Court: "Unilateral Contract Change Notification by Administrative Agency Without Explicit Agreement Is Illegal"

[Asia Economy Reporter Seongpil Jo] The court ruled that if an administrative agency renews a contract with a consigned business operator without explicitly agreeing on the changed conditions, any contract notification based on that is illegal.

According to the legal community on the 13th, the Seoul Administrative Court Administrative Division 6 (Chief Judge Seongyong Lee) ruled in favor of the plaintiff in a lawsuit filed by Medical Corporation A against Gangnam-gu, seeking cancellation of the notice regarding the extension of the consignment period for a nursing hospital.

The court stated, "It cannot be considered that both parties definitively agreed on the direct management transition based solely on some conversations held during the meeting between the plaintiff and the defendant," and added, "Gangnam-gu had the authority and responsibility to ensure proper review was conducted but failed to properly fulfill its role."

Previously, Gangnam-gu had notified Medical Corporation A, which had been operating Haengbok Nursing Hospital in Segok-dong under a five-year contract since 2014, of its intention to transition to direct management in 2018, one year before the contract expired.

At that time, Medical Corporation A accepted Gangnam-gu's proposal on the condition that all hospital staff would be retained upon the direct management transition and that if the hospital were to be consigned to the private sector again in the future, it would be entrusted to them.

However, Gangnam-gu notified that the consignment period would only be extended until the direct management transition without clearly expressing its intention regarding these conditions, and Medical Corporation A filed a lawsuit requesting the cancellation of this unilateral notification.

This content was produced with the assistance of AI translation services.