A Comparative-law Examination on Korean Judicial Precedents Related to the Interpretation of Contract

Abstract

This Article compared judicial precedents of contract interpretation in Korea with international civil norms and legislations and case laws of other countries, and came up with new legal principles of contract interpretation, which are very helpful to international contracts of Korean businesses. Three issues were treated in this Article. The Article began, in Part Ⅱ, witha description of the primary subject matter of contract interpretation. Part Ⅲ examined what is the legal nature of supplementary interpretation. Finally, Part Ⅳ explained how the interpretation of contract is treated in litigation. To put it another way, Part Ⅳ showed whether in litigation, the interpretation of contractis classified as a matter of law or a matter of fact. First, when it comes to the principle subject matter of contract interpretation, differently from the attitude of Korean Supreme Court, the international civilnorms and the legal principles of other countries have similar provisions that the primary subject matter of contract interpretation is interpreted to be the ulteriorintention of the declarant. For whatever reason, to correspond with this international trend, it seems that a provision that clearly defines that the primary subject matter of interpretation is the declarant’s ulterior transaction intent isnecessary to be enacted in Korea. Second, in connection with the legal nature of supplementary interpretation, it seems that the Korean Supreme Court regards the supplementary interpretation as a kind of contract interpretation. On the other hand, the attitudes of the international civil norms and other countries are different. For various reasons,including judicial economy, legal logic, and private autonomy, I’d maintainedthat supplementation should be liberated from interpretation by enacting a provision that clearly stipulates that interpretation and supplementation aredistinguished from each other. Finally, as far as it is concerned whether in litigation, contract interpretationis treated as a matter of law or a matter of fact, the decision of the Korean Supreme Court seems to be similar with German law and American law.