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| TITLE | Daejeon High Court Decision 2024Na10738, dated December 11, 2024: Appeal [full Text] |
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| Summary | |
| [Main Issues and Holdings] Party A, who is a doctor, operated an orthopedic hospital on the 4th floor of a building he owned, but when he found it difficult to operate the hospital due to health issues, Party A executed a transfer and assignment agreement with Party B, who was also a doctor, whereby all rights and obligations regarding the above hospital’s business would be comprehensively transferred/assigned to Party B. At the same time, a lease agreement was also executed with respect to the 4th floor of the building. A few years later, Party A opened an orthopedic clinic on the 2nd floor of the same building where Party B’s hospital was located. In response, Party B filed suit against Party A seeking a prohibition on competition and damages. In this case, it appears that the above transfer and assignment agreement is subject to Article 41 of the Commercial Act by analogy or it appears that there was an implicit agreement prohibiting competition, so Party A is prohibited from operating, or allowing a third party to operate, an orthopedic clinic in the same city for a period of 10 years starting from the date of the transfer and assignment, and so has an obligation to close any orthopedics clinic business that is opened in violation of such an agreement. In addition, with respect to damages for violating the obligation prohibiting competition, Party A has an obligation to pay the amount equivalent to the reduction in sales that resulted for Party B’s hospital in addition to the amount equivalent to the premium at the time of the termination of the lease agreement. | |
