Supreme Court overturns damages ruling against commercial property sales staff, remands case

On May 8, 2026, the Supreme Court overturned the portion of an appellate ruling holding two commercial property sales agency employees liable for damages and remanded the case to the Seoul High Court. The appellate court had ordered the employees to pay 55,069,565 won for loan interest and other losses; the finding that the property sales company was not liable remained intact.

The dispute began with the sale of a newly built commercial property in Pyeongtaek, Gyeonggi Province. On August 19, 2022, a sales agency employee told an investor that a restaurant tenancy had been secured for three years, with a deposit of 35,000,000 won and monthly rent of 3,450,000 won. The investor signed a purchase contract for 893,664,000 won on August 30 of that year.

After the restaurant terminated its lease following the purchase agreement, an employee issued a second written undertaking promising financial support equivalent to six months of rent regardless of whether the property was leased. The investor paid the balance and acquired ownership in February 2023, but no tenant moved in. After selling the property in May 2024, the investor sued the property sales company and two employees for damages.

The Supreme Court said that assessing permissible exaggeration in advertising requires considering together how specific and definite the statements were, how closely they matched reality, and how they affected decision-making. It identified these factors under the existing standard that specific false statements about material matters constitute deception, while exaggeration within the bounds accepted in commercial transactions does not.

A principal basis for the reversal was the second written undertaking, which did not depend on a lease being signed. The Supreme Court found substantial grounds to interpret it as an agreement under which the parties accepted the termination of the original lease and arranged partial financial support if no new tenancy materialized. It also found that the appellate court had misinterpreted legal principles and violated rules of logic and experience by finding deception only at the balance-payment stage while rejecting deception at the purchase-contract stage.