1. Case Overview

The plaintiff entered into a commercial property presale agreement with the defendant real estate developer.
As construction and delivery of the property were delayed, the parties subsequently executed a settlement agreement providing for a reduced sale price and stipulating remedies in the event of non-performance.

Despite the agreement, the commercial building has never been completed.
Accordingly, the plaintiff filed a lawsuit against the developer and the project operator seeking payment of the agreed amount and delay damages.

2. Key Issues

The principal issues in dispute were:

• The legal nature of the letter of payment guarantee executed by the defendants;

• Whether the statute of limitations had been interrupted through acknowledgment of the debt.

3. Legal Strategy

Attorneys Joong‑young Choi and Jung‑min Ha of One Law Partners, LLC carefully analyzed the wording of the payment guarantee, the circumstances surrounding its execution, the parties’ true intentions, and equitable considerations.
Based on this analysis, they successfully argued that the obligation should not be characterized as an independent contractual payment obligation but rather as a joint and several guarantee obligation.

In addition, the attorneys demonstrated that the principal debtor had executed and delivered written confirmations and notarized instruments at various points in time, constituting acknowledgments of debt and thereby interrupting the statute of limitations.

They further argued that, pursuant to Article 440 of the Korean Civil Act, the effect of an interruption of the statute of limitations against the principal debtor extends to a joint and several guarantor. Accordingly, the statute of limitations applicable to the guarantee obligation had also been interrupted without any separate action being required against the guarantor.
 

4. Significance of the Decision

The court accepted the arguments advanced by One Law Partners, LLC and ordered the principal debtors to pay the agreed contractual amount and the joint and several guarantor to satisfy the guaranteed obligation, together with delay damages.

This decision is significant because, despite the apparent expiration of the statute of limitations, the court recharacterized the nature of the obligation as a joint and several guarantee and applied Article 440 of the Civil Act to provide meaningful protection to the purchaser’s rights and interests.
 

Attorney Joong‑young Choi | jychoi@onelawpartners.com
Attorney Jung‑min Ha | jmha@onelawpartners.com
Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com