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Full Victory in Both Trial and Appeal for Service Fee (Contract Payment) Claim

Full Victory in Both Trial and Appeal for Service Fee (Contract Payment) Claim

Client Information
Individual / Plaintiff

 
Case Details

The client, Company A, is a video production company that entered into a contract to produce a music video for a K-pop girl group debut, with a total contract value of KRW 100 million.

At the same time, the parties structured an additional sublease agreement for office expansion.
Part of the service fee was offset against the lease deposit, creating a combined contractual structure.

The client fulfilled its obligations and delivered the final music video within the agreed deadline.

However, the opposing company failed to:

• Pay the remaining balance of KRW 25 million and VAT of KRW 10 million, and
• Return the lease deposit of KRW 75 million after the sublease term ended.


Despite repeated requests, the defendant refused to resolve the matter, citing financial difficulties.
The client then sought legal assistance from Decent Law Firm to recover the unpaid amounts.

Decent's Strategy
1. Establishing the Correct Contracting Party
This case involved a complex contractual structure where the original contract party was later replaced by another entity.

The defendant attempted to deny liability by disputing its status as the contracting party.

However, we successfully demonstrated that:

• The defendant had directly made partial payments under the contract, and
• The contractual relationship had effectively transferred to the defendant.

The court ultimately recognized the change of contracting party and confirmed the defendant’s liability.


2. Proving Full Performance of Services
The client had delivered the final music video within the agreed timeframe.

Once delivery was completed,
the obligation to pay the remaining KRW 25 million plus KRW 10 million VAT had clearly arisen.

The defendant’s failure to pay constituted a clear breach of contract.


3. Enforcing Joint and Several Guarantee
The CEO of the defendant company had personally executed a joint and several guarantee covering:

• The lease deposit return obligation, and
• The outstanding service fee.

The court held that both the company and its CEO were jointly liable for the full amount of KRW 110 million.
Outcome
"Full Victory at Both Trial and Appellate Levels"

• Trial Court Decision
The court ruled that the defendants are jointly liable to pay KRW 35 million for the outstanding service fee and VAT, as well as KRW 75 million for the lease deposit, for a total of KRW 110 million, together with statutory interest.

• Appellate Court Decision
The appellate court dismissed all appeals filed by the defendants and upheld the trial court’s decision in full, additionally ordering the defendants to bear all appellate litigation costs.

Even in complex cases involving changes in contracting parties, offset payment structures, and multiple overlapping legal relationships such as service agreements and lease arrangements, a well-structured legal strategy can lead to full recovery of the claimed amounts.
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