I. Choice of Law (Hoorei)

One issue to be confronted is the question of applicable law. Here, the relevant statutory provisions are contained in the Application of Law Code (Hoorei).

(i) Contract - Applicable Law

Application of Law Code Article 7(1), in the first instance, applies the principle of party autonomy. The parties, in other words, are first left with the freedom to determine, in express terms in the contract, the applicable law.

Where the parties do not, in the contract, specify the applicable law to govern their relationship the courts seek to apply the implied intention of the parties.

Should the court be unable to ascertain the express or implied intention fo the parties, the court will apply the "law of the place of juristic act" (lex loci actus) rule.

Where possible, the law of the place of juristic act is helf to be the place from where the offer was dispatched. See Articles 7(2) and 9 of the Code.

(ii) Tort - Applicable Law

In the field of torts, the courts in Japan apply the "law of the place where the facts giving rise to the claim arise" (lex loci) rule. This is provided for in Article 11 of the Application of Law Code.

II. Jurisdiction

Another issue is the threshold issue of jurisdiction.

(i) Contract - Jurisdiction

1. No specific statutory provisions exist in relation to transnational jurisdiction questions. Japanese law, therefore, applies domestic law to transnational cases in the absence of "special circumstances."

The question of where performance of the contract should occur is stipulated in Civil Code Article 484 (not to be confused with the Civil Procedure Code), or in Commercial Code Article 516 (1) in the case of a commercial transaction.

In the case of a defective product being delivered to a Japanese buyer, the Japanese buyer can claim damages in a Japanese court and the court will exercise its jurisdiction under these Codes.

2. Jurisdiction may be determined by express agreement between the parties provided that such agreement will not be enforceable should it conflict with the exclusive jurisdiction of a Japanese court, or, should the agreement to have a matter determined in a foreign jurisdiction be contrary to Japanese public policy.

(ii) Tort - Jurisdiction

In the case of tort, Article 5 (9) of the Civil Procedure Code gives jurisdiction to the place where the tort was committed. In the case of a Japanese consumer who purchased goods from an overseas supplier (through mail order, electronic mail or whatever) and who was injured in Japan, the Japanese court would exercise jurisdiction.

III. Other

No statute exists in Japan specifically concerned with e-commerce so the courts are currently left to apply a number of general laws to the new situation.

Note also the existence of the Products Liability Code which provides strict liability standards to manufacturers. Article 2 (3) defines "manufacturer" broadly to mean any person who manufactures, processes, or imports products as business or who, by putting his name, trade name, trademark or other feature on the product presents himself as its manufacturer.

English Language References

Oda, Hiroshi, Japanese Law (2nd edition), O.U.P. 1999.
CCH, Japan Business Law Guide, 1988 and updated.
Kitagawa, Zentaro, Doing Business in Japan, Matthew Bender & Co., New York, 1988 and updeated (see especially volumes 1 and 7).