The Relationship Between Juridical Acts Contrary to Public Policy and Performance Rendered for an Illegal Cause under Korean Law
Korean Civil Code Articles 103 and 746 side by side: when a juridical act is void for being contrary to social order, and when performance cannot be taken back.
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|---|---|
| Art. 103 what question does it answer? | Is the act VALID? → No, it is void. |
| Art. 746 what question does it answer? | Can the giver get the performance BACK? → No, return is barred. |
| Why are Art. 103 and Art. 746 studied together? | Different questions (valid? / back?), but in practice they work together. |
| 반사회질서 법률행위 | Juridical acts contrary to social order = Art. 103. |
| 불법원인급여 | Performance for an illegal cause = Art. 746. |
| Art. 103 effect | Absolute nullity: void from the beginning, no legal effect at all. |
| General rule of void contracts | Everything goes back (unjust enrichment). |
| Art. 746 effect | Gave property or service for an illegal cause → cannot demand it back. |
| Proviso of Art. 746 | If the illegal cause is ONLY on the receiver's side → the giver CAN get it back. |
| Clean hands doctrine | The court does not help a party with 'dirty hands', i.e. one who acted illegally himself. |
| Rationale of Art. 746 | Courts must not help people who act unlawfully; the law does not protect those who go against public policy. |
| Conditions for Art. 746 (SKI) | Serious illegality · Knowing participation · Innocent party can still recover. |
| Condition S | Sufficiently serious. Small violations are not enough. |
| Condition K | He knowingly (voluntarily) took part in the illegal purpose. |
| Condition I | Only one party is guilty, result? - The innocent party may get it back. |
| Art. 103 and Art. 746 relationship | Complementary. |
| Rule and exception | Rule: void → everything goes back. Exception: Art. 746 → no return for an illegal cause. |
| Court test steps | 1) Void under Art. 103? 2) Return barred under Art. 746? |
| Majority view | 'Contrary to good morals / social order' (103) = 'illegal cause' (746). |
| Minority view | Good morals → Art. 746 applies → no return. Social order only → Art. 746 does NOT apply → return possible. |
| Role of Art. 103 | Makes the act invalid → limits freedom of contract to protect basic social values. |
| Role of Art. 746 | Governs what happens after performance → limits return for an illegal cause. |
| Two goals of Art. 103 + Art. 746 | 1) Discourage unlawful agreements. 2) Protect the integrity of the legal system: no court help for illegal deals. |