In a case where Party A, upon entering into a mutual aid agreement with Party B and making an installment payment, notified the cancellation of the mutual aid agreement without being provided with the mutual aid service and demanded the refund of the already paid amount, Party B asserted that “A cannot rescind the mutual aid agreement and is obligated to pay only the cancellation refund according to the terms and conditions even if the contract was rescinded,” based on the terms and conditions, the case holding that the terms and conditions of the mutual aid agreement concerning the cancellation and cancellation refund are null and void pursuant to the Regulation of Terms

In a case where Gap entered into a mutual aid agreement with Eul and paid in installments the contract amount, and notified the cancellation of the mutual aid agreement without being provided with the mutual aid service and demanded refund of the already paid amount, Eul company's claim that " Eul company shall pay the cancellation payment after deducting the amount of damage caused by the violation of a member's contract if it is deemed necessary by the member Eul company, Eul company's request for cancellation of the mutual aid agreement, Eul company shall be missing, dead, or any other company's violation of a member's contract and shall pay the cancellation payment after deducting the amount of cancellation of the mutual aid contract." The above mutual aid agreement constitutes a prepaid installment contract under the provisions of the Act on Installment Transactions, and on the ground that Article 25 of the Act on the Regulation of Terms and Conditions is limited to the consumer's right of rescission as provided for in Article 9 subparagraph 1 of the Act on the Regulation of Terms and Conditions, and the cancellation refund provision constitutes a claim for penalty significantly exceeding the loss caused by the cancellation, and thus becomes null and void under Article 8 of the Regulation of Terms and Conditions Act.

Article 25 of the Installment Transactions Act, Article 8 and Article 9 subparagraph 1 of the Regulation of Standardized Contracts Act

Plaintiff

Cho Jae-hoon Co., Ltd.

Ulsan District Court Decision 2013Gau31079 decided January 14, 2014

October 15, 2014

1. The judgment of the court of first instance is modified as follows.

A. The Defendant shall pay to the Plaintiff 969,00 won with 5% interest per annum from March 15, 2013 to December 3, 2014, and 20% interest per annum from the next day to the date of full payment.

B. The plaintiff's remaining claims are dismissed.

2. All costs of the lawsuit shall be borne by the defendant.

3. Paragraph 1(a) of this Article may be provisionally executed.

1. Purport of claim

The defendant shall pay to the plaintiff 969,000 won with 5% interest per annum from March 13, 2013 to the delivery date of a copy of the complaint of this case, and 20% interest per annum from the next day to the day of full payment.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

A. On July 12, 2001, the Plaintiff and the Defendant established for the purpose of the law of customs clearance such as marriage, funeral, hall, and stone on July 12, 2001, paid 120 million won to the Defendant in 60,000 won per month (from July 2001 to July 2006). The Defendant entered into a mutual aid agreement to provide the Plaintiff with relief services such as goods and services for funeral and funeral, etc. (hereinafter “instant agreement”).

B. Under the instant contract, the Plaintiff paid KRW 1.2 million to the Defendant in total over 60 times from July 12, 2001 to February 9, 2007, respectively.

C. Since then, on March 11, 2013, the Plaintiff notified the Defendant of the rescission of the instant contract, and demanded a refund of the amount already paid, but the Defendant filed an application for remedy for consumer damage with the Consumer Dispute Settlement Commission (hereinafter “Consumer Dispute Settlement Commission”) who did not comply therewith. On April 24, 2013, the Consumer Dispute Settlement Commission issued a mediation decision to the effect that “the Defendant shall pay the Plaintiff the amount of KRW 969,00 and the amount calculated at the rate of 20% per annum from February 26, 2013 to the date of full payment,” but the said mediation was not established.

D. Meanwhile, at the time of the instant contract, Article 12 of the Defendant’s terms and conditions (hereinafter “instant terms and conditions”) are as listed in the attached Table, and the cancellation refund money to the Plaintiff pursuant to the criteria for the settlement of consumer disputes publicly notified by the Fair Trade Commission is KRW 969,246 [Article 12 of the instant terms and conditions (hereinafter “instant terms and conditions”), i.e., KRW 969,246 [Article 10,000 KRW - KRW 1/60 - KRW 2,000 x KRW 183,60

[Reasons for Recognition] Unsatisfy, Entry of Evidence A1 to 8, the purport of the whole pleadings

2. Determination of the parties' arguments

A. The parties' assertion

With respect to the Plaintiff’s filing of a refund for cancellation on the ground of cancellation of the instant contract against the Defendant, the Defendant asserts that the Plaintiff cannot cancel the instant contract pursuant to Article 12 of the terms and conditions of this case, and that even if the instant contract was cancelled on domestic affairs, the Defendant is merely liable to pay KRW 730,261,00 after deducting the Plaintiff’s monthly payment late payment arrears amounting to KRW 109,739 (=25% x 25% x 8,011/365) from the cancellation refund money according to the instant terms and conditions of this case.

B. Determination

1) Determination as to whether the instant contract was rescinded and the amount of the Plaintiff’s refund upon termination

According to the statement of evidence No. 12, the contract of this case states that "the member requests the cancellation of the contract of this case to the defendant in writing, the defendant shall pay the cancellation refund after deducting the amount of damage caused by the member's violation of the contract of this case if it is deemed necessary by the member's disappearance, death, or other company's violation of the contract of this case."

However, in full view of the purport of the argument in the above evidence, the contract in this case constitutes a prepaid installment contract under the Installment Transactions Act (hereinafter “Installment Transactions Act”), and according to Article 25 of the Installment Transactions Act, if a consumer fails to receive goods, etc. by prepaid installment contract, the contract in this case may be rescinded, and if the prepaid installment contract is rescinded, the prepaid installment business operator shall refund to the consumer the amount calculated by subtracting the penalty from the price already paid within three business days from the date of rescission of the prepaid installment contract. The provision on the right of rescission in this case constitutes a restriction on the consumer’s right of rescission under Article 25 of the Installment Transactions Act, which constitutes Article 9 subparagraph 1 of the Regulation of Standardized Contracts Act, and thus becomes null and void. The provision on the right of rescission in this case constitutes a claim for penalty exceeding the loss incurred by the cancellation to the consumer, and thus constitutes Article 8 of the Regulation of Standardized Contracts Act (In addition, comprehensively taking account of the purport of each statement in Gap 14 and 15 evidence, the non-party at the time of conclusion of the contract in this case.

Therefore, according to the above facts, since the contract in this case was rescinded by the plaintiff's declaration of intent of rescission, the defendant is obligated to pay to the plaintiff 969,000 won for cancellation refund of 969,246 won according to the criteria for the settlement of consumer disputes publicly notified by the Fair Trade Commission and damages for delay calculated at each rate of 20% per annum under the Civil Act from March 15, 2013 to December 3, 2014, which is the date of cancellation of the contract in this case where it is deemed reasonable to dispute as to the existence or scope of the defendant's duty of performance from March 15, 2013 to March 15, 2013.

2) Determination as to whether to deduct late payment charges on monthly payments

According to the evidence evidence No. 2, the plaintiff paid 1,200,000 won under the contract of this case to the defendant from July 12, 2001 to June 12, 2006. However, the plaintiff paid 1,200,000 won to the defendant from July 12, 2001 to February 12, 2007, it is recognized that there was damages for delay on the monthly payment.

As to this, the Plaintiff asserts to the effect that it is unreasonable that the Defendant did not explain or claim any explanation or claim on damages for delay for about 13 years from the date of concluding the instant contract, and that the Plaintiff would pay the defective application for cancellation and damages for delay. The Plaintiff’s claim on damages for delay arising between the Plaintiff and the Defendant, a merchant, is subject to the five-year commercial extinctive prescription, and the Plaintiff paid the Defendant the monthly payment under the instant contract to the Defendant on February 12, 2007. The Defendant submitted a written statement on November 11, 2013, stating that damages for delay for delay should be deducted from the payment of monthly payment, in full view of the following circumstances, which are acknowledged as a whole in light of the purport of the argument as to the completion of the extinctive prescription, i.e., the Plaintiff’s claim for damages for delay, which occurred between the Plaintiff and the Defendant, was based on commercial activity. Accordingly, the Defendant’s claim is without merit.

3. Conclusion

Thus, the plaintiff's claim of this case shall be accepted within the scope of the above recognition, and the remaining claims shall be dismissed as there is no ground. Since the judgment of the court of first instance is partially unfair, the judgment of the court of first instance shall be modified as above.

[Attachment]

Judges Seo Chuncheon (Presiding Judge) et al.

Note 1) KRW 1080,00 = 120,000 for the aggregate of disposable payments (=20,000 x 60) - 120,000 for the single discrimination management expenses (=120,000 won x 10%)

주2) 1/60 = (총 계약기간 월수 60개월 - 납입경과기간 월수 60개월 + 1)/총 계약기간 월수 60개월(총 계약기간 월수 ≥ 60인 경우 총 계약기간 월수 60)

Note 3) 183,600 = Contract amount of KRW 1.2 million ¡¿ 15.3%