이행이익 및 신뢰이익

Abstract

A damages claim on the breach of a contract is governed by the legal doctrines including general damages, special damages and foreseeability in Korea. These three concepts are originated from the article 393 in the Korean Civil Code. The Korean Supreme Court held that proximate cause limitation is said to complement these three legal doctrines to limit the coverage of injury. The article 535 of the Korean Civil Code stipulates that reliance interest will be compensated within the limitation of expectation interest in the instances when a contract is not consumated. The Korean Supreme Court literally applied the article to the cases to breach a contract before the its consummation. However, it extended the application of the article to the instances in 1992 on the case of 91da29972 on which contracts are consumated and rescinded afterward. It upheld that the reliance interest will be used to account the damage in the instances of the rescission of contracts. It is reasonable to apply the reliance interest on all the rescission cases. It also upheld in the same ruling that the reliance must be recovered within the limitation of expectation interest. The ruling in this part is partially correct and partially wrong. To evaluate the ruling, we need to define the exact concept of reliance and expectation interest and explore the historical origination of these definition.

When the court of king's bench confirmed the complaint filed by victims, it compensated them with damages based on reliance interests in the early enforcement era. But, expectation interest became dominated because it was very effective and simple to apply. Whenever we make a contract, we evaluate and specify the value of its enforcement. In spite of its merits, expectation interest is not perfect. After a contract is made, we need to invest in trusting its full performance, before it is not performed. As capitalism grows its power in the economic system, the investment should be protected. Reliance interest plays a good role to protect the trustworthiness of economic system. Professors, Mr. L.L. Fuller and William R. Perdue Jr. published their paper, the Reliance Interest in Contract Damages, in 1936. They insisted that reliance interest should be protected as damages of breach of contracts.

As explained, the Korean Supreme Court recognized the concept of reliance interest on the breach of contracts. We need to research fully the true concept of reliance interest and the role on the damages.