Case Analysis / Legal Updates

Claim for Return of Unjust Enrichment | Claim for Return of Unjust Enrichment Dismissed Where the Sales Commission Constituted Performance for an Illegal Cause

2026.02.06김국일

The plaintiff, who filed the claim for return of unjust enrichment, contended that the sales commissions the defendants had received constituted an unlawful act and sought their return, but the court held that they constituted performance for an illegal cause and dismissed the claim for return.

1. Claim for Return of Unjust Enrichment, What Were the Detailed Circumstances?

🔗the claim for return of unjust enrichment arose from the following case.

The defendants in this lawsuit were freelancers and investors in Company A, a stock corporation that engaged in unauthorized fund-raising*.

The chairman and the managing director of Company A were convicted of, among other charges, violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission (hereinafter the "Unauthorized Fund-Raising Act") along with fraud, and some of the company's officers and employees were likewise convicted of the same charges.

The defendants had agreed to receive from Company A an amount calculated by multiplying their investments by a certain commission rate, and they received more than 100 million won as sales commissions.

After rehabilitation proceedings for Company A commenced, the plaintiff, who had been appointed as the new custodian, claimed that the sales commissions the defendants had received constituted unjust enrichment or an unlawful act, and sought their return and damages.

The defendants, however, argued that the sales commissions had been lawfully paid under an oral agreement and that, under the provision on performance for an illegal cause, the plaintiff could not claim the return of unjust enrichment.

* Unauthorized fund-raising: the business of raising funds from an unspecified number of persons without obtaining authorization or permission under other statutes or completing registration, reporting, or similar procedures.

Claim for Return of Unjust Enrichment, What Are the Relevant Statutes and Precedents?

As a matter of principle, where the other party has received property without a legal cause, that party must return it; however, where it constitutes performance for an illegal cause, no claim for its return may be made.

▣ Civil Act

Article 741 (Contents of Unjust Enrichment)

A person who, without a legal cause, gains a benefit from the property or labor of another and thereby causes loss to that person shall return such benefit.

Article 746 (Performance for an Illegal Cause)

Where property has been given or labor has been provided for an illegal cause, the return of such benefit may not be claimed. This shall not apply, however, where the illegal cause exists only on the part of the beneficiary.

The illegal cause referred to in Article 746 of the Civil Act, which is a ground barring a claim for the return of unjust enrichment, means a case in which the act constituting the cause violates good morals or other social order.

- See Supreme Court, Decision of May 29, 2001, 2001 Da 1782, and others

Where a performance constitutes performance for an illegal cause and the illegal cause exists on the part of the person rendering the performance, that person may not, as a matter of principle, claim the return of such performance for an illegal cause, regardless of whether an illegal cause also exists on the part of the beneficiary or whether the degree or illegality of the beneficiary's illegal cause is greater than that of the person rendering the performance.

- See Supreme Court, Decision of December 10, 1993, 93 Da 12947, and others

2. Claim for Return of Unjust Enrichment, What Was the Court's Determination?

The District Court that heard the claim for return of unjust enrichment ruled as follows.

The plaintiff argued that the sales commissions Company A had paid to the defendants violated good morals or other social order and that, having been paid without any legal basis, they should be returned.

The court, however, held that the sales commissions paid by Company A constituted performance for an illegal cause and dismissed the plaintiff's claim for the return of unjust enrichment.

The court also found that, because the defendants were victims of Company A's unauthorized fund-raising, the defendants' illegality was not significant.

3. Claim for Return of Unjust Enrichment, Daeryun's Strategy

We analyzed the District Court's judgment, which held that where a performance constitutes performance for an illegal cause, the return of unjust enrichment may not be claimed.

Contracts that constitute performance for an illegal cause, such as gambling or human trafficking, do not receive the protection of the law. In other words, a juristic act that violates good morals or other social order is void. On this basis, the Civil Act does not recognize a claim for the return of unjust enrichment with respect to performance for an illegal cause.

A claim for return may be made, however, where the illegal cause exists only on the part of the beneficiary.

As shown, a claim for return of unjust enrichment under the Civil Act can be rather complex. If you become involved in such litigation, you may wish to retain a 🔗civil litigation attorney of Daeryun Law Firm LLP to obtain assistance.