Statement on the Enactment of the Act to Partially Revise the Civil Code and the Act Concerning the Arrangement of Related Acts
The Act to Partially Revise the Civil Code (Cabinet Bill No.63) and the Act Concerning the Arrangement of Related Acts (Cabinet Bill No.64) (collectively, the “Revised Acts”) were both enacted on May 26, 2017.
The Civil Code (law of claims) is an act which regulates contracts that are closely associated with the public’s daily lives and economic activities, and it has been over 120 years since the Civil Code (law of claims) was established. Since significant changes have occurred in both the economy and society thereafter, the Civil Code has been amended to adapt to those changes in view of improving the understandability for ordinary members of the public.
The Revised Acts have achieved several noteworthy amendments, including the fact that established judicial precedents have now been written into statutory form, the addition of clarifications on controversial interpretations, the improvements in the long-standing concerns about the protection of individual guarantors, and the newly established regulations on adhesive terms and conditions. Nevertheless, concerns still remain about the insufficient protections for contracting parties, such as the permission for a spouse of an individual business operator who is actually engaged in the business to conclude a guarantee contract deeming the spouse as an operator without the need for a notary public to confirm such operator’s willingness, or the limited range of adhesive terms and conditions that should be subject to the new regulations. It is further hoped that the newly introduced provisions in the Revised Acts will be interpreted in a way whereby the protection of guarantors is expanded, and the regulations on adhesive terms and conditions are properly implemented. In order to achieve this point, the Revised Acts will need to be continuously reviewed, and further revisions should be proposed if necessary.
Additionally, with regard to the proposed amendments which gained a certain understanding of necessity but which were not agreed upon during the sessions on the Revised Acts, further discussions should be expected to take place with the aim of realizing free and fair trade throughout society. In particular, based on further elaboration and sophistication of the judicial-created doctrines concerning limitation of liability for guarantors, protection from price gouging, protection from mistaken motives induced by the other party, the obligation to supply information, and accountability during the course of contract negotiations, etc., it is hoped that such judicial-created doctrines should be written into statutory form.
As the amendments number more than 200 and cover an extremely broad range, they will clearly have a significant influence on peoples’ daily lives and business activities, such as in relation to the amendments to the statute of limitations, the statutory interest rate, the above-mentioned amendment to the individual guarantor system, and the newly regulated adhesive terms and conditions. Considering the profound influence these changes will have on the public, it is vital to ensure that they are made well known to the public before they are due to come into effect no later than three years from now. The JFBA therefore calls upon the Ministry of Justice and other concerned organs to devote their best efforts to achieving the smooth enforcement thereof. In line with this, the JFBA will also exert its best efforts, as a legal profession close to the public, to increase the awareness of the amendments stipulated in the Revised Acts.
May 26, 2017
Japan Federation of Bar Associations