• Submission of Bill to Amend the Act on Specified Commercial Transactions and Bill to Amend the Consumer Contract Act
  • May 18, 2016 | Authors: Harukuni Ito; Kyosuke Katahira; Yuichiro Mori; John C. Roebuck; Michiru Takahashi
  • Law Firm: Jones Day - Tokyo Office
  • On March 4, 2016, in order to address changes in the socioeconomic climate, including the progressively aging population, and to protect the interest of consumers, the Bill to Amend the Act on Specified Commercial Transactions ("Commercial Transactions Bill") and the Bill to Amend the Consumer Contract Act ("Consumer Contract Bill") were submitted to the ordinary session of the Diet.

    The Commercial Transactions Bill would primarily enable the Consumer Affairs Agency or other agencies to increase the effectiveness of business suspension orders by prohibiting corporate executives from incorporating new companies or taking other actions that may allow them otherwise to proceed with the suspended business. The Commercial Transactions Bill also would introduce a system allowing consumers to withdraw an offer to purchase excessive quantities when made in the context of telemarketing sales.

    In addition, the Consumer Contract Bill would expand the scope of rescindable contracts (introducing a right to rescind contracts for the purchase of excessive quantities and an expansion of substantial matters related to misrepresentation), extend the period when the right to rescind may be exercised, and expand the scope of contractual terms and conditions considered to be invalid (invalidating any clause that waives termination in the event that the business operator defaults).

    It is recommended that businesses that conduct specified commercial transactions or engage in consumer business review their practice from a compliance perspective in light of the content of the Commercial Transactions Bill and the Consumer Contract Bill.