Commercial Transactions

Under Japanese law, an agent is someone who can act on behalf of another party. Normally this situation arises in the context of one party affirmatively granting agency powers to another party, such as the grant of a power of attorney. However, agency relationships can also arise as a result of employment contracts or a guardianship.

Japanese contract law, like the contract law of many other countries, does not require documentation to formalize a contractual relationship. In other words, contracts can be formed orally, without putting anything in writing, as long as there is a valid “offer” by one party and an “acceptance” by the other. However, while formalized documentation of a contract is not necessary, it can be very difficult to prove the content of a contract in court unless it was put into a writing signed by both parties.

Unmarried persons under the age of 20 are considered minors in Japan. Minors may not enter into contractual relationships without a parent’s (or guardian’s) permission. Therefore, a contract may be rescinded after-the-fact if a court finds that one of the parties was a minor without parental permission. Due to this requirement, idol groups and sports teams must secure the parental permission of their youngest recruits before having them sign an employment contract.

Japan does not have a separate code of law for contracts. Instead, contract law is governed by various laws contained in the Civil Code, the law of torts, the law of property, the law of succession and family law. While these codes contain the basic rules governing contract formation and execution in Japan, special rules relating to contracts between merchants are contained in the Commercial Code. Furthermore there are many other laws relating to protection of consumers and regulation of business operators.