Court: Oral Termination of Lease Contract Is Also Effective

Seoul Central District Court / Photo by Honam Moon munonam@

[Asia Economy Reporter Seongpil Cho] A court ruling has determined that a verbal termination of a lease contract is effective even without a written notice.

According to the legal community on the 23rd, Judge Jinsu Park of the Civil Division 68 at the Seoul Central District Court ruled partially in favor of tenant A in a lawsuit against landlord B regarding the lease deposit. In February of last year, A signed a lease contract for a multi-family house owned by B in Hyehwa-dong, Jongno-gu, Seoul, with a deposit of 60 million KRW and a monthly rent of 350,000 KRW for a two-year term. Although A was initially scheduled to move in on March 8 of that year, due to plumbing work in the house not being completed even after about three weeks of waiting, A eventually notified B of contract termination on March 26. However, B refused to return the deposit, claiming the termination notice was improper, leading A to file a lawsuit for its return.

The key issue in the lawsuit was whether the termination notice without written execution was valid. B argued that since A did not notify the termination intention in writing, the contract termination was ineffective. B cited the clause in the lease contract stating that termination is possible only after written notice as the basis for this claim. The court's judgment differed. The court stated, "The clause was intended to clearly indicate the fact of demand for performance," and added, "It is difficult to interpret this as denying the effect of a demand for performance if not made in writing." The court further noted, "B failed to complete the construction and deliver the house despite repeated understanding from A. The termination notice given directly by A to B is valid," and ordered B to pay A a total of 9.12 million KRW, including the remaining deposit and damages.

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