The landlord is the owner of land and a building in a local metropolitan city. The landlord was forced to make significant concessions to the terms of the lease when negotiating with a hypermarket due to the local government's administrative guidance to attract a hypermarket, complaints from local residents, and political intervention.

As a result, the landlord had to accept a number of unfavorable conditions when signing the lease with the tenant, a hypermarket. In particular, it was decided to calculate the amount of rent according to the bands of sales, but the amount of rent set for each band was too small, and as a result, the amount of rent calculated under the terms of the lease was only one-third of the rent that the appraiser found to be reasonable, taking into account rents in the neighborhood.

In response, the landlord sought various options, including a claim for an increase in rent based on Article 628 of the Civil Code. However, the landlord believed that the hypermarket's act of presenting unfavorable conditions to the landlord during lease negotiations may constitute an abuse of dominant position (disadvantageous offer) prohibited by the Fair Trade Act and filed a dispute settlement application with the Korea Fair Trade Mediation Agency.

The Korea Fair Trade Mediation Agency summoned the landlord and the hypermarket several times and conducted a face-to-face investigation. After reviewing the arguments and positions of each party, the agency made a mediation decision to increase the annual rent to 2.5 times the amount of the 2022 rent by comprehensively considering the following circumstances.

(1) There is room to recognize the status of the hypermarket in that the lease agreement between the landlord and the hypermarket is for 10 years, so the two parties are in a long-term business relationship, the rent and management fees paid by the tenant account for the majority of the landlord's sales, and there are only a few alternative business lines that can conclude a lease agreement with the landlord to attract a hypermarket.

(2) However, the landlord and the tenant negotiated the terms of the lease for a considerable period of time, and the rent is highly variable as it can only be estimated at the time of signing the lease, and it is difficult to determine whether the terms of the lease are unilaterally unfavorable to the landlord at this point in time.

(3) Despite these circumstances, the parties want to resolve the dispute amicably through reasonable adjustments, so the agency will comprehensively review the parties' proposals and propose an acceptable solution to resolve the dispute.

The landlord and the hypermarket accepted the above mediation decision and signed an amendment agreement to increase the rent, thereby ending the dispute between the landlord and the hypermarket.

Recently, it has become very difficult to negotiate the major terms of the contract at an appropriate level due to market uncertainty caused by fluctuations in raw materials, interest rate hikes, and changes in the distribution environment. Even if the terms of a contract were reasonable at the time of signing, they often become excessively unfavorable to one party or the other afterward.

Even if you want to redress the unfairness of these contract terms, there are limitations to reconciling your interests through civil litigation procedures, as civil courts do not recognize changes in circumstances as a reason to change a contract in principle and tend to strictly judge whether the requirements are met.

In light of all these circumstances, we chose the dispute settlement procedure of the Korea Fair Trade Mediation Agency, and in the mediation process, we emphasized the unfairness of the contract terms, but presented a reasonable mediation plan that was acceptable to each side, so that the Korea Fair Trade Mediation Agency made a mediation decision that reflected the purpose, and convinced both parties to accept it, which is significant in that it led to a reasonable level of change in the contract by compromising the conflicting positions of the parties relatively quickly.