Deals & Cases

Price of goods
Price of goodsWinning the case (favorable judgment)

Defense case in a lawsuit for the price of goods | Claim for the price of goods entirely dismissed through a defense of extinctive prescription

The client, who was sued as the defendant in a lawsuit for the price of goods, was in a situation in which a supplier of raw yarn with which the client had maintained transactions over a period of several years sought payment of approximately 29 million won in unpaid price of goods.

1. Client sued in a lawsuit for the price of goods

This is a case in which a client who was sued in a lawsuit for the price of goods was able to entirely defend against an unjustified claim with the assistance of a civil litigation attorney.

Background of the occurrence of the price of goods

The client had maintained continuous transactions with the plaintiff company, a raw yarn manufacturer, for about 11 years, paying for goods in accordance with purchase orders, quotations, and tax invoices.


What became an issue was a particular transaction that took place more than 10 years ago.

At that time, the plaintiff company supplied nylon yarn, but due to its defective quality, a serious defect arose in the export products manufactured by the defendant.

As a result, the client suffered a loss of more than approximately 120 million won, and as deliveries were delayed, transactions with overseas buyers were also severed.


Accordingly, the defendant demanded damages and a refund of the price of goods from the plaintiff company, and the plaintiff company also acknowledged the fact of the defect in its delivery.

Thereafter, the two parties agreed to conclude the dispute through the following compensatory settlement.

① The defendant would bear only a portion of the loss amount

② The plaintiff would supply nylon yarn at a price lower than the market price in the future, thereby compensating for the loss

③ If the defendant came to gain a profit through the low-price transactions, a portion would be paid to the plaintiff at the defendant's discretion

Thereafter, transactions continued normally, and settlement was completed for each transaction.


However, several years after the transactions ended, the plaintiff abruptly filed a lawsuit for the price of goods against the defendant, asserting that “unpaid amounts remained at that time.”

Background of the case of the defendant client in the lawsuit for the price of goods

2. Strategy employed to defend against the lawsuit for the price of goods

In order to establish that the plaintiff's claim was an unjustified claim that revisited transactions that had already been settled, the civil litigation attorney responded with the following strategy.

Civil litigation attorney, transaction settlement and defect in the lawsuit for the price of goods

Strategy for defending against the price of goods | ① Establishing the fact of the delivery defect and the occurrence of loss

The civil litigation attorney established, through tax invoices, emails, and transaction records, the substantial loss suffered by the defendant as a result of the yarn supplied by the plaintiff, as well as the resulting transaction delays and increased costs.


In particular, by submitting the circumstances showing that the plaintiff had acknowledged the fact of the defect and, through official documents and transaction records of the time, had proposed a compensatory settlement, the attorney made clear that the defendant had merely suffered a loss and had never assumed any obligation.

Strategy for defending against the price of goods | ② Argument of settlement and conclusion under the compensatory settlement

On the basis of the terms of the settlement under which the plaintiff company, instead of performing its obligation to pay damages and to provide a refund, agreed to compensate for the loss through a low-price supply arrangement, the civil litigation attorney demonstrated that all transactions had already been settled and concluded.

The attorney established through specific documents that the amount claimed by the plaintiff was not the price of goods, but rather an amount that had been agreed to be paid at the defendant's discretion if a profit remained from the low-price transactions.

Strategy for defending against the price of goods | ③ Absence of the plaintiff's evidence and denial of any acknowledgment of debt

The civil litigation attorney argued that the customer ledger and other materials submitted by the plaintiff were merely internally prepared records and could not constitute objective evidence.

In addition, the attorney logically rebutted that the defendant's remittance records and KakaoTalk conversations were also merely responses to requests for distribution of profits, and did not constitute an acknowledgment of debt.

Strategy for defending against the price of goods | ④ Defense of completion of extinctive prescription

Even if, as the plaintiff asserted, some unpaid amount had remained, the transaction in question had ended more than 10 years earlier, so the short-term extinctive prescription (3 years) for a claim for the price of goods had already been completed.

Accordingly, the civil litigation attorney clearly presented, as a matter of legal principle, that the small remittances the defendant made thereafter concerned an entirely different transaction and therefore did not constitute grounds for interrupting the prescription.

3. Result of the Lawsuit Claiming the Price of Goods: Plaintiff's Claim Dismissed in Its Entirety

The court accepted all of the arguments presented by the civil litigation attorney in the lawsuit claiming the price of goods, and, setting out the reasons below, it dismissed the plaintiff's entire claim for the price of goods in the amount of KRW 29 million.

① There were defects in the goods supplied by the plaintiff, along with the resulting losses and a remedial agreement.

② Under that agreement, the transaction had already been fully settled.

③ Even if an unpaid claim had existed, the extinctive prescription had been completed, so the claim could not be asserted.

Dismissal of the plaintiff's claim following assistance in the lawsuit claiming the price of goods

Extinctive Prescription of the Price of Goods

Under Article 163, Item 6 of the Civil Act, a claim for the price of goods sold by a producer or merchant is subject to a short-term extinctive prescription of three years.

The extinctive prescription runs from the time the right may be exercised (the delivery of the goods or the arrival of the payment due date) (Article 166, Paragraph 1 of the Civil Act), and if the claim is not asserted for three years, it is extinguished.

Accordingly, if a long period has elapsed after the end of the transaction, whether the extinctive prescription has been completed becomes the key issue that determines the outcome of the lawsuit.

If You Need the Assistance of a Civil Litigation Attorney

Daeryun LLC includes civil law specialist attorneys registered with the Korean Bar Association, as well as attorneys with experience handling a wide range of cases.

Through a dedicated consultation attorney system, the firm identifies the significance of the matter and its key issues at an early stage and assigns a dedicated attorney suited to the type of case, providing multifaceted and systematic assistance.

If you are facing an unjustified civil lawsuit similar to the above, please feel free to entrust your case at any time through a 🔗legal consultation reservation.

FAQ Regarding the Lawsuit Claiming the Price of Goods

Q. Is there a way to interrupt the extinctive prescription in a lawsuit claiming the price of goods?

A. Yes.

Grounds for interrupting the extinctive prescription include △ the filing of a lawsuit, △ an application for a payment order, △ an application for compulsory execution such as attachment or provisional attachment, and △ the debtor's acknowledgment of the debt (repayment, partial payment, a request for an extension of the deadline, and the like). If any one of these occurs, the prescription is interrupted, and once a final and conclusive judgment is rendered thereafter, the prescription begins to run anew.

Accordingly, securing the debtor's acknowledgment before asserting the claim, by sending a certified letter of content or preparing a written agreement, is also an important strategy in practice.

Q. What preparation is needed before filing a lawsuit claiming the price of goods?

A. First, you should clearly organize the transactional relationship and the circumstances of the nonpayment, and secure related evidence (the contract, proof of delivery, deposit records, and the like).

It is also advisable to review whether the prescription has been completed and to ascertain the counterparty's financial condition, while also considering preservative measures such as provisional attachment.

물품대금청구소송

This content is based on actual cases handled by Daeryun Law LLC and has been partially adapted. All copyrights belong to Daeryun Law LLC.
Unauthorized reproduction, copying or distribution may result in legal action under applicable laws.

Price of goods: Want a faster, more detailed consultation?

Consult a
specialized attorney

Related Information

Explore legal information related to this case.

Explore more legal information

Daeryun's Key Strengths

Daeryun's key strengths background
Litigation strategy using
Daeryun's own AI & IT technology

Litigation strategy using Daeryun's own AI & IT technology

More than 240
key members

More than 240 key members

*experience_cnt*+ cases handled
per month

1,200+ cases handled per month

* 2025년 월평균 기준
Complies with Korean Bar Association Advertising Regulations Article 4 (1)

Explore
more strengths
Explore more strengths arrow

Book a legal
consultation with an attorney

All consultations are reviewed by a specialized attorney first,
so they are conducted by appointment only.

Phone consultation

1800-7905

Available 24 hours a day, 365 days a year

Phone consultation
Online consultation

Online consultation

We provide tailored
legal services for our clients.

Chat consultation

Chat consultation

KakaoTalk channel
Daeryun Law LLC Attorneys

Request a consultation

Related Members

View more
Attorney ChanWoo JEONG

ChanWoo JEONG

T. 070-5221-2387

civil lawyer

Attorney EunSol LEE

EunSol LEE

T. 070-7510-2016

civil lawyer

Attorney June JUNG

June JUNG

T. 070-7510-1822

civil lawyer

Attorney MoonYong Lee

MoonYong Lee

T. 070-5221-3616

civil lawyer

Key Case Studies

View more

Related Practice Areas

View more
View our Case Handling System

Consult in other languages

Popular Columns

View more

Previous

Customs Consultation Case | Revocation of a Customs Duty Imposition Related to Tariff Classification

Next

Drunk Driving Hit-and-Run Injury Case | Successful Reduction of Sentence for a Client Charged with Refusal of a Breathalyzer Test and Hit-and-Run Causing Injury

View list
Quick Menu

Chat