1. The Client's Situation
Our client A entered into a service agreement with an external production company B for the filming and editing of A's planned video content, and, as part of performing the agreement, paid an advance of approximately 4.4 million won. However, due to a schedule change, the actual filming did not take place, and even though the agreement was terminated without any separate service having been provided, B refused to refund the advance, citing internal preparation costs and opportunity costs.
2. Your Legal Team's Advice
Your Legal Team established a strategy based on the principle under the Civil Act and case law that an advance is an amount paid on the premise that a service will be provided and must be refunded if the service is not performed. After closely reviewing the contracting process and the counterparty's assertions, we emphasized the fact that the counterparty had not substantially performed the agreement, and sent a certified letter of content pointing out the unreasonableness of the refusal to refund, thereby giving notice of legal action.
3. Outcome
Through Your Legal Team's advice, we organized the legal basis for the claim to refund the advance and formally demanded it from the counterparty, thereby laying the legal groundwork for a future civil lawsuit or preservative measure. We are currently awaiting the counterparty's response and plan to proceed with follow-up procedures depending on whether they respond.