The Defence of Simultaneous Performance
Study the “The Defence of Simultaneous Performance” flashcard set — 13 cards. What is the purpose of the rule?, Requirement ③ — why does timing matter?…
Take a copy in CardJet| Term | Definition |
|---|---|
| What is the defense of simultaneous performance (동시이행의 항변권) and what does it allow a party to do? | In a bilateral contract each party's obligation is conditioned on the other party's performance. The defense allows a party to refuse performance of its own obligation until the other party is ready and willing to perform the corresponding obligation — unless the parties have agreed otherwise. |
| What does Art. 536(1) provide, and what is its proviso? | One of the parties to a bilateral contract may refuse performance of his/her own obligation until the other party tenders performance of his/her obligation. Proviso: this does not apply where the obligation of the other party is not yet due. |
| What is the purpose of the rule? | To maintain fairness between the parties and to prevent one party from bearing the risk of performing first without assurance that the other will perform. Neither party should be forced to perform without receiving the agreed counter-performance. |
| What are the four requirements of the defense? | ① A bilateral contract (쌍무계약) — both parties have obligations toward each other arising from the same contract. ② Reciprocal and corresponding obligations (대가적 관계) — each party's obligation is the consideration for the other's. ③ The obligations are due at the same time. ④ The other party has not offered performance. |
| Requirement ③ — why does timing matter? | The defense applies where the obligations are to be performed simultaneously. If one party's obligation is due earlier than the other's, the defense generally cannot be invoked — the same idea as the proviso to Art. 536(1): not where the other party's obligation is not due. |
| Requirement ④ — what ends the defense? | A proper tender of performance by the other party. Once the other party tenders proper performance, the party can no longer rely on the defense. |
| What are the effects of exercising the defense? | The party may refuse to perform its obligation until the other party performs or offers performance. The obligation is not extinguished — only the duty to perform is suspended. |
| What effects follow from the mere existence of the simultaneous performance relationship, without invoking the defense? | (1) The obligor is relieved from liability for delay — no damages for non-performance during that period. (2) Set-off is prohibited where the claim subject to the defense is used as the active claim. |
| What is the limit of the defense (Supreme Court 89다카4298)? | The defense allows a party to delay performance without liability for late performance, but it does not grant a right to enjoy or use the property in the party's possession. A party who must return property gains no right to continue using or benefiting from it merely because the counter-performance has not yet been made. |
| Can a simultaneous performance relationship exist outside reciprocal obligations of a bilateral contract? Examples? | Yes — it may be recognized by statute or case law from the perspective of fairness. Examples: Art. 549 — Art. 536 applies mutatis mutandis to the duty of restitution after termination (Art. 548); lease — the tenant's duty to return the leased object ↔ the landlord's duty to return the security deposit on termination. |
| Supreme Court 98다13754 — what may the purchaser do when the object of sale is under attachment or an injunction prohibiting its disposal? | The purchaser may refuse or postpone payment of the purchase price until the attachment is cancelled or the injunction is discharged. |
| Supreme Court 95다1521 — which obligations were in simultaneous performance, and why could the owner not refuse to convey? | Construction contract: the builder was to build a three-storey house; as payment the owner was to transfer the top floor and one-third ownership of the land. The owner refused to convey, arguing that the builder owed him previously advanced money. Held: the owner could not refuse on that basis — the obligations of construction and conveyance were in a relationship of simultaneous performance. |
| What is the defense of feared risk under Art. 536(2), and what circumstances trigger it (Supreme Court 2011다93025)? | Additional protection for the party who is bound to perform first: where there is a significant cause by which the other party's performance becomes difficult, Art. 536(1) applies and the party may refuse performance. Such circumstances include a deterioration in the counterparty's creditworthiness or financial condition, or other factors making performance unlikely; requiring performance in that situation would be contrary to fairness and good faith. A reasonable concern that the other party will not perform its corresponding obligation is sufficient to suspend performance. |