Japan Legal Update - Volume 25 | May 2017

by Jones Day

Jones Day

Bill to Partially Amend the Civil Code was Passed by the House of Representatives

On April 14, 2017, the House of Representatives passed a bill to partially amend the Civil Code ("Bill"). The Bill is under deliberation in the House of Councilors and is expected to be enacted in the current session of the Diet.

The Bill includes the following important items that will revise the provisions of the current Civil Code:

  • Statute of Limitations: Under the current Civil Code, (i) a limitation period for a claim generally lasts until 10 years after the time when the claim may first be exercised. While this general prescription period will remain, the Bill (ii) introduces a new limitation period that will last until five years after the time when creditors become aware that a claim is exercisable, and a claim will be extinguished upon expiry of the period of (i) or (ii), whichever expires earlier. In addition, the provisions of the short-term statute of limitations for occupation-related claims (Articles 170 through 174 of the current Civil Code) and the statute of limitations for commercial affairs (Article 522 of the Commercial Code) will cease to exist and the varying limitations periods will be unified.
  • Statutory Interest Rate: The Bill will replace the current fixed interest rate of five percent per annum with a variable interest rate. The statutory interest rate at the time of enforcement of the Bill will be three percent per annum and the rate will be reviewed every three years based on an average interest rate of short-term loans.
  • Personal Guarantees: Under the Bill, a guarantee by an individual guarantor for loan obligations incurred for a business (except for personal guarantees by business owners) will become invalid unless such individual indicates an intention to perform the guarantee obligation by means of a notarial deed during the one month period prior to the execution. In addition, when a principal obligor entrusts such guarantee to an individual, the principal obligor must provide such individual with certain information, including the status of the property and the income and expenditures. If the principal obligor fails to provide such information, the individual guarantor may generally rescind the guarantee.
  • Assignments: In order to promote the raising of funds by the assignment of claims, as a general rule, an assignment of claims that is contrary to a "no assignment" provision will be valid under the Bill. Except in certain cases, an obligor may refuse to perform its obligation to an assignee of claims who has acquired the claims with the knowledge of the "no assignment" provision, or in ignorance of such provision due to gross negligence, and assert any grounds to extinguish its obligations (e.g., repayment) that have accrued vis-a-vis the assignor as a defense against such assignee.
  • Contracts of Adhesion: The Bill newly introduces provisions regarding contracts of adhesion (teikei yakkan). The Bill includes various provisions such as providing requirements for contracts of adhesion to be deemed as agreed between the parties, restricting terms that unilaterally impair the interest of consumers, adding an obligation to provide the terms of the contracts of adhesion to consumers, and providing that certain requirements must be met to amend a contract of adhesion without the consent of a consumer.
  • Cancellation: Under the current Civil Code, the cancellation of a contract due to nonperformance of the contract requires a fault by an obligor. However, under the Bill, an obligee will have the right to cancel its contract without a fault by the obligor. These new cancellation rules are a means of releasing an obligee from the binding effect of contracts in cases where an obligor does not perform its obligations, rather than a means of pursuing liability of such obligor.

In addition to the above, the Bill covers a broad range of other items, such as amendments to codify court precedent as well as other revisions to the current Civil Code. The Bill will come into force by 2020, if it is enacted in the current session of the Diet. To comply with this Bill, companies will need to review their business practices in various areas, including their credit management and contract practices.

Life Science

Enactment of Clinical Research Act

Due to the uncovering of clinical research misconduct in the past few years, the Clinical Research Act was enacted on April 7, 2017, and was promulgated on April 14, 2017. Under this act, those who conduct Specified Clinical Research ("SCR") must (i) comply with the clinical research guidelines that will be made by the Ministry of Health, Labour and Welfare, which will regulate, among others, monitoring activities and the auditing and management of conflicts of interest, and (ii) obtain informed consent, protect personal data, keep records, hold hearings with certified clinical research ethics committees relating to clinical research plans, and report adverse events. SCR is defined as clinical research sponsored by manufacturers of drugs, medical devices, or human cell therapy and gene therapy products ("Drugs, etc.") and clinical research related to the Drugs, etc. of those companies, or clinical research to study the Drugs, etc. that have not been approved under the Pharmaceutical and Medical Device Act ("PMD Act") or off-label uses of the Drugs, etc. However, any clinical trial regulated under the PMD Act is excluded from the definition of SCR. In addition, under the Clinical Research Act, manufacturers of Drugs, etc. shall be obligated to execute contracts to sponsor SCR and to disclose sponsorship information. Future ministerial ordinances will specify what sponsorship information must be disclosed, and these future developments should be closely monitored. This act will come into force within one year from the date of promulgation.


Amendment to Child and Family Care Leave Act, Etc.

The amendment to the Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave ("Act"), etc. was enacted on March 31, 2017. Starting in October 2017, this amendment will allow for a worker to extend the period of child care leave until his or her child reaches two (2) years of age, if the child is unable to enter into a nursery school. Until the amendment takes effect in October, the Act allows for a worker to extend the leave period until a child reaches one and a half (1.5) years of age.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jones Day | Attorney Advertising

Written by:

Jones Day

Jones Day on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.