KRW 750M construction claim: only KRW 2.26M awarded

Background

Our two clients had hired one contractor for several building projects. The contractor claimed underpayment and extra work, seeking about KRW 375.04 million from each client on the theory that they were partners, and alternatively about KRW 750.08 million in total, split between the two.

The issue

Whether our clients were partners in a joint venture, whether payments had been applied in sequence regardless of site, and whether demolition and extra work were separate contracts.

Our approach

Our clients argued that completed work had been paid in full, including agreed extra costs, and that work the contractor failed to finish had been completed by our clients directly with the building owners, so nothing was owed.

The court's reasoning

The court held that one client's passing reference to the other as a 'partner' did not show an agreement to run a joint business, and rejected the partnership theory. Because our clients had noted site names on transfers and there were site-by-site payment confirmations and full-payment receipts, it found the fees had been settled site by site. There was also no evidence that demolition or extra work were separate contracts. Only at one site, after excluding extra costs a building owner had paid directly, did about KRW 2.26 million remain unpaid.

Outcome

The court ordered one client to pay about KRW 2.26 million plus late-payment interest and dismissed everything else. The contractor was ordered to bear all litigation costs.

What this case means

When working with one contractor across several sites, site-specific payment records and settlement confirmations become key evidence in a dispute.

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.