Demanding Investment Contributions After Dissolving a Partnership…Court: No Unilateral Claim Without a Detailed Agreement

A court ruling has held that if, when running a business together and later winding it down, the parties did not agree precisely on how much each would invest, one cannot later demand more money from the other on the ground that one paid more.

According to the legal community on the 25th, the Seoul Eastern District Court in April rejected the demand of A, a businessman, in a lawsuit seeking payment of over 100 million won in additional investment funds against B, with whom he had jointly operated a golf practice range.

A and B began a golf-range partnership in 2022, agreeing to split profits and responsibilities 50-50. The two decided to wind down the business in 2024, and at that time agreed that B would take over all of the assets and debts tied to the business.

However, after the business ended, A filed suit claiming that he had spent about 780 million won while B spent only about 560 million won. His argument was that, contrary to the 50% agreement, he had paid more, so B should compensate him for the difference, a loss of over 100 million won.

The court did not accept A's argument. The court explained that if they only agreed to divide the business at a 50% ratio but did not specifically set how much each was to pay, one side cannot be held liable just because they paid less.

It also pointed out that when the two wrote the contract ending the business, A raised no issue at all about the portion he had paid more. The court judged that A's personal memo pad and card usage records submitted as evidence were insufficient to believe that he had actually spent that much more.

Attorney Jang Hyun-ji of Daeryun LLC, who represented B, said it was a case in which the plaintiff demanded investment funds calculated unilaterally, and said she explained to the court, and had recognized, that if there was no agreement at the outset on how much each would pay, there was no obligation to bear responsibility.

Reporter Hwang Jeong-won (garden@sidae.com)

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