Background
A purchaser of an office unit sought rescission of the pre-sale contract along with the down payment and damages on grounds of mistake (Civil Act art. 109) or deception (art. 110), claiming not to have known that "building the units in the expanded configuration would change the financing limit and the leasing terms." Changchun represented the developer.
The Issue — Can a Contract Be Rescinded for "Mistake as to Motive"?
Rescission for mistake under article 109 of the Civil Act requires ① that the mistake concern a material element of the content of the juristic act, and ② that the declarant not be grossly negligent. The case law in particular treats a mistake as to the "motive" for contracting as a ground for rescission only where that motive was expressed to the other party and made part of the content of the declaration of intent. Deception under article 110, meanwhile, requires that a matter subject to a duty of disclosure under the principle of good faith was not disclosed.
How Changchun Helped
Changchun (attorneys Jaesun Yoon and Donghwan Shin) rebutted the requirements of mistake and deception one by one, showing point by point that ① financing limits and leasing terms lie in the domain of third parties (financial institutions and rental management companies) beyond the developer's control, and those circumstances materialized only a considerable time after contracting, so the developer cannot be said to have owed a good-faith duty to disclose them in advance; ② the purchaser never expressed the "financing and leasing terms" to the other party as the motive for contracting and made them part of the contract, so this was not a "mistake as to a material element" grounding rescission but merely a mistake as to motive; and ③ the purchaser was also grossly negligent in failing to check circumstances they could have verified themselves.
Conclusion
The court dismissed the claim, holding that the requirements for rescission for mistake or deception were not met (judgment for our client).
The principle is that a contract cannot lightly be undone. The case makes clear that neither the fact of "not knowing" nor an inner expectation never expressed externally can rescind a contract already formed, and that each statutory requirement of mistake or deception must be satisfied. (Outcomes may differ depending on the facts of each matter.)