Consumer Protection in Japanese Contract Law

Abstract

This short report presents a survey of consumer protection under Japanese contract law. In Japan, the Consumer Contract Act was enacted in 2000, but even before this, some acts provided special remedies for consumers. Therefore, it is appropriate to divide this report into two parts, namely, before and after the Consumer Contract Act. Before discussing Japanese contract law, Iʼd like to confirm the nature of the problem ̶ the necessity for consumer protection under contract law. In Japan, although I believe the situation is almost the same in Australia, between consumers and businesses, there are considerable gaps in the quality and quantity of information and in the negotiating power (Consumer Contract Act Article 1 points out this situation). Regarding the latter point (the gap in negotiating power), we must not forget the fact that most contracts between consumers and businesses are made by means of standard contracts, for which two problems can be identified. First, many consumers fail to read the contract before agreeing to it, and even if they do read it, it can be too complicated for the consumer to understand, as is the case with insurance policies. Second, the standards are prepared by the businesses before the negotiation begins, and it is practically impossible for the consumers to ask for an amendment of the terms, which means that those terms are not negotiated. For these reasons, there can be unfair terms in contracts between consumers and businesses, hence the need for special protection for consumers.