Used-Car Fraud and Unjust Enrichment in South Korea

You list a car for sale, and days later both the car and the money are gone. A scammer impersonates both the seller and a used-car dealer, persuades the seller to forward the funds just received to a third party, and the loss becomes hard to undo. That is exactly the structure of this case.

The car was delivered to the dealer and the price reached the seller’s account, yet the seller wired that money on to an account the scammer designated. Could the seller still recover the car, or must the money be returned first? The trial court and the appellate court disagreed, and the Supreme Court resolved the split. Two questions decide the outcome: whether a sales contract was ever formed, and whether the price actually vested in the seller. The starting point is a contract-formation rule the Supreme Court of Korea set in 2001.

1. What did the Supreme Court actually decide?

The Court reversed the appellate ruling and found that the seller did owe restitution. Unjust enrichment attaches to the person to whom the benefit actually vests, and the lower court had misapplied that principle.

The governing rule is this: unjust enrichment under Korean law rests on the ideas of fairness and justice and imposes a duty of return on the person to whom the benefit has actually vested (Supreme Court 2010Da37325, 37332; 2009Da98706; 2016Da242273; 2017Da213838). The duty of restoration that this serves is grounded in the unjust-enrichment provisions beginning at Article 741 of the Korean Civil Act. Applying that rule, the Court reasoned in four steps:

1. The seller’s delivery of the car and the dealer’s payment of money are an inseparable series of acts incident to the sale. Once the car was delivered to and actually vested in the dealer, there is no reason to treat the price paid to the seller differently.
2. Even if the parties did not reach agreement on the price so that a contract cannot be said to have formed, the restitution duties remain with the parties to the transaction. The price therefore cannot be treated as having passed straight to the scammer without ever actually vesting in the seller.
3. Because the seller had already delivered the car, returning the price at the scammer’s request risked losing both the car and the money. Such a return is unusual and abnormal by ordinary trade standards; if the seller knew or could have known of that risk yet returned the money anyway, that is a circumstance arising after the price had vested in the seller and a separate act of disposal.
4. The dealer took the ordinary, general confirmation steps of a buyer, while the seller, hoping for a higher price, created a false appearance by posing as a delivery driver and left the dealer with no choice but to rely on it. In light of this course of performance, imposing the restitution duty on the seller also accords with the ideals of fairness and justice.

On that basis the Court held that the appellate court — which rejected the simultaneous-performance defense on the premise that no monetary benefit had actually vested in the seller — had misapplied the law on the existence of unjust enrichment and the actual vesting of benefit. It reversed the judgment and remanded the case to the Daegu District Court. The case will be retried, but the ruling sets up a structure in which the seller may recover the car only upon simultaneously returning the KRW 38.5 million — the same direction as the trial court’s original simultaneous-performance result.

2. How did a used-car sale become a fraud?

A scammer (an unidentified person) impersonated both the seller (X) and a used-car dealer (Y). X handed the car and the documents to Y, Y paid KRW 38.5 million into X’s account, and the dispute began when X re-sent that money to an account the scammer designated.

The facts found in the judgments are as follows (the plaintiff is anonymized as X and the defendant as Y):

• X was a co-owner (99% share) of a 2021 G80 sedan and, around November 2023, listed it on a secondhand marketplace at an asking price of KRW 47 million.
• On November 13, 2023, the scammer, impersonating Y, told X he would buy the car and asked X to bring the transfer documents and the car to Y’s business premises.
• The same day, the scammer offered to sell the car to Y, and Y agreed to buy it for KRW 38.5 million.
• The scammer asked X to “act like a delivery driver,” saying an owner who appeared in person could not command the desired price. X complied, handing Y the vehicle registration certificate, a certificate of personal signature, and the car, and then waited nearby.
• Y received the documents and the car and paid KRW 38.5 million into the X-name account the scammer had specified.
• The scammer told X to re-send the KRW 38.5 million “for tax reasons,” promising to send KRW 47 million in return. X wired the entire KRW 38.5 million to an account in the name of B that the scammer designated.
• X never received the promised KRW 47 million and asked Y to return the car, but Y refused.

X and Y never negotiated directly; each communicated only with the scammer. The issues were whether Y had to deliver the car to X and, if so, whether X had to return the KRW 38.5 million at the same time (simultaneous performance). The three courts split as follows.

3. Why was there no valid sales contract?

It was not formed. X intended to sell at KRW 47 million while Y intended to buy at KRW 38.5 million, so there was no meeting of minds on the price, and the two never dealt with each other directly.

The contract-formation rule the courts applied is this: for a contract to form, the parties must reach a meeting of minds; this need not cover every term, but on the essential or material terms there must be a concrete agreement, or at least an agreement on standards and methods by which those terms can later be specified (Supreme Court 2000Da51650, March 23, 2001). A contract of sale forms when the parties agree that one will transfer property rights and the other will pay the price, so, absent special circumstances, the parties, the subject matter, and the price are its essential terms (Supreme Court 94Da34432, April 26, 1996).

Here there was no meeting of minds on the price, an essential term. X and Y had never discussed the sale directly; each dealt only with the scammer, who impersonated both as the other’s counterparty without any authority to represent either. A sales contract between X and Y therefore cannot be said to have formed, and because no contract was formed, Y in principle had a duty to deliver the car to its owner, X.

4. If there is no contract, who returns what?

When no contract is formed, each side must restore what it received under the law of unjust enrichment (Article 741 of the Korean Civil Act). Here Y must return the car and X must return the KRW 38.5 million, and the two duties are in simultaneous performance.

Where a bilateral contract is void or never formed but the parties have exchanged performance on the assumption that it was, compelling only one side to restore first would offend fairness and good faith; the duties are therefore in a relationship of simultaneous performance (Supreme Court 2019Da208533, 208540). Y’s duty to deliver the car and X’s duty to return the price are thus interlocked.

The difficulty was that X had already sent the money on to the account the scammer designated. The appellate court and the Supreme Court divided on the question of whether restitution could be imposed on an X who no longer held the funds.

5. Is the 2000Da51650 rule still good law?

Yes. The rule that a contract forms only on a concrete meeting of minds as to essential and material terms continues to be cited — in this car case and in a cryptocurrency dispute alike.

Supreme Court 2000Da51650 (March 23, 2001) itself concerned whether an assignment-security agreement and a claim-assignment agreement had formed. Because key portions of the documents — the contract date, the scope of secured obligations, the security ceiling — were left blank and there was no concrete, definite agreement on the central question of refinancing, the Court found the agreements had not formed. From that case comes the standard that, where there is no agreement on a matter the parties indicated had to be agreed, the contract is not formed absent special circumstances.

That rule has since applied across transaction types. Seoul High Court 2023Na2042578 (March 27, 2024), a damages case, cited 2000Da51650 together with the sale-contract rule of 94Da34432 and held that no sales contract had formed where the seller intended to sell cryptocurrency while the buyer intended to buy Philippine pesos, so that their understanding of the subject matter differed entirely. That case, too, involved an unidentified person who orchestrated the transaction.

In short, where there is no meeting of minds on an essential term — whether the price or the subject matter — a contract does not form even if a transaction outwardly proceeds, and the dispute naturally turns to unjust enrichment and restitution. The 2025Da219380 case begins from exactly that point.

6. How can you avoid used-car fraud in Korea?

This case follows a classic pattern in which the scammer impersonates both the seller and the buyer. The most dangerous moment is when you skip confirming your actual counterparty and then comply with a request to re-send funds you have received.

Drawing on the facts in the judgments, here is what to check when buying or selling a used car:

• Confirm the counterparty in person. Make sure you have communicated directly (in person or through a verified contact) with the actual buyer or seller. When a scammer impersonates both sides, the real parties never speak to each other.
• Match the price and the subject matter. Check that your understanding of the price and the item is the same as the other side’s. If the essential terms diverge, no contract forms at all (Supreme Court 2000Da51650).
• Beware any “hide your identity” request. A request to pose as a delivery driver — on the theory that an owner appearing in person cannot get the price — is a warning sign.
• Refuse “send it back” demands. A demand to re-send received funds to a third party, citing taxes or a refund, is a classic fraud technique. Once you re-send, a restitution duty may remain with you (Supreme Court 2025Da219380).
• Check account names. Verify that the name on the deposit account and on any account you are asked to send to matches the counterparty.
• Stop and consult at any sign of doubt. If something looks off, halt the deal and consult the police and a lawyer.

Many foreign residents and investors connected to the Incheon Free Economic Zone — Songdo International Business District, Cheongna International City, and Yeongjong International City — buy and sell vehicles in South Korea, and the same fraud pattern applies to them. Because these cases combine civil unjust enrichment and simultaneous performance with criminal fraud, an early, Korean-law response — built on a clear timeline of the transaction and the transfers — makes a real difference to the outcome.

Frequently asked questions

If you are dealing with used-car fraud, unjust enrichment, or a simultaneous-performance defense in South Korea, please contact Atlas Legal. We review the transaction timeline and transfer records to map out a coordinated civil and criminal response. (Phone +82-32-864-8300 · Email info@atlaw.kr)

About the Author

Soyoung Park | Representative Attorney

Family Law, Inheritance, Construction & Real Estate Disputes

Judicial Research and Training Institute, 33rd Class

Korea University, Department of Law

Atlas Legal | Incheon Songdo, South Korea

Visit Atlas Legal Homepage →