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CISG CASE PRESENTATION

Republic of Korea 13 April 2010 Suwon District Court (Cars case)
[Cite as: http://cisgw3.law.pace.edu/cases/100413k3.html]

Primary source(s) of information for case presentation: Case abstract

Case Table of Contents


Case identification

DATE OF DECISION: 20100413 (13 April 2010)

JURISDICTION: Republic of Korea

TRIBUNAL: Suwon District Court

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 2008Gahap14769

CASE NAME: Unavailable

CASE HISTORY: Successful mediation at the second instance court

SELLER'S COUNTRY: United States of America

BUYER'S COUNTRY: Korea

GOODS INVOLVED: Cars


UNCITRAL case abstract

KOREA: Suwon District Court [Seongnam Branch Court] 13 April 2010

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/134],
CLOUT abstract no. 1280

Reproduced with permission of UNCITRAL

Abstract prepared by Haemin Lee, National Correspondent

The Korean buyer (plaintiff) entered into a contract with the seller from the United States of America (defendant) to import thirteen cars. However, after paying the price of one car, the plaintiff refused to pay further, claiming it was not a party to the contract in question. According to the plaintiff, the buyer named in the contract was a separate corporation. Subsequently, the defendant discontinued the delivery of the cars it had been shipping. The plaintiff claimed this constituted a ground for avoidance of the sales contract and brought suit to recover its original payment. The defendant asserted that the contract had been avoided due to the plaintiff’s breach of contract; therefore the plaintiff’s original payment is set off by the defendant’s claim for damages.

The court found that the plaintiff was in fact a party to the contract, and that the plaintiff had committed a “fundamental breach of contract” by denying its being a party to the contract and failing to pay the total sales price. Despite this, the defendant was still obliged to return the plaintiff’s payment with interest and with compensation for any damages caused by the delayed return, pursuant to Articles 81(1) and 81(2) CISG. However, the plaintiff’s claim was to be set off against the defendant’s claim with the plaintiff receiving its original payment less the amount of damages owed to the defendant.

The court limited the plaintiff’s liability to transportation costs and storage expenses in assessing the damages, in consideration of Article 74 CISG, which provides that “damages for breach of contract by one party consist of a sum equal to the loss ... [and] may not exceed the loss which the party in breach foresaw or ought to have foreseen as a possible consequence of the breach of contract.” As the CISG does not have provisions to calculate the set off, California state law was applied.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 81(1) and 81(2)

Classification of issues using UNCITRAL classification code numbers:

74A [Loss suffered as consequence of breach];

74B [Outer limits of damages; foreseeability of loss];

81A [Obligations of both parties under Convention];

81C [Restitution by each party of benefits received]

Descriptors: Avoidance; Consequential damages; Foreseeability of damages; Fundamental breach; Installment contracts; Privity of contract

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Korean): Unavailable

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated November 8, 2013
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