Background
Our client contracted to buy land in a redevelopment district and take over the apartment occupancy right that went with it. When property prices rose in the meantime, the seller refused to perform, claiming to have been "mistaken in calculating the capital gains tax." Changchun represented our client, the buyer.
What Was at Stake
A contract cannot lightly be rescinded, but where "mistake" is established rescission is exceptionally available. The seller argued that they had contracted on the premise that, as an overseas Korean national, staying in Korea for a certain period would reduce their capital gains tax, and that the late balance payment date evidenced that understanding. Had this been accepted, our client stood to lose the occupancy right.
How Changchun Helped
Changchun proved forcefully that the late balance payment date was simply something the buyer had no particular reason to oppose and therefore accepted, and that if the tax reduction had truly been central to the contract it would have been written into a special clause — yet the contract said nothing whatsoever about capital gains tax.
The court found for Changchun, and the seller was required to perform the transfer of ownership and the change of name on the occupancy right as agreed. The case defeated an attempt to break a contract by invoking "mistake" simply because prices had risen. (Outcomes depend on the facts of each case and may differ.)