Sometimes, parties that originally agreed to transfer property will change their minds. This could be due to changed circumstances or even just a simple change of heart on behalf of the seller and buyer. If only one party tries to cancel the transaction this would lead to a breach of the contract, but if both parties agree to nullify their agreement then both the seller and the buyer can walk away from the transaction without legal consequence.
However, if the seller and buyer entered into a legally binding contract to sell property, simply walking away from it will not nullify the legal effect of their agreement. Therefore, in cases where parties wish to cancel their previous sales agreement it is advisable for them to sign a new contract terminating their original agreement.
This termination agreement can be a simple document that clearly states that both parties are agreeing to the cancelation of their previous agreement, but having this termination memorialized in a written contract protects both parties from the risk that they may later be held to the terms of their original agreement. As with all contracts it is advisable to have an attorney draft or look over any business agreement to ensure that both parties understand the rights and responsibilities that they are giving up.
If you have any questions about transfer of property in Japan, please contact our office to set up a legal consultation.