Commercial contracts—Japan—Q&A guide
Commercial contracts—Japan—Q&A guide

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Commercial contracts—Japan—Q&A guide
  • 1. Is there an obligation to use good faith when negotiating a contract?
  • 2. How are ‘battle of the forms’ disputes resolved in your jurisdiction?
  • 3. Is there a legal requirement to draft the contract in the local language?
  • 4. Is it possible to agree a B2B contract online?
  • 5. Are there any statutory or other controls on parties’ freedom to agree terms in contracts between commercial parties in your jurisdiction?
  • 6. Are standard form contracts treated differently?
  • 7. What terms are implied by law into the contract? Is it possible to exclude these in a commercial relationship?
  • 8. Is your jurisdiction a signatory to the United Nations Convention on Contracts for the International Sale of Goods (the Vienna Convention)?
  • 9. Is there an obligation to use good faith when entering and performing a contract?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to commercial contracts in Japan published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2020).

Authors: TMI Associates—Hidenori Nakagawa; Kentaro Tanaka; Mizuo Kimiya

1. Is there an obligation to use good faith when negotiating a contract?

Yes. Although a party to a contract, in principle, has full discretion whether or not to enter into the contract up until execution, even in a phase where the contract is yet to be concluded, the negotiating parties are required to act in good faith. If a party did not act in good faith and as a result the other party suffers damages, the party failing to act in good faith may be liable for such damages incurred in the following cases:

  1. a contract has been concluded, but the contract is found invalid for certain reasons, such as the impossibility of performance, and the party knew or should have known of such impossibility;

  2. negotiations aiming to conclude a contract had reached a final phase, but ultimately the contract was not concluded because the party did not act in good faith in failing to conclude the contract; or

  3. a contract was effectively concluded, but as a result of the party’s provision of false information, the process and contents thereof were disadvantageous to the other party.

It should

Popular documents