A panel of the Justice Ministry’s Legislative Council has begun discussing revisions to the law of obligations, which sets down rules related to personal liability for sales and other commercial contracts. The discussions come at the request of Justice Minister Keiko Chiba.

The law of obligations was enacted in 1896 and is part of the Civil Code, which came into effect in 1898. Revisions to the law would represent the first major reform of the civil law system. The social circumstances surrounding the law of obligations have changed greatly changed since 1896: commercial transactions are far more complex, and are more often international in scope. Today there is also more attention paid to the rights of consumers.

As it stands, the Civil Code is hard for lay people to understand and lacks specificity. For example, Article 415 of the Civil Code says that if a debtor fails to fulfill the “main object” of an obligation, a creditor can file a damages claim. But there are no explanations as to what qualifies as the “main object.” Any changes proposed by the panel will need to cite legal precedent and established custom to bridge the gap between today’s society and a law that is more than a century old.

The content of the law needs to be altered so that it can be easily applied in daily life. For example, there is broad inconsistency regarding the period of limitation for the right to collect a debt. Although the law says that in principle this right expires after 10 years, there is much discrepancy. The right of a salaried worker or entertainer to claim wages, and the right of a restaurant or hotel owner to pursue fees from customers, expires after one year. The right of a retail shop owner or craftsman to claim payment for goods or services expires in two years. In the case of doctors and lawyers, meanwhile, the period is three years.

The panel must consider the opinions of lawyers, business people, consumers and labor union members so as to ensure the revised law will allow for smooth financial dealings, and prevent problems going forward as society continues to change.

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