If Daniel's breach of the exclusivity agreement was intentional, the damages claimed by Adore could be a non-dischargeable debt that cannot be discharged in a personal reorganization or bankruptcy, said Han Byul Jang Soo, a lawyer at the firm. In this case, the creditor can garnish a portion of the debtor's salary, excluding living expenses, for life, he said.

Jang said that the legal issue in penalty and damages claims is whether willfulness can be proven, and added that the penalty calculation method (average sales in the last two years multiplied by the remaining contract period) allows for an industry estimate of about 100 billion won, but there is room for the court to reduce excessive penalties. We also analyzed that the grounds for breach of the exclusive contract (overlapping contracts, independent activities, defamation of character, etc.) and the first trial court's decision (no liability for breach of contract) will have a significant impact on the issues in future litigation.