Reversing Unfavorable Contract Terms: Successful Recovery of Construction Costs Through Reconciliation
26-06-22 99
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1. Case Overview
The client completed construction for a food-related company but filed a lawsuit claiming unpaid construction costs as approximately 20 million KRW was not paid.
This case carried a significant risk of failing to properly recover the construction costs due to the delay penalty clause in the contract, which was drafted very unfavorably toward the client. Additionally, determining who was responsible for the construction delay was a crucial issue.
By meticulously reviewing the construction progress and related materials, we proved that the primary cause of the construction delay lay with the defendant, actively arguing that the client's claim for construction costs was justified. Through this, we established a negotiation and litigation strategy for practical cost recovery despite the unfavorable contract structure.
4. Result of Assistance
The court's Reconciliation Recommendation Decision was confirmed, obligating the defendant to pay the client approximately 16 million KRW. Furthermore, we established a strong enforcement mechanism by stipulating a 12% annual delay damage rate if the payment deadline is exceeded. This is a meaningful case where construction costs were successfully recovered despite unfavorable contract conditions, presenting a practical solution in a construction cost dispute.
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