Lawsuit for Return of Unjust Enrichment | Prevailed with "Dismissal of the Plaintiff's Claim" in a Lease Down Payment Return Lawsuit

The client who inquired about a lawsuit for return of unjust enrichment was in a legal dispute concerning the return of a lease down payment.

Having lost at first instance after preparing alone, the client requested legal assistance for the appeal and received a consultation with an attorney.

The client had entered into an annual rent lease agreement to lease certain buildings, including a pension, and received a down payment of 22 million won.

The agreement was made orally, and there was no separate recording or written contract.

However, the other party unilaterally gave notice of cancellation of the agreement a few days before the balance payment date, demanded the return of half of the down payment, and filed a lawsuit for return of unjust enrichment.

At first instance, the court found that 10 million won, corresponding to 10% of the annual rent of 120 million won, was a down payment having the character of cancellation money, and that the remaining 12 million won was an advance payment of the annual rent.

Whereas cancellation money is borne as a disadvantage by the party who voluntarily cancels the agreement, an advance payment is money paid in advance on the premise of performance of the agreement, and it therefore becomes subject to return if the agreement is canceled.

Accordingly, the court ruled that the 12 million won the client had received as an advance payment should be deemed unjust enrichment and returned.

The attorney who reviewed the client's case set the direction of the pleadings on appeal so as to clarify that the essence of the lawsuit for return of unjust enrichment lay in the attribution of responsibility for the breakdown of the agreement and the resulting character of the down payment.

The other party argued that part of the down payment constituted an advance payment and should therefore be returned, but the appellate court did not accept this.

Where a down payment is recognized as an advance payment, the portion not performed upon cancellation of the agreement becomes subject to return, but the attribution of the down payment is determined according to who is responsible for the cancellation of the agreement.

The court found that, in this case, responsibility for the cancellation of the agreement lay with the plaintiff, and it therefore dismissed the plaintiff's claim in the lawsuit for return of unjust enrichment in its entirety.

As a result, the court rendered a judgment dismissing the plaintiff's claim, and the case concluded with the client prevailing.

In a lawsuit for return of unjust enrichment, the review of the facts and the law is very important, regardless of whether the form of the agreement is oral or written.

If you are considering an appeal in light of the first-instance result, you must closely analyze the basis for the preceding judgment together with a specialist and review it strategically in order to expect a favorable result on appeal.

Drawing on extensive experience in various civil lawsuits, Daeryun Law Firm provides a systematic response strategy throughout the entire course of litigation.

If you are involved in a down payment return dispute such as this case, please secure the assistance of a specialist and protect your rights through a 🔗legal consultation reservation.