Contract payment clauses in Japan are similar to those in contracts of other jurisdictions. The payment clause in a contract determines how much one party will pay the other and under what conditions. While this seems simple enough, it is all too easy to simply list the price of the contract and forget to include other important details that, if ignored, may result in disputes at a later date.
For example, in international contracts the two parties often use different currencies, so picking the currency to be used for payment, or at least specifying the exchange rate, will ensure that disputes over insufficient payment will not arise later. Furthermore, banks in Japan tend to take large fees in order to transfer money internationally and these fees can double or triple depending on how many banks are needed to transfer the money between the parties. Therefore, the parties should specify which side will pay which banking charges as well as any potential tax that might be levied on the transfer.
The time for payment can also become an issue when time zones or bank processing delays are involved. Unless these issues are specifically included in the agreement, a party may claim that they paid on time even though the money doesn’t arrive for several days due to a later time zone and delays in the international wire transfer.
If you have any questions about contract law in Japan or contract payment clauses in Japan, please contact our office to set up a legal consultation with one of our lawyers.