Deals & Cases

Corporate 2019-12-27
  • Share

    1. URL

DR & AJU Represents Client in a Lawsuit Where the Court Dismissed the Entire Claim of the Plaintiff Demanding Restitution of Purchase Price

In this case, Company B which entered into a sales agreement of ELT books with an existing exclusive distributor Company A of an overseas publisher claimed the restitution of the purchase price in the amount of approximately KRW 4.9 billion against the Korean branch of the overseas publisher and Company A by arguing that the sales agreement was invalid, canceled or rescinded and that the defendants were liable for preliminary default, breach of warranty or tort as the defendants lured and defrauded Company B to sell the ELT books to Company B as if they were marketable although they were in fact dead inventory which was hardly salable.

DR & AJU represented Company A in filing a separate action against Company B and its joint guarantor claiming the payment of the unpaid purchase price in the amount of approximately KRW 9.1 billion. DR & AJU made it clear that the ELT book was not dead inventory and that it should be within Company B’s responsibility to determine whether to purchase the ELT books after considering marketability or salability thereof. Further, DR & AJU argued that even if the ELT books were not sold as originally expected by Company B, that alone was not sufficient to conclude that there was no marketability or salability of the ELT books as the demand and marketability of the ELT books come out from a combination of various factors, such as the situation in the English teaching materials market, changes in the educational environment and preference for English teaching methods.

The first trial court found that the ELT books were not considered to be dead inventory, that Company A was not silent or making any false notice with respect to the possibility of sale of the ELT books and that Company B was not misled of the possibility of sale of the ELT books when entering into the sales agreement. Accordingly, the court rejected all of Company B's claims against Company A and other defendants and cited all of Company A’s claims for the payment of the unpaid purchase price against Company B and its joint guarantor. Company B appealed which was rejected by the appellate court for the same reasoning as in the first trial court.

In this case, Company B made all contractual and legal claims, including invalidation, cancellation or cancellation of the contract, default, liability for defects, or liability for illegal activities, and DR & AJU thoroughly refuted Company B's claims by thoroughly grasping facts and legal issues of the case, leading to a ruling that rejected Company B's claim to the appellate court of the case.