Originally from Force Majeure and Hardship in the Asia-Pacific Region

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Questions

I.  Force Majeure

A.  Background and definition of force majeure in Korea

1.    Does Korea recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?

While there are several explicit references to “force majeure” in Korean statutory law, they are all found in niche legal contexts. Specifically, the term is explicitly mentioned only in certain provisions related to promissory notes, transportation/cargo shipping and employment/industrial accident compensation insurance, respectively, as set out below in section B.7. There is no general statutory principle of force majeure and no explicit definition of the term.

However, a handful of Korean court decisions have considered and applied the concept of force majeure in other legal contexts. In those cases, the courts have generally taken the position that a “force majeure event” may result in an impossibility to perform contractual obligations without any negligence of the obligor, thereby limiting any liability for such non-performance. Korean law provides that when a party defaults on its contractual obligations because the “performance has become impossible and where this is not due to the obligor’s negligence,” the counterparty cannot claim damages. Conversely, the party so defaulting “is not entitled to counter-performance (by the obligee).”