The reliance interest in damages for breach of contract was extremely limited. The traditional view holds that only the case of void contracts can be the problem due to the character of "reliance interest" that is not only financial loss caused by creditors who believe contracts is valid, but also c...
The reliance interest in damages for breach of contract was extremely limited. The traditional view holds that only the case of void contracts can be the problem due to the character of "reliance interest" that is not only financial loss caused by creditors who believe contracts is valid, but also costs incurred based on the reliance on the contract. Comparing to the reliance interest, expectation interest is kind off in ancial profit from the valid contract. After all, the reliance interest and the expectation interest are classified whether the contracts are valid or not. Moreover, the position of the reliance interest became more narrow due to the emergence of the theory that maintains the concept of the reliance interest is unnecessary. I think the concept of the reliance interest should be no more regarded as the interest based on the invalid contract. From the traditional perspective, the reliance interest was frigidly classified by not the substantial characteristic of interest, but validness or invalidness. What I thought is when we believe a contract is valid, we normally believe not only conclusion of the contract, but also fulfillment of the contract. That is, believing the validness of the contract is that the subject of the reliance is both of the conclusion of the contract and the fulfillment of the contract. In terms of interest, we need not to confuse classifying reliance interest and expectation interest with setting limits to admit damage of the valid contract caused by the belief of the validness. Although both concept of reliance interest and expectation interest have similarity, reliance interest should not be regarded useless concept. Similarity doesn't mean that it is impossible to classify both concepts. I also think reconsidering and classifying those concepts is appropriate in that we set one additional criterion in ambiguous Art 393 of the civil law. The traditional view is based on a provision about the initial impossibility in Art 535 of the civil raw. Indeed, I have questioned whether this provision is applicable only if there liance interest is invalid. Moreover, I think according to the point that the contract of initial impossibility is not invalid, the reliance interest in Art 535 of the civil law should not be regarded the concept premising reliance interest is void. If we consider the initial impossibility void, that may cause a lot of legal contradictions. We need to understand initial impossibility based the liability framework on the in Art 390 of the civil law. There liance interest in Art 535 of the civil law is not the interest which premises of nullity. As initial impossibility in Art 535 of the civil law is not void, there lianc As initial impossibility in Art 535 of the civil law is not void, there liance interest is no longer the interest that only appear with invalidity. Furthermore, we need not consider only the expectation interest is recognized with validity. I maintain that the reliance interest should be also recognized with validity. I think it is not appropriate that traditional view approves only the reliance interest in the case of invalidity with the exception of rescission, warranty liability, liability of non-negligence, precontractual liability. What is purpose of the compensation for damage? It is for victims to recover the damage appropriately. In case of an default on an obligation, expectation of the contract ingparties is the main factor of the loss or damage, because the relationship of contract is based on the trust. Generally, as the compensation for torts intends to restore to normal(restitution interest, reliance interest), but compensation for the default on an obligation aims at compensation for the expectation interest. However, compensation interest that should be protected by compensation for damage can be rebated by the various view point, as the expectation or trust is formed simultaneously when we made contract. If we think about the general purpose of the compensation for the default on an obligation, we can also set two view point. Compensation for damage is understood not only by the way to actualize the creditor's status according to original contract context, but also by the way to clear off the contract. Compensation for damage basically means recovering abnormal situation. I think recovering abnormal situation can be realized by conducting of the contract and by getting out of the contract. I think that is also appliable to the both cases: compensation for damage due to contract cancel, warranty responsibility. I regard it is not reasonable that in case of warranty responsibility, reliance interest is applied, when there is no fault. Reliance interest is no longer limited concept due to the voidness or similar meaning of the voidness. Consequently, The reliance interest and the expectation interest as interest of damage which is based on whether the conclusion of contract is valid. In case of coming out necessity for compensation of damage, both interests should be recognized with independent standing according to the each cases. Through this process we may provide new way to understand Art 393 of the civil law. The reliance interest need to be reconsidered.
The reliance interest in damages for breach of contract was extremely limited. The traditional view holds that only the case of void contracts can be the problem due to the character of "reliance interest" that is not only financial loss caused by creditors who believe contracts is valid, but also costs incurred based on the reliance on the contract. Comparing to the reliance interest, expectation interest is kind off in ancial profit from the valid contract. After all, the reliance interest and the expectation interest are classified whether the contracts are valid or not. Moreover, the position of the reliance interest became more narrow due to the emergence of the theory that maintains the concept of the reliance interest is unnecessary. I think the concept of the reliance interest should be no more regarded as the interest based on the invalid contract. From the traditional perspective, the reliance interest was frigidly classified by not the substantial characteristic of interest, but validness or invalidness. What I thought is when we believe a contract is valid, we normally believe not only conclusion of the contract, but also fulfillment of the contract. That is, believing the validness of the contract is that the subject of the reliance is both of the conclusion of the contract and the fulfillment of the contract. In terms of interest, we need not to confuse classifying reliance interest and expectation interest with setting limits to admit damage of the valid contract caused by the belief of the validness. Although both concept of reliance interest and expectation interest have similarity, reliance interest should not be regarded useless concept. Similarity doesn't mean that it is impossible to classify both concepts. I also think reconsidering and classifying those concepts is appropriate in that we set one additional criterion in ambiguous Art 393 of the civil law. The traditional view is based on a provision about the initial impossibility in Art 535 of the civil raw. Indeed, I have questioned whether this provision is applicable only if there liance interest is invalid. Moreover, I think according to the point that the contract of initial impossibility is not invalid, the reliance interest in Art 535 of the civil law should not be regarded the concept premising reliance interest is void. If we consider the initial impossibility void, that may cause a lot of legal contradictions. We need to understand initial impossibility based the liability framework on the in Art 390 of the civil law. There liance interest in Art 535 of the civil law is not the interest which premises of nullity. As initial impossibility in Art 535 of the civil law is not void, there lianc As initial impossibility in Art 535 of the civil law is not void, there liance interest is no longer the interest that only appear with invalidity. Furthermore, we need not consider only the expectation interest is recognized with validity. I maintain that the reliance interest should be also recognized with validity. I think it is not appropriate that traditional view approves only the reliance interest in the case of invalidity with the exception of rescission, warranty liability, liability of non-negligence, precontractual liability. What is purpose of the compensation for damage? It is for victims to recover the damage appropriately. In case of an default on an obligation, expectation of the contract ingparties is the main factor of the loss or damage, because the relationship of contract is based on the trust. Generally, as the compensation for torts intends to restore to normal(restitution interest, reliance interest), but compensation for the default on an obligation aims at compensation for the expectation interest. However, compensation interest that should be protected by compensation for damage can be rebated by the various view point, as the expectation or trust is formed simultaneously when we made contract. If we think about the general purpose of the compensation for the default on an obligation, we can also set two view point. Compensation for damage is understood not only by the way to actualize the creditor's status according to original contract context, but also by the way to clear off the contract. Compensation for damage basically means recovering abnormal situation. I think recovering abnormal situation can be realized by conducting of the contract and by getting out of the contract. I think that is also appliable to the both cases: compensation for damage due to contract cancel, warranty responsibility. I regard it is not reasonable that in case of warranty responsibility, reliance interest is applied, when there is no fault. Reliance interest is no longer limited concept due to the voidness or similar meaning of the voidness. Consequently, The reliance interest and the expectation interest as interest of damage which is based on whether the conclusion of contract is valid. In case of coming out necessity for compensation of damage, both interests should be recognized with independent standing according to the each cases. Through this process we may provide new way to understand Art 393 of the civil law. The reliance interest need to be reconsidered.
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