Korean Law Demystified!

Supreme Court of Korea: The Customer is NOT Always Right!

[Example Situation]


Mr. Kim is the proud owner/franchisee of a bakery in Gunpo City, South Korea. One day, a Mr. Lee buys candies from Mr. Kim’s bakery. Four days later, Mr. Lee files a complaint straight to the franchisor’s head office. His complaint: The candies he bought had passed their expiration date by more than 2 months! (FYI, he complains in person with photos as evidence.) As settlement, Mr. Lee demands 2.5 mil won (approx. 100 times what he paid). The head office says no, and Mr. Lee now reports the incident to the police. Soon, Gunpo City orders Mr. Kim to suspend operations for 15 days. Mr. Kim is furious! He’s positive Mr. Lee is but a gold-digging liar! Mr. Kim files a claim (against Gunpo City) asking the court to revoke the order. Q: How is a Korean court likely to decide?

The above example is similar to a case recently reported here in Korea.

I. The Ruling

The Supreme Court reversed and remanded an appellate court decision which had rejected Mr. Kim’s claim. (The trial court had rejected his claim also.) In the Court’s view, Mr. Kim was right. Mr. Lee was a liar!

II. Reasoning

We’re not God, so it’s impossible to know with 100% certainty a person’s exact intentions. The court can only cautiously infer – based on the person’s conduct in the light of the surrounding circumstances. In this case, these are a few things the Court probably took into account:

1. That Mr. Lee went straight to the franchisor’s head office + (straight up) demanded an unusually large amount of money.

2. That franchisee owners can normally receive a full refund for any inventory that couldn’t be sold before its expiration date.

3. That no sanitation problems were found when Mr. Kim’s bakery was last inspected by the head office prior to the incident.

III. Additional Comments

– Why then did the lower courts reject Mr. Kim’s claim? Maybe because (Korean) courts do have some tendency to uphold orders issued by government agencies. (If such orders were easily revoked, too many people would perhaps want to challenge them.) In this case, the order seems have been issued largely based on Mr. Lee’s vociferous allegation.

– In Korea, the Supreme Court is (generally) supposed to hear only disputes that hinge on a matter of law, not fact. In practice, however, the Court has pretty much done away with this principle (as we can see from this case). There are 14 Supreme Court Justices in Korea, but they (alone) handled about 40,000 cases last year! Recently, there was serious talk of setting up a separate court within the Supreme Court to exclusively handle cases of lesser import, but sadly nothing became of it.

– Yes, the franchise (in question) was Paris Baguette. But the photo at the very top is of one I stumbled upon in the U.S. Near Stanford University.

Thank you for reading.

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