Background
In February 2019, our client hired a real estate consultant to help acquire a plot of land in Gyeonggi Province that was being sold at auction, paying a KRW 10,000,000 deposit. A special clause provided that if our client failed to win the auction at the agreed price or it became certain that the land could not be purchased, the consultant would refund KRW 7,000,000 of the deposit within one week.
In July 2019, the land was sold at auction to a third party for about KRW 961.1 million, and the new owner demanded KRW 1.4 billion, so purchase talks went nowhere. At the end of 2020, the consultant began refunding in small installments at our client's request, but the amount repaid came to only KRW 2,800,000.
What Was at Stake
The consultant argued that (1) the real party to the contract was our client's father, (2) the goal was acquiring the land, not winning the auction, so the contract had not failed, and (3) the partial refund had been made under threats.
How Changchun Helped
Law Firm Changchun claimed the remaining KRW 4,200,000 (KRW 7,000,000 less the KRW 2,800,000 already refunded) through a payment order, which turned into a lawsuit when the consultant objected. The court accepted the plaintiff's arguments.
The signatory is the party. Our client had signed and sealed the contract as the client, and the consultant had reported to our client directly.
The land could no longer be acquired. Years had passed without progress, and the consultant had begun refunding on its own, so the refund clause was triggered.
The threat claim lacked support. The consultant had earlier stated in the objection that it was repaying little by little as promised.
Outcome
In December 2021, the first-instance court ordered the consultant to pay KRW 4,200,000 plus late-payment interest and to bear the costs. In November 2022, the appellate court dismissed the consultant's appeal and ordered it to bear the appeal costs. Changchun then applied for a determination of the litigation costs owed by the other side.
Even for modest sums, a clear refund clause and the counterparty's own conduct can be enough to recover money that has been withheld. (Outcomes depend on the facts of each case.)