Background
A Korean language instructor at an exam preparation academy opened a rival academy of their own — serving the same students in the same subject, only a few hundred meters away — even before their contract term ended. The contract clearly prohibited opening or joining a competing academy within a set period and distance after termination, and provided for liquidated damages on breach. Changchun represented the academy.
The Issue — Proving the Breach and Enforcing the Liquidated Damages
There was evidence that the instructor had disparaged the academy even before the contract ended and had then opened a rival academy right on its doorstep, drawing students away. The key points were ① the validity of the non-competition covenant, ② proof of the breach, and ③ enforcement of the agreed liquidated damages.
How Changchun Helped
Changchun (attorneys Jaesun Yoon and Donghwan Shin) established liability for breach of the covenant by ① proving that the two academies were plainly in competition in distance, target students and subject; ② setting out the circumstances of the opening and the evidence of disparagement and solicitation of students; and ③ showing that the stipulated sum was an agreed measure of damages (Civil Act art. 398), claimable without separate proof of the amount of loss and not unjustly excessive.
Acting for the academy, Changchun obtained recognition of the instructor's liability for breach and recovered a substantial sum. The case shows how important it is to design and enforce non-competition covenants in protecting an academy's core assets — its instructors and students — against improper departures. (Outcomes depend on the facts of each case and may differ.)