Termination of Business Transfer Agreement and Refund of Transfer Fees

Client Information

Company / Plaintiff
 

Case Details

The plaintiff, as the party acquiring a business, entered into a business transfer agreement with the defendant, the party transferring the business. However, the agreement led to a legal dispute over title transfer and the refund of a lease deposit.

The two parties, who were acquaintances, executed the agreement through a conversation on KakaoTalk, after which the plaintiff paid tens of millions of won as the transfer fee. Despite agreeing to transfer the business title, the defendant repeatedly delayed the process, citing financial difficulties.

During this period, the defendant’s lease deposit return claim was seized, making it impossible for the plaintiff to renew the lease agreement. Consequently, the plaintiff sought assistance from Decent Law Firm to terminate the agreement and claim a refund of the transfer fees through legal action.

The key legal issue in this case was whether the obligations of the business transfer agreement were properly fulfilled.

Business transfer entails the transferor relinquishing their status as the business operator and the transferee acquiring the assets necessary to continue the ongoing business. The plaintiff had paid the full transfer fee to acquire the business properly, creating an obligation for the defendant to complete the title transfer.

However, the defendant continuously delayed the title transfer and further failed to resolve the seizure of their lease deposit return claim, putting the lease renewal at risk. Despite the defendant’s assurances that no issues existed, it was revealed that these claims were false.

Thus, the defendant’s failure to fulfill their obligations for title transfer and resolving the lease deposit seizure constituted a breach of contract. Moreover, the defendant’s lack of financial resources rendered them unable to fulfill the agreement, which amounted to non-performance of obligations.