About KRW 334 million of a KRW 414 million defect claim awarded

Background

Our client was the developer of a new commercial building, and the other side was the contractor that built it. After completion, numerous defects appeared, and when the contractor refused to repair them, our client claimed about KRW 414 million in damages in lieu of repairs.

Our approach

Our side proved the defects and repair costs in detail using the expert reports, and showed that the unpaid fees had been extinguished by money our client had paid subcontractors on the contractor's behalf.

Issues and ruling

Based on two court-appointed expert reports, the court recognized unfinished and defective work and set repair costs at about KRW 334 million. The contractor argued it had been released from liability by an agreement to build only what was needed for completion approval, and sought to set off about KRW 300 million in unpaid construction fees and other sums. The court rejected both, finding no release language in the agreement and that the unpaid fees had already been extinguished by payments made to subcontractors.

Outcome

The contractor was ordered to pay our client about KRW 334 million plus delay interest. The remaining claims were dismissed, and the contractor bears 80 percent of the litigation costs.

This is the outcome of an individual case and does not guarantee the same result in similar matters. Some facts have been generalized to protect the parties involved.