Store acquisition falls through, full 50 million won deposit returned

Background

Our client wired 50 million won to take over a franchise store run by the other party, but 11 days later gave notice that he would not proceed. The other party insisted that a business transfer agreement had already been made orally and that the money was a forfeitable deposit that would not be returned.

Our approach

We argued that the main contract was never formed and that the money was merely a provisional deposit paid as a basis for negotiations, so it had to be returned.

Issues and ruling

The court found that no written contract or similar document existed and that there was no concrete agreement on key terms such as how the price was set or how the lease would be taken over, so no contract had been formed. It also held that the receipt, text messages and other materials submitted by the other party were one-sided and did not prove a forfeiture agreement.

Outcome

The other party must pay our client 50 million won plus late-payment interest and bear 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.