About KRW 98.37M in unpaid goods awarded in full, twice

Background

Our client, a producer and seller of farm materials, supplied materials to a longtime friend over about seven months but was not paid about KRW 98.37 million.

The issue

Whether the buyer was the friend personally or the farming corporation the friend headed, and whether there had been an agreement to offset the price against alleged defects.

Our approach

Our client argued that the supply contract was made with the buyer personally, so the buyer personally owed the price.

The court's reasoning

The court noted that, besides heading the corporation, the buyer was registered as an individual farm operator and farmed in their own name, that neither the invoices nor the ledger referred to a corporation, and that there was no evidence the buyer had told our client the deal was with the corporation. It therefore found the contract was with the buyer personally. The offset defense failed for lack of evidence. The appeal court upheld these findings.

Outcome

The first-instance court ordered the buyer to pay the full KRW 98.37 million plus late-payment interest, adjusting only the start date for interest, with costs on the buyer. The appeal court dismissed the buyer's appeal.

What this case means

Even when trade documents do not clearly name the counterparty, the contracting party can be determined from how the business was actually conducted.

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.