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Consumer Contract Act 2000 - Act No. 61 of 2000

# This English translation of the Consumer Contract Act has been translated (through the revisions of Act No. 129 of 2001 (Effecrtive April 1, 2002)) in compliance with the Standard Bilingual Dictionary (March 2006 edition). This is an unofficial translation. Only the original Japanese texts of laws and regulations have legal effect, and the translations are to be used solely as reference material to aid in the understanding of Japanese laws and regulations. The Government of Japan shall not be responsible for the accuracy, reliability or currency of the legislative material provided in this Website, or for any consequence resulting from use of the information in this Website. For all purposes of interpreting and applying law to any legal issue or dispute, users should consult the original Japanese texts published in the Official Gazette.

The Consumer Contract Act

Chapter 1 General Provisions

Article 1 (Purpose)

The purpose of this Act is to protect the interests of consumers, and thereby to contribute to the stabilization and improvement of the general welfare of the life of the citizens and to the sound development of the national economy by permitting, in consideration of the discrepancy in quality and quantity of information and in the negotiating power between consumers and business operators, the rescission of manifestation of intentions to offer or accept contracts made by consumers when they are mistaken or distressed by certain acts of business operators, and by invalidating, in part or in whole, clauses that exempt the business operators from their liability for damages or otherwise unfairly harm the interests of consumers.

Article 2 (Definitions)

(1) The term "consumer" as used in this Act shall mean an individual (excluding, however, any individual who becomes a party to a contract in the course of, or for the purpose of, his/her business).

(2) The term "businesses operator" as used in this Act shall mean a juridical person, and other type of association, and an individual who becomes a party to a contract in the course of, or for the purpose of, his/her business.

(3) The term "consumer contract" as used in this Act shall mean a contract concluded between a consumer, on the one hand, and a business operator, on the other.

Article 3 (Efforts of business operators and consumers)

(1) Business operators drafting clauses of a consumer contract shall endeavor to ensure that the rights and duties of consumers and such other things set forth in the consumer contract are clear and plain to consumers and, in order to further the understanding of the consumers when they are solicited to enter into consumer contracts, to provide information necessary with respect to the contents of the consumer contracts including, but not limited to, rights and duties of the consumers.

(2) When a consumer enters into a consumer contract, he/she shall endeavor to utilize the information provided by the business operator and to understand his/her rights and duties and such other things set forth in the consumer contract.

Chapter 2 Rescission of the Manifestation of Intention to Offer or Accept a Consumer Contract

Article 4 (Rescission of the Manifestation of Intention to Offer or Accept a Consumer Contract)

(1) A consumer may rescind his/her manifestation of intention to offer or accept a consumer contract if such manifestation was made by making the mistake set forth in any of the following items as a result of the act of the business operator set forth correspondingly in such item which was committed as it solicited the consumer to enter into such consumer contract:

(i) Act to make any misrepresentation with respect to material matters: Mistake that the content of said misrepresentation constitutes a fact.

(ii) Act to provide, with respect to any subject matter of such consumer contract, including the goods, rights, and services thereof, any conclusive judgment with respect to any matter which has uncertainty of change in the future including, but not limited to, the value of the subject matter in the future and the amount of money such consumer will be entitled to receive in the future: Mistake that the content of the conclusive judgment so provided is certain

(2) Consumers may rescind their manifestation of intentions to offer or accept a consumer contract if such manifestation was made as a result of the combination of (i) any statement by the business operator to the consumer which is advantageous to the consumer with respect to a certain material matter, or any matter relating to such material matter, AND (ii) the intentional omission by such business operator to disclose any fact which is disadvantageous to such consumer with respect to such material matter (limited, however, to such fact that the consumer should ordinarily believe would not exist if so disclosed), whereby such acts were committed as it solicited the consumer to enter into such consumer contract and induced the consumer to make a mistake that such fact does not exist: Provided, however, that the above provision shall not apply if, regardless of the attempt by the business operator to disclose such fact to such consumer, such consumer refuses to accept such disclosure.

(3) Consumers may rescind their manifestation of intentions to offer or accept a consumer contract if such manifestation was made because he/she was distressed by any of the acts of the business operation set forth in the following items which was committed as it solicited the consumer to enter into such consumer contract:

(i) Act not to withdraw from a residence of a consumer, or a place where the consumer engages in his/her business, even though the consumer has manifested to such business operator his/her intent that the it should withdraw therefrom.

(ii) Act not to allow a consumer to withdraw from a place where the business operator is making solicitation with respect to such consumer contract, even though the consumer has manifested his/her intent to withdraw therefrom.

(4) The "material matter" mentioned in item (i) and item (ii) of paragraph 1 hereof refers to the following matter relating to any consumer contract which normally should affect the judgment of the relevant consumer of whether or not to enter into such consumer contract.

(i) Quality, purpose and other content of the subject matter of such consumer contract, such as goods, right and service.

(ii) Consideration and other conditions for transaction of the subject matter of such consumer contract, such as goods, right and service.

(5) The rescission of a manifestation of intention to offer or accept a consumer contract pursuant to the provisions of paragraph 1 to 3 inclusive may not be asserted as a defense against a third party without knowledge.

Article 5 (Third parties entrusted to intermediate and agents)

(1) The preceding article shall apply mutatis mutandis to cases where a business operator entrusts a third party to intermediate a consumer contract between the business operator and a consumer (which shall be referred to simply as "entrustment" for purposes of this paragraph), and the third party (which includes persons entrusted by such third party (including any person who is entrusted through more than two layers of entrustment) who shall be referred to as "trustee etc." for purposes of the following paragraph) commits an act set forth in paragraphs 1 to 3 of the preceding article with respect to a consumer. In this case, "the business operator" referred to in the proviso of the second paragraph of the preceding article shall be deemed to be replaced with "the business operator or the trustee etc. provided in the first paragraph of the following article".

(2) Any agent of a consumer, agent of a business operator and agent of a person entrusted as above etc. involved in the execution of a consumer contract shall be deemed to be the consumer, business operator and the person entrusted etc., respectively, in application of paragraphs 1 to 3 of the preceding article (which includes the cases where it is applied mutatis mutandis pursuant to the preceding paragraph. The same shall apply in the next article and article 7).

Article 6 (Interpretation Provision)

The provisions of paragraphs 1 to 3 inclusive of article 4 shall not be interpreted to exclude the application of article 96 of the Civil Code (Act No. 89, 1896) as it applies to a manifestation of intention to offer or accept a consumer contract provided in these paragraphs.

Article 7 (Period for the Exercise of Right to Rescind, etc.)

(1) The right to rescind as provided in paragraphs 1 to 3 inclusive of article 4 shall extinguished by prescription if not exercised within six months from the time when ratification first becomes possible. The same shall apply if five years have elapsed from the time of the execution of a consumer contract.

(2) Article 191 and 280-12 of Commercial Code (Act No. 48, 1899) (including the cases where such provisions are applied mutatis mutandis in other Acts) shall apply to the rescission of subscription for shares or new shares to the extent it constitutes a consumer contract pursuant to paragraph 1 to 3 of article 4. In this case, "no person who has taken shares may claim the invalidation of his (her) subscription on grounds of mistake or non-compliance with any of the requirements relating to the share application certificate in paper form, nor may any person avoid his (her) subscription on the grounds of fraud or duress" in article 191 of the Act and "no person who has subscribed for new shares may claim the invalidation of his (her) subscription on grounds of mistake or non-compliance with any of the requirements as to the written share application certificate or thecertificate of a right to subscribe for new shares, nor may any person avoid his (her) subscription on the ground of fraud or duress " in article 280-12 of the Act shall be deemed to be replaced with "no person may rescind his (her) subscription provisions of application of paragraphs 1 to 3 inclusive of article 4 of Consumer Contract Act (which includes cases where article 5 of the same Act shall apply)" .

Chapter 3 Invalidation of Consumer Contract Clauses

Article 8 (Invalidation of clauses which exempt a business operator from liability for damages)

(1) The clauses set forth bellow shall be invalid.

(i) Clauses which totally exempt a business operator from liability to compensate damages incurred by a consumer as a result of the breach of contract by the business operator.

(ii) Clauses which partially exempt a business operator from liability to compensate damages incurred by a consumer as a result of the default of the business operator (limited to instances where the same arises from intentional act or gross negligence on the part of the business operator, the business operator's representative or employee).

(iii) Clauses which totally exempt a business operator from liability to compensate the damages incurred by a consumer under the Civil Code as a result of a tort committed on occasion of business operator's performance of a consumer contract.

(iv) Clauses which partially exempt a business operator from liability to compensate the damages incurred by a consumer under the Civil Code as a result of a tort (such tort shall be limited to instances where the same arises by intentional act or gross negligence on the part of the business operator, the business operator's representative or employee) committed on occasion of business operator's performance of a consumer contract.

(v) When a consumer contract is a contract for value, in case there exists a latent defect in the subject matter of a consumer contract (in case where a consumer contract is a contract for work, a defect should exist in the subject of the work. The same shall apply in the following paragraph), clauses which totally exempt a business operator from liability to compensate the damages incurred by a consumer as a result of such defect

(2) The clause provided in the fifth item of the preceding paragraph shall not apply in cases enumerated in the following sections.

(i) In case the relevant consumer contract provides that, in case there is any latent defect in the subject matter of such consumer contract, the relevant business operator shall assume the responsibility to replace the same with a substitute which is free of defect or to repair such defect; or

(ii) In case it is provided, in a contract which is executed between the relevant consumer and a business operator other than the relevant business operator (where the latter business operator entrusts the former business operator), or in a contract executed between the relevant business operator and other business operator for the benefit of the relevant consumer, which is concluded before or simultaneously with the consumer contractthat in case there is any latent defect in the subject matter of the relevant consumer contract, such other business operator shall assume either the responsibility, in whole or in part, to compensate the damages suffered by such consumer as a result of such defect, the responsibility to replace the same with a substitute which is free of defect, or the responsibility to repair such defect.

Article 9 (Invalidation of Clause which Stipulates the Amount of the Damages to be Paid by Consumer)

The clauses of a consumer contract set forth in the following items shall be void to the extent specified in the respective item:

(i) Any provision which liquidates in advance the amount of damages, or defines the penalty, associated with any termination of the relevant consumer contract where the aggregate sum of such amounts exceeds the average amount of damages which, depending on the category established in such provision such as the cause or timing of termination, should normally be suffered by the relevant business operator in association with the consumer contract similar to such consumer contract:To the extent of the amount which so exceeds.

(ii) Any provision which liquidates in advance the amount of damages, or defines the penalty, in case the relevant consumer fails to pay any money due and payable under the relevant consumer contract, in whole or in part, by the due date of payment (in case of any payment in two or more installments, hereinafter in this Item referring to the due date of the respective date of installment payment) where the aggregate sum of such amounts exceeds the amount which is calculated on a daily pro-rata basis by multiplying (a) the amount to be paid on such due date of payment less such portion of the amount to be paid on such due date of payment as has been already paid by (b) the rate of 14.6% per annum, covering the period from (and including) the date immediately following such due date of payment through the date when such payment is actually made:To the extent of the amount which so exceeds.

Article 10 (Invalidation of Clauses that Harm the Interests of Consumers One-sidedly)

Any provision which, in comparison with the case applied by the provision of the Civil Code, Commercial Code and other laws which do not relate to the public order, restricts the right of the consumer, or aggravate the duties of the consumer, and harms the interest of the consumers one-sidedly in contravention of the basic principle provided in the second paragraph of article 1 of the Civil Code shall bevoid.

Chapter 4 Miscellaneous Provisions

Article 11 (Application of Other Acts)

(1) The rescission of the manifestation of intention to offer or accept a consumer contract and validity of any provision of a consumer contract shall be subject to the provision of this Act and the relevant provisions of the Civil Code and Commercial Code, as well.

(2) If there is any provision in any law other than the Civil Code and Commercial Code with respect to the rescission of the manifestation of intention to offer or accept a consumer contract and validity of any provision of a consumer contract, the provision of such law shall prevail.

Article 12 (Exclusion from application)

This Act shall not apply to labor contracts.

Supplementary Provisions

This Act shall be enforced from April 1st, in 2001, and apply to consumer contracts concluded thereafter.