The revised Civil Code (Japanese Civil Code) was implemented on April 1, 2020. In this revision, the rules regarding contracts have been significantly changed. Many IT companies create terms of service for their own services in transactions with customers, and new rules have been established in the revised Civil Code for such terms of service as “standard contract clauses”.
In the traditional Civil Code, there were no clear rules for things like terms of service that companies providing services uniformly apply to an unspecified number of users, and their validity was left to interpretation. Now that new rules have been established in the Civil Code for standard contract clauses, many companies that had been creating terms of service are being forced to review them in accordance with the rules of the revised Civil Code.
Therefore, in response to the revised Civil Code, which has newly established provisions for standard contract clauses, we will explain the points to check when revising the terms of service for BtoB services.
Two Requirements for Standard Contract Clauses Under the Revised Civil Code
- Transactions conducted by a specific party with an unspecified number of other parties
- The entirety or part of the content is uniform and is reasonable for both parties
Is a Template for Business-to-Business Contracts Considered a Standard Form Contract in Japan
In such business-to-business contract transactions, one party often presents a contract template that is signed without significant modifications. At first glance, it may seem to meet the requirements of “standard contract clauses”. However, depending on the power relationship with the trading partner, other templates may be presented from the trading partner, or there is a non-zero possibility that modifications to the contract content may be requested.
Therefore, as long as modifications to the contract content are assumed, the contract template cannot be said to be reasonable for both parties to be uniform in all or part of its content, and it is considered that it does not meet the requirements of “standard transactions”.
Unilateral Changes to Standard Contract Terms
Rules in the Revised Japanese Civil Code
The revised Japanese Civil Code has established provisions regarding changes to standard contract terms. Specifically, in order to change the standard contract terms, it is necessary to satisfy both substantive and formal requirements.
If these requirements are met, it is possible to change the terms without obtaining individual consent from the users. Of course, if individual consent is obtained from the users, the changes are valid even if these requirements are not met.
Substantive Requirements for Changing Standard Contract Terms
The substantive requirements for the validity of changes to standard contract terms are related to the content of the changes. Specifically, one of the following two points must be met:
- The content of the change is in the general interest of the users
- The content of the change does not contradict the purpose of the contract and is reasonable
Formal Requirements for Changing Standard Contract Terms
The formal requirements for validly changing standard contract terms are related to the change procedures. Specifically, both of the following two points must be met:
- Specify the time when the change takes effect
- Publicize the fact of the change, the content after the change, and the time when the change takes effect by appropriate methods such as the Internet
1. We may change the content of these terms without obtaining the consent of the contractee. We will notify the contractee only when we judge that there is a substantial change.
2. Even if this notice does not actually reach the contractee, the changed contract terms will apply to all contractees.
This clause is about the unilateral change of the terms, and it is a typical provision seen before the revision of the Japanese Civil Code. However, assuming the revised Japanese Civil Code, this clause needs to be revised. Specifically, it contradicts the formal requirements explained above.
As one of the formal requirements, it was necessary to “specify the time when the change takes effect.” Therefore, for the above clause, it is necessary to revise it to something like “If the contractee continues to use this service even after the implementation period has passed, the contractee is deemed to have agreed to the change.”
Also, as the second formal requirement, it was necessary to “publicize the fact of the change, the content after the change, and the time when the change takes effect by appropriate methods such as the Internet.” Therefore, in the above clause, it is necessary to include wording that corresponds to the requirements, such as “When we change these terms, we will publicize the implementation time and content of the changed terms by posting on our website or other appropriate methods, or notify the contractee.”
Summarizing the above, the clause proposal that corresponds to the revised Japanese Civil Code is as follows:
1. When we change these terms, we will publicize the implementation time and content of the changed terms by posting on our website or other appropriate methods, or notify the contractee.
2. If the contractee continues to use this service even after the implementation period has passed, the contractee is deemed to have agreed to the change.
Changes to the Content of the Service
We may change the content of this service as necessary without obtaining the consent of the contractee, and we will notify the contractee of the change on our website or by any method we deem appropriate.
Changes in Usage Fees Due to Changes in Contract Content
When there is a change in the contract content that involves a change in the usage fee, the change in the usage fee will be applied from the change application date stated in the change application form.
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