A sales agency employee mistakenly informed a prospective buyer that a loan for the interim payment was possible, leading to the signing of an officetel contract, but when the loan was later denied, the court ruled that the buyer could cancel the contract.
On the 16th, Judge Kim Jong-chan of the Civil Division 10 at Seoul Southern District Court partially ruled in favor of plaintiff A (represented by attorney Song Joo-eun of Youngmin Law Firm) in a damages claim lawsuit (2024가단208739) filed against developer B, sales agency C, and agency employee D, ordering developer B to pay approximately 63.71 million KRW.
A visited a model house of an officetel in Dobong-gu, Seoul, and received sales-related explanations from employee D of agency C, who was in charge of sales contracts. In August 2022, A signed a sales contract. During the consultation, A explained that as a freelance yoga instructor with reduced income due to the COVID-19 pandemic and often paid in cash, it was difficult to accurately prove income. After inquiring about this situation with developer B and others, D explained that an interim payment loan was possible. According to the sales contract, developer B introduced financial institutions for the interim payment loan, and in May 2023, A applied for the loan but was denied. A filed a lawsuit claiming, “I signed the contract based on the explanation that the interim payment loan was possible. If not for D’s incorrect explanation, I would not have signed the contract, so this sales contract should be canceled.”
The court ruled, “A can cancel the sales contract, and the sales contract was lawfully canceled as of February 8, 2024, when the copy of the complaint expressing A’s intention to cancel was delivered to developer B.”
Judge Kim stated, “It should be recognized that A signed the sales contract believing D’s statement that the interim payment loan was possible. Although the sales contract includes a clause that the buyer must pay if the interim payment loan is not executed, and A signed a confirmation stating ‘there is no separate guarantee from the sales consultant regarding the execution of the interim payment loan,’ since D gave a different explanation, this mistake was caused by agency employee D and constitutes a significant error regarding the legal act of the sales contract.”
However, Judge Kim did not acknowledge illegal acts by agency C and employee D. He said, “Based solely on the evidence submitted by A, it is difficult to conclude that D deceived A about the possibility of the interim payment loan, and there is no other evidence to support that D committed an illegal act against A.”
Attorney Song Joo-eun, who led the victory, said, “The court’s strict judgment against the sales agency’s unreasonable contract solicitation, which disregards the realistic needs and demands of buyers, enabled us to win in a sales contract cancellation lawsuit often called ‘hitting a rock with an egg.’”
Park Su-yeon, Legal Times Reporter
※This article is based on content supplied by Law Times.
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