About KRW 359 million awarded for building defects

Background

Our client, the building owner, signed a construction contract worth about KRW 6 billion with the contractor. After completion, leaks and other defects appeared, and our client claimed about KRW 1.18 billion in total, combining damages in lieu of repairs and liquidated damages for delay.

Issues and ruling

Relying on expert reports, the court recognized defects such as missing drainage facilities and faulty waterproofing, and rejected the contractor's arguments that it built as the owner instructed and that the claim should be set off. It limited liability to 75 percent considering factors on the owner's side, such as unclear drawings, and rejected the delay claim because the completion deadline had been extended by an amended contract.

Outcome

The first instance awarded about KRW 349 million, and the appeal court added about KRW 9.85 million, for a total of about KRW 359 million plus delay interest. The contractor's appeal was dismissed, and total litigation costs are split 60 percent to our client and 40 percent to the contractor.

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.