CIVIL ACT (PART I GENERAL PROVISIONS) [See entire ACT]

CHAPTER V JURISTIC ACTS

SECTION 1 General Provisions

Article 103 (Juristic Acts Contrary to Social Order)

A juristic act which has for its object such matters as are contrary to good morals and other social order shall be null and void.

Article 104 (Unfair Juristic Act)

A juristic act which has conspicuously lost fairness through strained circumstances, rashness, or inexperience of the parties shall be null and void.

Article 105 (Optional Provisions)

If the parties to a juristic act have declared an intention which differs from any provisions of Acts or subordinate statutes, which are not concerned with good morals or other social order, such intention shall prevail.

Article 106 (De Facto Custom)

If there is a custom which differs from any provisions of Acts or subordinate statutes which are not concerned with good morals or other social order, and if the intention of the parties to a juristic act is not clear, such custom shall prevail.

SECTION 2 Declaration of Intention

Article 107 (Declaration of Untrue Intention)

(1) A declaration of intention shall be valid, even if the declarant has made it with the knowledge that such declaration is different from his true intention:Provided, That such declaration of intention shall be void if the other party was aware, or should have been aware, of the real intention of the declarant.
(2) The nullity of a declaration of intention as mentioned in the preceding paragraph cannot be set up against a third person acting in good faith.

Article 108 (Fictitious Declaration of Intention in Collusion)

(1) A fictitious declaration of intention made in collusion with any other party shall be null and void.
(2) The nullity of a declaration of intention as mentioned in the preceding paragraph cannot be set up against a third person acting in good faith.

Article 109 (Declaration of Intention under Mistake)

(1) A declaration of intention may be voidable if made under a mistake in regard to any essential elements of the juristic act:Provided, That if there has been gross negligence on the part of declarant, he shall not claim it to be voidable.
(2) The voidance of a declaration of intention as mentioned in the preceding paragraph cannot be set up against a third person acting in good faith.

Article 110 (Declaration of Intention by Fraud or Duress)

(1) A declaration of intention made by fraud or duress may be voidable.
(2) If a third person has been guilty of fraud or duress in respect to a declaration of intention made to any other party, such declaration of intention may be voidable only in a case where the other party was aware, or should have been aware, of the fact.
(3) The voidance of a declaration of intention under the preceding two paragraphs cannot be set up against a third person acting in good faith.

Article 111 (Time to be Effective of Declaration of Intention)

(1) A declaration of intention made to another party shall be effective as from the time when notice thereof has reached him.
(2) The validity of a declaration of intention shall not be effected, even if the declarant dies or loses his capacity to act after he has sent the notice.

Article 112 (Effect of Declaration of Intention to Person with Limited Capacity)

If a party to whom a declaration of intention has been made is a person with limited capacity at the time he/she receives it, the declaration of intention cannot be set up against him/her:Provided, That the same shall not apply after his/her legal representative becomes aware of the receipt of such declaration.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 113 (Service of Declaration of Intention by Publication)

In a case where the declarant, (without his negligence), is unable to name the other party or his whereabouts such declaration may be made by means of publication under the Civil Procedure Act.

SECTION 3 Agency

Article 114 (Effect of Acts by Agent)

(1) A declaration of intention made by an agent, within the scope of his authority while disclosing the fact that he is acting for a principal, shall be effective directly against the principal.
(2) The provisions of the preceding paragraph shall apply mutatis mutandis to a declaration of intention made by a third person to an agent.

Article 115 (Act without Disclosing Agency)

A declaration of intention made by an agent without disclosing that he is acting for a principal shall be deemed to have been made on his own behalf, but the provisions of paragraph (1) of the preceding Article shall apply mutatis mutandis, if the other party was aware, or should have been aware, that it was made on behalf of the principal.

Article 116 (Defective Acts by Agent)

(1) In a case where the validity of a declaration of intention is to be affected by reason of absence of intention, fraud, duress, or by reason of knowledge or negligent ignorance of certain circumstances, the existence or nonexistence of such reasons shall be determined on the basis of the agent.
(2) In a case where an agent has been commissioned to do a specific juristic act and he has done such act in conformity with the principal’s instructions, the principal cannot set up the agent’s ignorance of any circumstances of which he himself was aware. The same shall apply if the principal was ignorant of such circumstances through his own negligence.

Article 117 (Capacity to Act of Agent)

An agent needs not be a person of full capacity.

Article 118 (Scope of Agent’s Authority)

An agent whose authority is not specified has the authority to do only the following acts:
1. Acts of preservation;and
2. Acts of making use of, or improving the thing or the right which is the object of agency, but only in so far as the nature of such thing or right is not altered thereby.

Article 119 (Multiple Agency)

In case of two or more agents, each agent shall represent the principal unless provided otherwise in the Acts or in the delegation of authority.

Article 120 (Power of Appointment of Subagent by Agent in Fact)

An agent created by a juristic act shall not appoint a subagent, except in a case where he has obtained the consent of his principal or an unavoidable reason exists.

Article 121 (Responsibility for Appointment of Subagent by Agent in Fact)

(1) If, in the case mentioned in the preceding Article, the agent has appointed a subagent, he shall be responsible to the principal in respect of the appointment and supervision of the subagent.
(2) In a case where an agent has appointed a subagent as designated by the principal, he shall incur no responsibility, unless he knew such subagent to be unfit or untrustworthy and neglected to notify the principal thereof or to remove him.

Article 122 (Power of Appointment of Subagent by Agent by Law and Responsibility thereof)

An agent created by law may, on his own responsibility, appoint a subagent:Provided, That he shall incur only the responsibility specified in paragraph (1) of the preceding Article, in case an unavoidable reason exists.

Article 123 (Authority of Subagent)

(1) A subagent shall represent the principal in respect of acts within the scope of his authority.
(2) A subagent has the same rights and duties as the agent towards the principal or third persons.

Article 124 (Representation on His Own Behalf, Representation of Both Parties)

Without the consent of the principal, an agent shall not perform a juristic act for the principal to which the agent himself is the other party, or shall not become agent of both parties to one juristic act:Provided, That this shall not apply in the performance of an obligation.

Article 125 (Apparent Representation by Indication of Conferment of Power of Representation)

A person who has indicated to a third person that he conferred certain power to another person shall be responsible for juristic acts done by such other person towards the third person within the scope of such power:Provided, That this shall not apply in a case where the third person was aware, or should have been aware, that such other person had no power of representation.

Article 126 (Apparent Representation in Excess of Authority)

If an agent has performed a juristic act in excess of his authority, and if a third person had justifiable reason to believe that the agent had authority to do such an act, the principal shall be responsible for the act.

Article 127 (Causes for Lapse of Power of Representation)

The power of representation shall lapse if any of the following causes arises:
1. Death of the principal;
2. Death, commencement of adult guardianship, or bankruptcy of the agent.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 128 (Lapse of Power of Representation in Fact)

The power of representation created by a juristic act shall lapse upon termination of the caused juristic relations in addition to the causes mentioned in the preceding Article. The same shall apply in a case where the principal withdraws the delegation of authority before the juristic relations are terminated.

Article 129 (Apparent Representation after Lapse of Power of Representation)

The lapse of power of representation cannot be set up against a third person acting in good faith, unless such third person was negligent in not knowing such lapse.

Article 130 (Unauthorized Representation)

If a person without power of representation concludes a contract as an agent of another, such contract shall not be effective against the principal, unless it is ratified by the principal.

Article 131 (Right of Peremptory Notice of Other Party)

In the case of a person without power of representation concluding a contract as an agent of another, the other party may give peremptory notice to the principal demanding a definite answer as to whether he ratifies the contract or not, within a period reasonably fixed by the other party. If the principal does not send a definite answer within such period, he is deemed to have refused to ratify.

Article 132 (Other Party of Ratification or Refusal)

The declaration of intention of a ratification or refusal cannot be set up against the other party, unless it is made to him:Provided, That this shall not apply in a case where the other party was aware of the fact.

Article 133 (Effect of Ratification)

In the absence of any declaration of intention to the contrary, ratification shall be effective retroactively as from the time the contract was entered:Provided, That the right of a third person shall not be prejudiced thereby.

Article 134 (Right of Withdrawal of Other Party)

A contract made by a person without power of representation may be withdrawn in respect to the principal or his agent by the other party, so long as it has not been ratified by the principal:Provided, That this shall not apply in a case where the other party was aware of the fact that such person had no such power when the contract was entered.

Article 135 (Responsibility of Unauthorized Agent to other Party)

(1) If a person who has made a contract as an agent of the other party can neither prove his/her authority nor get the principal to ratify the contract, he/she shall be liable to the other party, at the latter’s option, either for the performance of the contract or for the compensation for damage or losses.
(2) Paragraph (1) shall not apply if the other party was aware, or should have been aware, that the person who has made a contract as an agent had no power of representation, or if the person who has made the contract as an agent was a person with limited capacity.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 136 (Unilateral Act and Unauthorized Representation)

The provisions of the preceding six Articles shall apply to a unilateral act, only in a case where, at the time the act was done, the other party either consented to the act being done without proper authority by the person holding himself out to be an agent, or did not contest his authority. The same shall apply to a unilateral act which was done, with his consent, to a person without power of representation.

SECTION 4 Nullity and Voidance

Article 137 (Partial Nullity of Juristic Act)

In a case where a part of a juristic act is null, the entire part of the juristic act shall be made null:Provided, That in a case where it is deemed that the juristic act would have been done if the null part had not existed, then the rest of the act shall not become null.

Article 138 (Conversion of Null Act)

In a case where a null juristic act possesses requirements for another juristic act, and it is deemed that if the parties had known the nullity, they would have intended to do the other juristic act, such a null act shall have the effect as the other juristic act.

Article 139 (Ratification of Null Act)

A null juristic act shall not become effective by ratification:Provided, That if the party has ratified it with the knowledge of its nullity, he shall be deemed to have performed a new juristic act.

Article 140 (Persons Voiding Juristic Acts)

A voidable juristic act may be voided only by a person with limited capacity, a person who has made a declaration of intention by mistake, fraud or duress, or such person’s agent or successor.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 141 (Effect of Voidance)

A juristic act which has been voided shall be deemed void from the beginning:Provided, That a person with limited capacity shall be liable to make reparation only to the extent that he/she is still enriched by reason of such act.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 142 (Other Party in Voidance)

In a case where the other party to a voidable juristic act is an identified person, the voidance shall be effected by declaring intention to the other party.

Article 143 (Method and Effect of Ratification)

(1) A voidable juristic act may be ratified by the persons mentioned in Article 140. After the ratification it shall not be voided.
(2) The preceding Article shall apply mutatis mutandis to the preceding paragraph.

Article 144 (Requirements for Ratification)

(1) Ratification shall become effective only if it is made after causes for voidance have ceased.
(2) Paragraph (1) shall not apply where ratification is made by a legal representative or guardian.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>

Article 145 (Legal Ratification)

If any of the following events takes place with regard to a voidable act after it has become possible to ratify in accordance with the provisions of the preceding Article, the act shall be deemed to have been ratified;Provided, That this shall not apply where any objection is reserved.
1. Performance in full or part;
2. Demand for performance;
3. Novation;
4. Furnishing of security;
5. Assignment, in whole or in part, of the rights acquired by the voidable act;and
6. Compulsory execution.

Article 146 (Lapse of Right of Voidance)

The right to declare an act voidable shall be exercised within three years from the time when it becomes possible to ratify, or within ten years from the time of performing the juristic act.

SECTION 5 Conditions and Time

Article 147 (Effect of Fulfilment of Conditions)

(1) A juristic act subject to a condition precedent shall become effective upon the fulfilment of the condition.
(2) A juristic act subject to a condition subsequent shall cease to be effective upon the fulfilment of the condition.
(3) If the parties declare an intention that the effect of the fulfilment of conditions be affected retroactively before the actual fulfilment, this intention shall prevail.

Article 148 (Prohibition of Infringement of Conditional Right)

Neither party to a juristic act subject to a condition shall, during the pendency of the condition, do anything to impair the benefit which the other party might derive from such act upon the fulfilment of the condition.

Article 149 (Disposition, etc. of Conditional Right)

The rights and duties of the parties during the pendency of a condition may be disposed of, inherited, preserved or secured in accordance with the general rules.

Article 150 (Act against Trust and Good Faith as to Condition)

(1) If a party who is to be disadvantaged upon the fulfilment of a condition has intentionally obstructed the fulfilment of such condition against the principles of trust and good faith, the other party may treat the condition as having been fulfilled.
(2) If a party who is to be advantaged upon the fulfilment of a condition has intentionally fulfilled such condition against the principles of good faith and trust, the other party may treat the condition as not having been fulfilled.

Article 151 (Unlawful Condition, Fulfilled Condition)

(1) If a condition is against good morals or other social order, the juristic act subject to the condition shall be null and void.
(2) If the condition has already been fulfilled at the time of the juristic act, such juristic act shall be unconditional in the case of a condition precedent, and null and void in the case of a condition subsequent.
(3) If the non-fulfilment of the condition was already certain at the time of the juristic act, such juristic act shall be unconditional in the case of a condition subsequent, and null and void in the case of a condition precedent.

Article 152 (Effect of Arrival of Time)

(1) If a juristic act is subject to a time of commencement, it shall be effective when such time arrives.
(2) If a juristic act is subject to a time of termination, it shall cease to be effective when such time arrives.

Article 153 (Benefit of Time and Waiver thereof)

(1) Time is presumed to be stipulated for the benefit of the obligor.
(2) The benefit of time may be waived, but the interests of the other party shall not be prejudiced thereby.

Article 154 (Right Subject to Time and Applicable Provisions)

The provisions of Articles 148 and 149 shall apply mutatis mutandis to a juristic act subject to time.

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