Supreme Court: Buyer can recover funds for land bought from unauthorized representative

South Korea's Supreme Court has ruled that a buyer can partially recover funds for land purchased through a representative who lacked proper authority. The case involved a transaction of land worth 4.2 billion won (approximately $3 million USD) from a clan organization. The lower courts had initially ruled the sales contract invalid due to the representative exceeding his authority, meaning the buyer would lose ownership of the land and receive no refund. However, the Supreme Court overturned this decision in part. The court acknowledged that while the contract was invalid, the buyer should be able to recover the portion of the purchase price that was effectively used for the clan's benefit. The ruling sends the case back to the Suwon High Court to determine the exact amount to be returned. The dispute began when the clan's representative, identified as Mr. B, sold several plots of land, including the one to Mr. Im, before a court order suspended his duties. Mr. Im had paid 4.185 billion won for the land and completed the ownership transfer. He later sued to recover 2.3 billion won of the payment after the clan demanded the land back. The clan argued the contract was void as Mr. B was not a legitimate representative at the time of the sale. The Supreme Court's decision aims to prevent unjust enrichment by ensuring the clan returns funds that were legitimately used for its purposes, such as paying taxes and legal fees, while still upholding the principle that contracts made by unauthorized representatives can be invalid.