General Principles of Juristic Acts: Mistake, Fraud, Invalidity, and Exercise of Rights

Based on 160 consultation cases · Updated October 4, 2026 · Translated from the Korean original.

To cancel a contract or claim that it is void, you must consider requirements such as whether the mistake was material, whether the motive for contracting was disclosed to the other party, and the extent of any deception. The outcome may depend on the wording of the contract, the circumstances in which it was made, and the parties’ respective interests. It is therefore difficult to determine the contract’s terms or whether it can be canceled based on advertising or explanations alone.

People involved → Person making the declaration → Other contracting party → Possible third-party deceiver → A contract or other juristic act is disputed → Was there an essential mistake without gross negligence? → Was the declaration made through fraud or duress? → Do the terms, consideration, or disclosed motive violate good morals and social order? → The legal result depends on the applicable test and facts → The act may be void if the social-order test is met → Check whether a motive was disclosed and material; read wording in context → Check for specific material deception, good faith, and third-party knowledge → Check the right’s purpose and circumstances; greater harm alone is not abuse For clan property, check members, bylaws, and the meeting resolution → Yes — Civil Act Article 109(1) → No → Yes — Civil Act Article 110 → Yes — Civil Act Article 103 → Review the mistake or cancel…

Key points

A juristic act may be canceled if there was a mistake concerning an essential part of its terms, but it cannot be canceled if the person making the declaration was grossly negligent (Civil Act, Article 109(1) (민법 제109조 제1항)).
Being mistaken about real estate market prices is generally only a mistake concerning the motive for entering into the contract. It is necessary to consider whether the motive can be interpreted as having formed part of the contract and whether the mistake was material (Cases 1 and 7).
A declaration of intention made through fraud or duress may be canceled. If a third party committed the fraud or duress, it is also necessary to consider whether the other party knew or could have known of it (Civil Act, Article 110 (민법 제110조)).
A contract cannot be canceled merely because an advertisement contains exaggerations or falsehoods. It is important to determine whether specific false information about a material aspect of the transaction was provided to an extent contrary to the principle of good faith (Cases 3 and 18).
If the meaning of the wording is unclear, it is interpreted objectively by considering not only the text but also the motive and circumstances of the contract, its purpose, and customary practices (Case 23).
A juristic act may be void if its terms, conditions, or consideration—or a motive that was stated or disclosed to the other party—violates good morals and social order (Civil Act, Article 103 (민법 제103조)).
Whether the exercise of a right constitutes an abuse of rights is determined in the specific circumstances, including the purpose of exercising the right and whether it violates social order. The fact that the other party would suffer greater harm does not, by itself, amount to an abuse of rights (Civil Act, Article 2(2) (민법 제2조 제2항); Cases 11 and 25).
The distribution or management of a clan association’s property, and the appointment of its representative, require consideration of the association’s members and bylaws, as well as the substance and procedure of the general meeting’s resolution. The fact that a resolution is void does not automatically entitle an individual to claim a distribution in an amount of their own choosing (Cases 4, 8, 12, and 17).

Frequently asked questions

Q. Can I cancel a contract because I bought real estate for more than its market value?

Being mistaken about the market value is generally a mistake concerning the motive for entering into the contract, so it is difficult to cancel the contract on that basis alone. However, it is necessary to consider whether the motive can be regarded as having been expressed as part of the contract and whether the mistake was important enough to determine whether the contract would be made.

Case 1

Q. Can I cancel a document I signed because I misunderstood the type of guarantee?

If you thought you were signing a personal guarantee document without checking its contents, but in fact signed a joint and several guarantee document, this may constitute a mistake in the declaration. Whether it can be canceled depends on whether the mistake concerned an essential part of the document and whether the person who signed it was grossly negligent.

Case 2

Q. Can I cancel a contract if the area or projected returns in a sales advertisement differ from reality?

A contract cannot be canceled merely because an advertisement contains some exaggeration or falsehood. It is necessary to consider whether specific facts concerning a material aspect of the transaction were falsely represented to an extent contrary to the principle of good faith, and whether the advertised information became part of the actual contract.

Case 3, Case 18

Q. If a contract says “I will make every effort,” does that mean I must repay the other party’s debt?

That wording alone does not establish that you intended to assume a legal obligation or guarantee the debt. The objective meaning of the wording, the circumstances in which the contract was made, and its purpose must all be considered to determine whether a guarantee agreement was actually formed.

Case 23

Q. What can I do if the seller resells the property to someone else after I bought it first?

The second sale is not void merely because the second buyer knew that the seller was acting in breach of trust; it is important to determine whether the second buyer actively participated, for example by inducing or instigating that conduct. If the first buyer has not yet acquired ownership, they cannot directly seek cancellation of the registration from the second buyer. Other options, such as exercising the seller’s rights on the seller’s behalf, may be relevant.

Case 22

Q. Can I demand performance of a promise made in exchange for testifying in a lawsuit?

If the consideration for testifying goes beyond compensating for losses incurred by appearing in court, the agreement may be void as contrary to social order. In that situation, it may be difficult to legally demand performance of the promise, such as delivery of a car or payment of money.

Case 24

Q. If a resolution to distribute a clan association’s property is void, can I immediately claim my share?

As a rule, a clan association’s property is distributed in accordance with its bylaws or a resolution of its general meeting. Case law holds that even if an existing distribution resolution is void, a member cannot immediately claim a distribution amount of their own choosing without a new resolution.

Case 12

Q. Is it always an abuse of rights for the State to invoke the expiration of the statute of limitations?

The fact that the State invokes the statute of limitations does not, by itself, constitute an abuse of rights. It is necessary to consider whether special circumstances exist, such as the State having made it difficult to exercise the right before the limitation period expired or having led the claimant to believe that it would not invoke the limitation period.

Case 25

Relevant laws

Civil Act, Article 2(2) (민법 제2조 제2항)
Civil Act, Article 103 (민법 제103조)
Civil Act, Article 104 (민법 제104조)
Civil Act, Article 109(1) (민법 제109조 제1항)
Civil Act, Article 110(1) and (2) (민법 제110조 제1항·제2항)
Civil Act, Article 186 (민법 제186조)
Civil Act, Article 619 (민법 제619조)
Civil Act, Article 837(1) and (5) (민법 제837조 제1항·제5항)
Criminal Act, Article 228(1) (형법 제228조 제1항)
Criminal Act, Article 355(1) (형법 제355조 제1항)
Civil Procedure Act, Article 1 (민사소송법 제1조)
Civil Procedure Act, Article 41(1) (민사소송법 제41조 제1호)
Civil Procedure Act, Article 52 (민사소송법 제52조)
Civil Execution Act, Article 48(1) (민사집행법 제48조 제1항)
Farmland Act, Article 6(1) and (2) (농지법 제6조 제1항·제2항)

Watch out for

To claim a mistake concerning the motive for entering into a contract, you should specifically determine whether the motive was disclosed to the other party, whether it can be regarded as part of the contract, and whether the mistake was material.
Whether advertising or oral explanations form part of a contract may depend on the wording of the contract and the circumstances in which it was made.
When considering the distribution of a clan association’s property or the appointment of its representative, you should also check membership eligibility, the bylaws, the procedures for calling and holding a general meeting and passing resolutions, and the substance of the resolution.
Whether the exercise of a right constitutes an abuse of rights, or whether a statute-of-limitations defense is effective, depends on the specific circumstances. Do not reach a conclusion based solely on the harm to the other party or the difficulty of exercising the right.

No Honor Among Thieves: Why Illegal Pacts Fail in Korean Courts

Source cases

This guide was compiled by AI from the following Korea Legal Aid Corporation consultation cases (in Korean).

This guide is general legal information about Korean law, not legal advice for your situation. For a specific case, consult a lawyer or the Korea Legal Aid Corporation (call 132 in Korea).