Background
Our clients advanced funds to a company on several occasions over a number of years for an apartment development project. They sought payment on the basis that "when the project ended we were to receive a set percentage of the sums lent as a return, plus agreed interest." Changchun represented the funding clients (the plaintiffs).
The Issue — Was There an "Arrangement for Returns and Interest" Beyond a Simple Loan?
The central issue was whether an arrangement to pay returns and agreed interest — going beyond a simple money loan — actually existed, and whether, in the absence of a separate written agreement, it could be proven from the surrounding circumstances.
What Changchun Argued
Changchun (attorney Jaesun Yoon) argued affirmatively for the existence of the arrangement, presenting ① the fact that the company had entered into return-guarantee arrangements with other funders at the same time; ② the fact that the company was short of funds and so had a motive to make such an arrangement; ③ circumstances in which the company had encouraged our clients to develop nearby land or sought to sell them land cheaply; and ④ witness statements, emails and recordings from those involved.
Proving an oral agreement turns on how coherently the circumstantial evidence fits together. The larger the sums involved, the more surely recording the terms of profit sharing and interest in writing from the outset prevents disputes later. (Outcomes may differ depending on the facts of each matter.)