Daejeon Real Estate Attorney | Judgment Confirming Termination of the Construction Contract, Assisting the Client

A Daejeon real estate attorney will explain how to terminate a construction contract.

🔗Rescission and termination of a contract refers to extinguishing the effect of a contract going forward.

A contract may be terminated unilaterally on grounds such as one party's default or termination by mutual agreement, and when a contract is terminated, both parties incur a duty to restore the situation to its state before the contract was concluded.

For example, if a sales contract is terminated, the seller must return the purchase price and the buyer must return the object of sale.

The same applies to a construction subcontracting agreement, which may be terminated midway.

However, in the case of a construction subcontracting agreement, terminating the contract does not mean that the ordering party may pay the contractor no construction costs at all, or that the contractor must remove all of the existing work and restore the original state.

In other words, in the case of a construction subcontracting agreement, the most important issue in the relevant 🔗construction payment suit is what proportion of the total construction costs the ordering party must pay the contractor according to the degree of completion of the work.

If a construction subcontracting agreement is terminated and the construction is partially completed, the court generally determines the proportion of the completed portion based on the total construction costs and orders payment of the construction costs corresponding to that proportion.

A construction contract termination suit involves complex and varied practical elements, and we will explain the points to note in such a suit.

The points to note in a construction contract termination suit include the following: ▲the importance of the contract, ▲the validity of the grounds for termination, ▲compliance with termination procedures, ▲damages and settlement, ▲securing evidence, and ▲resolution methods such as litigation.

First, the contract clauses must clearly set out the grounds for termination, the procedures, and the provisions on penalties and damages.

Using the standard contract recommended by the Framework Act on the Construction Industry increases legal stability when a dispute arises.

The grounds for termination must also have a valid legal basis under the Civil Act, contract law, and the like.

If one party seeks to terminate the contract due to construction delay, poor quality, or the like, the other party's fault must be clearly proven.

The other party must also be given a sufficient opportunity to remedy through prior notice before the contract is terminated.

Afterward, for the settlement of construction costs, the unpaid construction costs, the value of the completed portion of the construction, whether the advance payment is to be returned, and the like must be clearly organized after termination of the contract.

Specific supporting evidence is needed for losses caused by the other party's fault.

In this process, evidence is more important than anything else.

All materials, including the progress of construction, problems, written warnings, and email correspondence, must be systematically preserved.

A real estate attorney will explain real estate construction: check the Supreme Court's judgment on grounds for 🔗subcontracting violations

The client is the party who contracted out the construction work in this case to the defendant, and the defendant is the contractor for the work.

The plaintiff and the defendant entered into the construction contract in this case, and the client paid the defendant the down payment and other amounts needed to procure construction materials.

The defendant, however, delayed the construction work for various unreasonable reasons, and the client ultimately sent the defendant a certified mail notice stating that the contract would be terminated.

In this case, due to the defendant's default, the construction contract in this case can be regarded as having been lawfully terminated by the plaintiff, that is, the client's declaration of intent to terminate.

The Daejeon real estate attorney argued that the lawsuit to confirm the termination of the contract was necessary because the defendant does not currently accept the termination.

At present, the defendant does not acknowledge its own default and is demanding additional construction costs.

In addition, the defendant gives no response whatsoever to the client's declaration of intent to terminate, while making arguments about whether the contract remains in effect.

The Daejeon real estate attorney emphasized that this conduct by the defendant makes a lawsuit to confirm the termination of the contract necessary.