The law of damages functions as a fundamental mechanism that supplements private autonomy in both contract and tort by compensating losses caused by breach of obligation or wrongful conduct and restoring the injured party to the position prior to the ...
The law of damages functions as a fundamental mechanism that supplements private autonomy in both contract and tort by compensating losses caused by breach of obligation or wrongful conduct and restoring the injured party to the position prior to the infringement of rights. However, the scope and limitations of damages have developed differently across legal systems. While common law jurisdictions recognize that damages may serve deterrent and punitive functions in addition to compensation, Korean law, as part of the civil law tradition, has traditionally focused on compensation for actual loss.
With the expansion of international commerce, disputes involvingforeign elements increasingly arise before Korean courts. In maritime disputes concerning carriage of goods by sea, marine insurance, ship chartering, and maritime arbitration, English or American law is often designated as the governing law, or foreign judgments and arbitral awards rendered under common law systems are subject to recognition and enforcement in Korea.
This article examines three major common law doctrines—punitive damages, the duty to mitigate damages, and penalty clauses—and analyzes how they are interpreted and applied by Korean courts, particularly in maritime cases. It argues that these doctrines are selectively applied through the principles of the Korean damages system under private international law.