust all necessary deliberations, or omitting judgment.

3. Conclusion

Therefore, all appeals and incidental appeals are dismissed, and the costs of appeal are assessed against each party, and the costs of appeal between the Plaintiff and Defendant Hyundai M&S and Defendant Hyundai Construction are assessed against each party. The costs of appeal between the Plaintiff and Defendant Hyundai Construction are assessed against each party. The costs of appeal between the Plaintiff and the Defendant Hyundai Heavy Industries are assessed against the losing party, including the costs of participation, 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 Min Il-young (Presiding Justice)