Return of the purchase price

The extinctive prescription for the right to claim return of the purchase price applies differently depending on the legal character of the transaction, that is, whether it is a commercial act (a business act) or a civil act (non-business).

For ordinary real estate sales, a 10-year extinctive prescription under the Civil Act applies.

By contrast, if the transaction was a sale between both parties dealing in real estate as a business, a 5-year extinctive prescription under the Commercial Act may apply.

In this regard, the starting point of the extinctive prescription is, depending on the circumstances, the date of rescission of the contract, the date of non-payment of the price, or the date of transfer of ownership, and the like.

The items that must be included when drafting a complaint are as follows.

The purport of the claim is the specific content of the claim that the plaintiff seeks to have recognized by judgment.

Example of a purport of claim

The cause of the claim is the part that explains in detail, according to the facts, the legal grounds and background on which the plaintiff bases the claim.

It must be drafted clearly in accordance with the five Ws and one H (when, where, who, what, how, and why).

Example of a cause of claim

The evidentiary materials supporting the claim for return of the purchase price must be specifically identified.

Each item of evidence may be assigned a number in the form of "Exhibit A No. ○."

Key supporting materials

The documents that must be submitted together with the complaint are as follows.

Because the complaint may be returned if attached documents are missing, it must be carefully checked in advance.

A lawsuit claiming return of the purchase price, like an ordinary civil lawsuit, begins with the filing of a complaint.

The court examines the complaint and, if there is no formal defect, serves a duplicate copy of the complaint on the defendant.

If the defendant receives the complaint but makes no response whatsoever, the court may uphold the plaintiff's claim through a "judgment without pleadings."

The defendant must, from the date of service of the complaint, submit an answer ordinarily within 30 days; in addition, both parties may supplement or organize their arguments through preparatory briefs.

The key is to submit evidence proving such matters as whether a sales contract was concluded, the details of payment of the price, and the grounds for return.

The burden of proof rests with the parties, and the following types of evidence are generally used.

As a rule, the trial hears both sides' arguments and examines the evidence through "pleading dates."

Where the issues are complex, witness examination, examination of the parties, and the like are conducted intensively on a concentrated evidence-examination date.

Once all examination of evidence and pleadings have concluded, the court sets a date for pronouncement of judgment and renders the judgment.

From the date of pronouncement of judgment, if no appeal is filed within 2 weeks, the judgment becomes final, and after it becomes final, compulsory execution also becomes possible.

Compulsory execution is a procedure whereby, on the basis of a legally recognized document (a title of execution) such as a court's written judgment, a conciliation record, or a notarial deed, state power (the court) intervenes to compulsorily dispose of the debtor's property and pay money to the creditor out of the proceeds.

In other words, it is a means of realizing the right to legally recover money even when the other party does not return the price.

※ A written judgment with a "declaration of provisional execution" may be subject to compulsory execution even before the judgment becomes final, so execution is possible without proof of finality.

Our law firm has on staff a substantial number of certified real estate specialist attorneys registered with the Korean Bar Association, as well as experienced attorneys with an average of more than 10 years of practice.

Accordingly, we are able to provide substantive advice not only on disputes arising in the course of concluding a sales contract, but also on determining the requirements for rescission of a contract, analyzing grounds such as defects or deception, and reviewing the legality of a claim for return of the price.

We also provide comprehensive assistance throughout the entire process, from sending certified content mail and filing a lawsuit for return of the purchase price to compulsory execution proceedings.

If it is difficult to handle all of the procedures on your own, we recommend proceeding more accurately and promptly with the assistance of a real estate specialist attorney.