Separate work already completed from the margin on unfinished work
An owner may consider stopping a building or renovation project after a change in funding or family circumstances.
A large unfinished portion does not mean that all unused advances must be returned.
A contractor claiming the whole remaining price or a fixed profit percentage does not establish the settlement either.
This calculator separates retained-work remuneration, the unfinished contract price, avoided net costs, separate losses, benefit deductions and prior payments so that both parties can compare the same assumptions.
Korea-based 2026 legal context
The model concerns owner cancellation before completion under Korean Civil Act Article 673.
Amounts are whole Korean won, not another currency converted into KRW.
It does not apply another country’s construction law, determine legal entitlement or predict a court award.
Start with the signed contract, progress valuation, remaining cost budget and receipt ledger.
What the review shows
- The unfinished price and its margin assumption, separate from retained-work remuneration
- Three owner-exposure scenarios corresponding to minimum, base and maximum avoided costs
- Additional-payment or refund-review balances after deducting allocated prior payments once
- Unknown, assumed and evidence-checked amounts, document dates and the next records to obtain
Article 673 and the limits of this cancellation model
Article 673 connects the owner’s right to cancel before completion with compensation for the contractor’s loss.
Cancellation for the owner’s own reasons must be distinguished from cancellation alleging contractor breach.
The calculator cannot interpret the notice, establish whether completion occurred, or decide the effect of a special termination or settlement clause.
Unknown cancellation grounds, contractor breach, mutual cancellation and already completed work withhold monetary scenarios.
Assumption: useful completed work is retained
The model assumes the owner retains or accepts the completed part and settles remuneration for it.
Supreme Court case 92Da30160 distinguishes useful retained work and the social or economic loss caused by restoration from work that does not benefit the owner.
That case concerned breach-based cancellation; it is used here to explain the retained-work boundary, not as a direct award of Article 673 lost profit.
Cases requiring separate review
Useless work, demolition and restoration, retroactive cancellation of the whole contract, contractor breach, mutual cancellation and post-completion payment disputes need a different contractual and legal review.
Applying this retained-work and remaining-margin split mechanically could reverse the apparent payment or refund direction.
Contract price, retained-work remuneration and payments are different inputs
C: total contract price
Include agreed variations on one consistent work scope.
Do not include additional work in the contract price while valuing completed work against the original scope only.
Use a consistent VAT-inclusive or VAT-exclusive basis for every amount.
The tool does not add VAT, determine tax treatment or calculate a tax refund.
K: retained-work remuneration
Remuneration for completed work is not necessarily the contractor’s expenditure on that work.
The contractual value can already include its profit.
Supreme Court case 2012Da39769/39776 explains progress settlement by reference to the agreed total price and progress ratio absent special circumstances, while allowing specific progress-remuneration terms to matter.
Photographs, elapsed time or an informal quote cannot automatically determine the legal progress value.
Check the agreed measurement method, progress certificate or appraisal.
P: payments allocated to this settlement
Include advances and interim payments actually allocated to this contract settlement.
Separate payments for another contract, interest and costs first.
Civil Act Article 479 concerns allocation to costs, interest and principal; resolve any mixed-payment allocation before entering P.
The unfinished price is C−K, not the unpaid balance C−P.
Identify net savings, separate losses and benefit deductions
Saved net cost S means spending avoided because cancellation ends the unfinished work.
Examine unplaced material orders, cancellable subcontract work and labor no longer required using the original contractor’s cost budget and cancellation terms.
Preparation already paid and liabilities still payable after cancellation are not avoided spending.
A replacement contractor’s quote is not the original contractor’s saved cost.
Minimum, base and maximum S
Enter three assumptions reflecting uncertainty in the same cost list.
They must follow minimum ≤ base ≤ maximum.
Larger savings reduce the unfinished-work margin and owner exposure.
Enter equal amounts for a single-assumption comparison.
If any saved cost exceeds the unfinished price, the remaining work is loss-making and the tool withholds results for individual cost and legal review.
A: separate non-overlapping loss
This is not a place to add costs already included in K or the unfinished-price-minus-savings calculation.
Preparation expenditure already paid must be excluded from saved cost; adding that same preparation again as A would count it twice.
Likewise, do not re-add an unavoidable cancellation liability already reflected in net savings.
Enter only separately reviewed loss items, checking causation, proof, amount and legal recognition.
B: separate benefit deduction
Supreme Court case 2000Da37296/37302 discusses deductions involving income earned by redeployed labor, income negligently forgone, and value obtainable by reusing or disposing of prepared materials.
B is the separately reviewed benefit corresponding to the loss in this scenario.
Do not deduct labor savings again as redeployed income or assume the contractor sells materials that are instead delivered to the owner.
Entitlement, causation and overlap require evidence review.
The settlement equations
R = C − K
M = R − S
D = max(0, M + A − B)
T = K + D
N = T − P
R is the unfinished contract price; M is the margin assumption on that portion.
D is the cancellation-damage scenario after separate loss and benefit deductions.
T is the settlement total before prior payments, and N deducts P once.
The split reflects the unfinished-price and completion-cost reasoning examined in 2012Da39769/39776 under the stated assumptions.
It is not a universal legal formula for every construction cancellation.
What the zero floor does
When B exceeds M+A, only cancellation damage D is floored at zero.
Excess benefits do not automatically reduce retained-work remuneration K.
Any independent repayment claim or counterclaim needs separate review.
If K=C, there is no unfinished price and this remaining-work margin model does not produce scenarios.
No statutory profit rate, standard penalty percentage or fault discount is invented.
Step-by-step use and evidence status
- Select the cancellation basis and review cutoff.
Check the contract and notice for owner cancellation before completion.
The cutoff is a 2026 evidence-review date, not an automatically determined effective cancellation date.
- Reconcile contract, completed-work and payment scope.
Align variations, VAT, retained work and receipt allocation.
A completed-work value above the contract price must be resolved before calculation.
- Prepare three remaining-cost assumptions.
Use one cost list and keep minimum, base and maximum in order.
Do not substitute zero merely because the amount is unknown.
- Check separate loss and benefits for duplication.
Record where preparation, unavoidable cancellation costs, redeployed income and material value are reflected.
Zero is valid when the absence of an amount is actually assumed or checked.
- Choose status and record document dates.
Unknown status withholds results; assumed amounts produce an arithmetic scenario.
Evidence-checked amounts require a document date and source note.
Documents cannot postdate the review cutoff.
- Confirm modeling assumptions and save the review.
The checkboxes confirm assumptions, not legal entitlement.
TXT and print outputs retain amounts, statuses, document dates, source notes, pending reasons and results for a consistent discussion.
Worked example: payment and refund directions under KRW 150,000,000 already paid
Assume C is KRW 300,000,000, K is KRW 120,000,000 and P is KRW 150,000,000.
R is therefore KRW 180,000,000.
Minimum, base and maximum saved costs are KRW 140,000,000, KRW 150,000,000 and KRW 160,000,000.
A is KRW 5,000,000 and B is KRW 3,000,000.
All values are fictional assumptions, not construction-price averages or judicial awards.
Fictional saved-cost scenarios comparing unfinished margin, cancellation damage, total and net settlement; all amounts in KRW| Owner exposure | Saved cost S | Margin M | Damage D | Gross total T | Net balance N |
|---|
| Lower exposure | 160,000,000 | 20,000,000 | 22,000,000 | 142,000,000 | −8,000,000 |
| Base assumption | 150,000,000 | 30,000,000 | 32,000,000 | 152,000,000 | 2,000,000 |
| Upper exposure | 140,000,000 | 40,000,000 | 42,000,000 | 162,000,000 | 12,000,000 |
The lower exposure gives a KRW 8,000,000 refund-review balance.
The base gives a KRW 2,000,000 additional-payment assumption, and the upper exposure gives KRW 12,000,000 additional payment.
The net settlement spread is KRW 20,000,000.
K−P alone is −KRW 30,000,000, but that subtotal omits cancellation damage and is not a final refund amount.
The three rows are alternatives for one contract and must not be added together.
Read signs and ranges without turning assumptions into legal conclusions
Positive: additional-payment assumption
The assumed total of retained-work remuneration and cancellation damage exceeds allocated prior payments.
This does not establish an immediate payment duty or validate an invoice.
Check progress-remuneration terms, cancellable costs and overlap in separate losses before deciding on a payment.
Negative: refund review
Prior payments exceed the entered settlement total.
The result does not promise a refund date or successful repayment claim.
Reconcile actual advance settlement, material ownership, interest and cost allocation, and any separate agreement.
A calculated zero balance means there is no difference under the supplied assumptions.
It is different from a withheld result with missing evidence.
Range endpoints arise only from your saved-cost assumptions; they are not bounds on every possible legal outcome.
The base is neither the most likely judgment nor a recommended settlement merely because it lies between the endpoints.
Records to review with family, the contractor and an adviser
- Owner considering cancellation for funding reasons: Do not plan a refund using completed work alone.
Separate the remaining cost budget and margin before comparing cash assumptions.
The example range is not a confirmed funding requirement.
- Contractor preparing a settlement statement: Separate profit embedded in K from margin on unfinished work.
Show where preparation and cancellation costs appear, with document dates and source pages, to reduce duplicate claims.
- Family member reconciling receipts: Check actual allocation to this settlement rather than relying on labels such as deposit or progress payment.
Explain differences between bank transfers and settlement agreements before using P.
- Preparing legal consultation: Bring the notice, contract and variations, progress appraisal, remaining budget, income from other work and material-disposal records with the review.
Identify disputed scope and useful retained work before negotiating a number.
For payment delay and lien questions, see the construction payment and lien calculator.
Contractual completion-delay damages are covered by the construction delay liquidated damages calculator and are not automatically combined with this settlement.
Distinguish invalid data from legal questions
When the model withholds calculation
Completed remuneration above the contract price, reversed cost assumptions and saved costs above the unfinished price must be reconciled.
The tool does not silently trim or reorder these inputs.
Fractional won, negative amounts, infinity, amounts above the input limit and invalid calendar dates are errors.
The KRW 1 trillion amount limit is an input and precision limit, not a legal damages cap.
Prior payments above the contract price are preserved with a warning rather than cut down, so overpayment remains visible.
Contractor breach, defects, delay damages, penalties, late interest, litigation costs, enforcement, limitation periods and taxes are outside the automatic calculation.
Review contract clauses and disputed deductions or setoffs with an appropriate professional.
Even when every status is evidence checked, the court may determine a different loss scope from the evidence and pleadings.
Frequently asked questions
Can the owner cancel and pay only for work completed?
Owner cancellation before completion involves compensation for loss.
Separate the completed-work balance from unfinished-work margin and cancellation damage.
Do not assume progress payment alone closes the contract.
Is all of the remaining contract price lost profit?
No.
Examine costs avoided and applicable benefit deductions.
This tool subtracts saved net costs from the unfinished price and does not invent a statutory profit percentage.
Can I use actual spending as the completed-work value?
Spending and contractual remuneration can differ.
Review progress terms, certificates and appraisal evidence.
Do not add profit already contained in that remuneration again.
Can I add every preparation and cancellation cost as A?
Do not add preparation again when it has already been excluded from savings, or re-add an unavoidable cancellation liability already reflected in net savings.
Check separate recognition and duplication line by line.
How are other-project income and material proceeds treated?
Review corresponding income and material value using the benefit-deduction reasoning in 2000Da37296/37302.
Avoid amounts already counted in cost savings and materials delivered to the owner.
Does a negative balance mean I receive an immediate refund?
It is a refund-review balance under your assumptions.
Reconcile advances, payment allocation, contract terms and counterclaims before settlement or legal review.
There is no automatic refund.
Should I enter zero for an unknown item?
A blank or unknown item withholds results.
Distinguish a checked zero from missing information.
You may choose an assumed amount for comparison, but the result remains an assumption-based calculation.
Can this handle contractor breach or mutual cancellation?
This limited model concerns owner cancellation before completion.
Breach, mutual cancellation, completed contracts, useless work and loss-making remaining work require separate contractual and legal review.
Official sources, rule date and next action
The National Law Information OPEN API returned the current Civil Act, Law ID 001706, MST 284415, Act No 21454, promulgated and effective March 17, 2026.
This is the effective date of the retrieved consolidated statute, not a claim that Article 673 was first enacted that day.
The articles and cases were checked on October 18, 2026 (2026-10-18).
Recheck contract terms, cancellation effect, usefulness of retained work, recognition of losses and any later legal changes.
- Civil Act Article 673: owner cancellation before completion and compensation
- Article 665, remuneration timing; Article 479, allocation to costs, interest and principal
- Supreme Court 2012Da39769/39776, May 24, 2013: progress remuneration and unfinished-work margin
- Supreme Court 2000Da37296/37302, May 10, 2002: loss scope, redeployed income and material value
- Supreme Court 92Da30160, December 22, 1992: useful retained work and restoration boundaries
Bring the review and the actual records together
Document which costs are avoided and which work remains before negotiating only a final number.
Editing an input updates the current review, while TXT and print outputs retain assumptions and withheld items.
Keep original records with the export and compare the same scope with the contractor, supervising professional or a Korean construction-law adviser.
Return to the settlement inputs and evidence checks