The case deals with the so-called initial impossibility. The supreme court shows with this case that the Article 535 of korean civil code works as an useful instrument of resolution in practice. The court declares that a contract which burdens the par...
The case deals with the so-called initial impossibility. The supreme court shows with this case that the Article 535 of korean civil code works as an useful instrument of resolution in practice. The court declares that a contract which burdens the parties with actually or legally impossible duty is void and in this case the debtor who should have known this fact is obliged to compensate the creditor's reliance interest, not expectation interest. Especially the case emphasizes that the possibility of performance belongs to the control of debtor and the fault of creditor be strictly proved.
In this case comment I agreed with the conclusion of the court at least. It means that even if a contract with the initial impossibility is valid, it is basically a type similar to culpa in contrahendo or mistake. So the compensation of expectation interest cannot be obliged to debtor.
Additionally I commented roughly on the revision of the Article 535 so that we can accept the validity of initial impossibility but it's effect can and should be prescribed differently from the general responsibility of non-performance. Further the problematic of initial impossibility can be dealt with in the field of mistake, not performance of contract or culpa in contrahendo, which we find in several international legislations.