An offer of a contract may not be withdrawn.
(1) An offer of a contract specifying a period for acceptance shall lose its effect if the offerer does not receive a notice of acceptance within the period specified.
(2) In a case where a notice of acceptance had arrived after the expiration of the period mentioned in the preceding paragraph, if it was dispatched at such a time that under normal circumstances it would have arrived within such period, the offerer shall dispatch, without delay, to the other party a notice of the delayed arrival:Provided, That this shall not apply in a case where a notice of the delay has already been dispatched by the offerer before its arrival.
(3) If the offerer has neglected to give the notice mentioned in the preceding paragraph, the notice of acceptance shall be deemed not to have been delayed.
An offer of a contract which does not specify a period for acceptance loses its effect if the offerer does not receive a notice of acceptance within a reasonable period.
The offerer may regard a delayed acceptance as a new offer in the cases of the preceding two Articles.
A contract inter absentes shall come into existence at the time when a notice of acceptance is dispatched.
In a case where no notice of acceptance is necessary either by reason of declaration of intention to that effect by the offerer, or by reason of custom, the contract shall come into existence upon the occurrence of an event which may be taken as a declaration of intention to accept.
Where offers of the same content, are sent to each other the contract shall come into existence at the time when each of the two offers has reached each other party.
If the offeree has accepted an offer but subject to a condition or with any other modification, he shall be deemed to have rejected the original offer and thereby simultaneously made a new offer.
(1) In a case where a contract, whose objective is unattainable, is concluded, a party to the contract who was aware of, or should have been aware of such unattainability, shall be liable for damages suffered by the other party who relied upon the contract as valid:Provided, That the amount of damages to be recovered may not exceed the profit which would have occurred if the contract was valid.
(2) The provisions of the preceding paragraph shall not apply in a case where the other party was aware of, or should have been aware of such unattainability.
(1) One of the parties to a bilateral contract may refuse performance of his own obligation until the other party tenders performance of his obligation:Provided, That this shall not apply where the obligation of the other party is not due.
(2) If one of the parties to a contract is bound to tender performance of his own obligation first to the other party, and if there is any significant cause existing by which the other party’s performance becomes difficult, the body of the preceding paragraph shall apply.
If the performance of an obligation of one of the parties to a bilateral contract becomes impossible by any cause for which neither of the parties is responsible, the obligor may not be entitled to counter-performance.
(1) If the performance of an obligation of one of the parties to a bilateral contract becomes impossible by any cause for which the obligee is responsible, the obligor may demand counter-performance. The same applies to cases where performance becomes impossible by any cause for which neither of the parties is responsible in the case of mora creditoris.
(2) In the cases of the preceding paragraph if the obligor has received any benefit by being relieved of his own obligation, he shall return such benefit to the obligee.
(1) Where a party to a contract has agreed therein to effect an act of performance in favour of a third person, the person may demand such act of performance directly from the obligor.
(2) In the case of the preceding paragraph the right of the third person shall come into existence from the time when he declares to the obligor his intention to accept the benefit of the contract.
In the case of the preceding Article the obligor may, with a reasonable period fixed, demand the third person to answer whether or not he will receive and enjoy the benefit stipulated in the contract. If the obligor has not received a definite answer from the third person within such period, it shall be deemed that the third person has refused to receive the benefit stipulated in the contract.
The right of the third person which has come into existence in accordance with the provisions of Article 539, shall not be altered or extinguished by the parties.
Defences incidental to the contract mentioned in Article 539 may be set up by the obligor against the third person who is to receive the benefit of the contract.
(1) If, pursuant to the contract or the provisions of Acts, one of the parties or both parties have a right of rescission for the future, or a right of rescission, either right of rescission shall be effected by a declaration of intention made to the other party.
(2) The declaration of intention mentioned in the preceding paragraph may not be withdrawn.
If one of the parties does not perform his obligation, the other party may fix a reasonable period and give peremptory notice demanding its performance, and may rescind the contract, if no performance is effected within such period:Provided, That if the obligor declares in advance his intention that he will not effect such performance, no peremptory notice shall be required.
If, according to the nature of the contract or by a declaration of intention of the parties, the objective for which the contract has been entered is unattainable unless it is performed at a designated time and date or within a designated period, and one of parties has not effected performance on his part, the other party may, without giving the notice mentioned in the preceding Article, rescind the contract.
If performance has become impossible for any cause for which the obligor is responsible, the obligee may rescind the contract.
(1) Where there are several persons as parties to each side of a contract, a right of rescission for the future or a right of rescission of the contract shall only be effected by or against all of them.
(2) If, in the case mentioned in the preceding paragraph the right of rescission for future or the right of rescission has lapsed against one of the parties, it shall also lapse as against the others.
(1) If one of the parties has rescinded the contract, each party shall be liable to restore his other party to his original position:Provided, That the rights of third persons shall not be prejudiced thereby.
(2) Interest shall be paid upon any money to be repaid in the case mentioned in the preceding paragraph as from the day on which such money has been received.
The provisions of Article 536 shall apply mutatis mutandis to the case mentioned in the preceding Article.
If one of the parties rescinds a contract for the future, the contract shall lose its effect for the future.
Rescission for the future or rescission of a contract shall not affect any claim for damages.
(1) If no period is fixed for the exercise of a right of rescission, the other party may demand of the person entitled to rescission to make a definite answer by fixing a reasonable period as to whether he rescinds the contract or not.
(2) If no notice of rescission has been received within the period mentioned in the preceding paragraph, the right of rescission shall lapse.
If a person entitled to a right of rescission has by his intentional act or negligence, materially damaged the subject matter of the contract, or has become unable to return it, or has caused it to be converted into a different kind of object by processing or altering it, the right of rescission shall be extinguished.
A contract of gift shall become effective when one of the parties declares his intention to transfer property of his own gratuitously to the other party and the other party agrees to accept it.
A contract of gift which is not in writing may be rescinded by either party.
(1) The donor may rescind a contract of gift in favor of the donee for the reasons as prescribed in the following subparagraphs:
1. If the donee has committed an act of crime against the donor, his or her spouse or lineal relatives by blood;and
2. Where the donee is under duty to support the donor, but does not perform this duty.
(2) The right of rescission mentioned in the preceding paragraph shall be extinguished after the lapse of six months from the day on which the donor was aware of the occurrence of any cause of rescission or at the time when he has declared an intention of acquiescence.
The donor may rescind a contract of gift, if after the conclusion of a contract of gift the donor’s property status has been adversely changed and the donor’s living has become gravely affected by the performance of contract of gift.
Rescission of a contract of gift in accordance with the provisions of the preceding three Articles shall not have any effect in respect of any portion as to which performance has been completed.
(1) A donor shall not be liable for any defect or deficiency in the thing or right which forms the subject of his gift:Provided, That this shall not apply to cases where he was aware of such defect or deficiency and has nevertheless failed to inform the donee thereof.
(2) In respect of a gift subject to a charge, the donor shall assume the same liability in respect of warranty as that of a seller to the extent of such charge.
A contract of gift for periodic performance shall lose its effect upon the death either of the donor or of the donee.
The provisions relating to bilateral contract shall apply to a gift subject to a charge, in addition to the provisions of this Section.
The provisions relating to testamentary gifts shall apply mutatis mutandis to a contract of gift which is to become effective upon the death of the donor.
A sale shall become effective when one of the parties agrees to transfer a property right to the other party and the other party agrees to pay the purchase-price to the former.
(1) A unilateral promise to sell or purchase shall become effective as a sale from the time when the other party declares his intention to complete the sale.
(2) Where no period is fixed for the declaration of intention mentioned in the preceding paragraph, the person who has made a unilateral promise may give a peremptory notice to the other party to give a definite answer within a reasonably fixed period as to whether he will or will not complete the sale.
(3) If the other party fails to give an answer within that period, the unilateral promise shall become void.
(1) If one of the parties to a contract of sale has delivered, at the time of entering into the contract, money or other things under the name of down payment, assurance deposit, etc., to the other party, unless otherwise agreed upon between the parties, the deliverer by giving up such money, and the receiver by repaying double such money, may rescind such contract before one of the parties has initiated performance of the contract.
(2) The provisions of Article 551 shall not apply to the case mentioned in the preceding paragraph.
The expenses relating to a contract of sale shall be borne by both parties in equal shares.
The provisions of this section shall apply mutatis mutandis to contracts for value other than sales:Provided, That this shall not apply in the case where the nature of such contracts does not so permit.
(1) The seller shall transfer a right which has been made the object of a sale to the buyer, and the buyer shall pay the purchase-price to the seller.
(2) The duties of both parties mentioned in the preceding paragraph shall, unless there exists any specific agreement or custom, be performed concurrently by both parties.
In the case where a right, which has been made the object of a sale, belongs to another person, the seller shall acquire such right and transfer it to the buyer.
If, in the case mentioned in the preceding Article the seller is unable, by acquiring the right he has sold, to transfer it to the buyer, the buyer may rescind the contract:Provided, That if he was aware, at the time the contract was made, that the right did not belong to the seller, he may not claim damages.
(1) If the seller was unaware, at the time the contract was made, that the right which has been made the object of a sale did not belong to him, and the seller is unable, by acquiring the right he has sold, to transfer the right to the buyer, the seller may, paying damages suffered by the buyer, rescind the contract.
(2) If, in the case of the preceding paragraph, the buyer was aware at the time the contract was entered that the right did not belong to the seller, the seller may, by giving notice that he is unable to transfer the right to the buyer, rescind the contract.
(1) If the seller is unable to acquire and transfer the right to the buyer by reason of the fact that a part of the right which forms the object of a sale belongs to another, the buyer may demand a reduction of the purchase-price in proportion to the part.
(2) If in the case of the preceding paragraph the buyer would not have bought the remaining part, had such alone been the object of the sale, the buyer acting in good faith may rescind the whole of the contract.
(3) The bona fide buyer may claim damages besides claiming for a reduction of the purchase-price or the rescission of a contract.
The right mentioned in the preceding Article shall be exercised within one year from the time when the buyer became aware of the fact, if the buyer was acting in good faith, and from the time when the contract was entered if the buyer was acting in bad faith.
The provisions of the preceding two Articles shall apply mutatis mutandis to the case where the articles sold by quantity show a shortage or part of the subject matter of sale had already been lost at the time when the contract was entered and the buyer was unaware of such shortage or loss.
(1) Where the subject matter of a sale is subject to a superficies, servitude, chonsegwon, right of retention, or pledge and the buyer was unaware thereof, the buyer may rescind the contract only if the objective of the contract is not unattainable thereby. In other cases the buyer may only claim damages.
(2) The provisions of the preceding paragraph shall apply mutatis mutandis to the cases where a servitude which has been represented as existing in favour of the immovable which is the subject of the sale does not exist or where a registered lease exists on such an immovable.
(3) The rights mentioned in the preceding two paragraphs shall be exercised within one year from the time the buyer became aware of the fact.
(1) If the buyer has been unable to acquire or has lost the ownership of the immovable which forms the subject of a sale by reason of the exercise of a right of mortgage or chonsegwon existing over such an immovable, the buyer may rescind the contract.
(2) In the cases of the preceding paragraph, if the buyer has preserved the ownership at his own expense, he may demand reimbursement of such expenses from the seller.
(3) In a case where mentioned in the preceding two paragraphs the buyer may recover damages he has sustained from the seller.
The provisions of the preceding Article shall apply mutatis mutandis to the sale of superficies or chonsegwon which have been the subject of the mortgage.
(1) In the case of a sale by auction, the successful bidder may in accordance with the provisions of the preceding eight Articles, either rescind the contract or demand a reduction of the purchase-price against the obligor.
(2) In the case of the preceding paragraph, if the obligor is under financial disability, the successful bidder may demand all or some of the proceeds of the sale which the obligee has received as his portion of the proceeds of the sale.
(3) If, in the cases of the preceding two paragraphs, the obligor was aware of any deficiency in the object or right sold and nevertheless failed to disclose it, or the obligee was aware of such deficiency and demanded a sale by auction, the successful bidder may claim damages either from the obligor or obligee who was aware of such deficiency.
(1) If the seller of a claim warrants the solvency of the obligor, he is presumed to have warranted his solvency at the time the contract was entered.
(2) If the seller of a claim which is not yet due warrants the solvency of the obligor, he is presumed to have warranted his solvency at the time when the claim becomes due.
(1) If any defects exist in the subject-matter of a sale, the provisions of Article 575 (1) shall apply mutatis mutandis:Provided, That if the buyer was aware of or was not aware of such defects due to his negligence, this shall not apply.
(2) The provisions of the preceding paragraph shall not apply to the cases of a sale by auction.
(1) Even where the subject matter of a sale has been specified in kind, if any defects exist in the specified subject matter, the provisions of the preceding Article shall apply mutatis mutandis.
(2) In the cases of the preceding paragraph, the buyer may demand the non-defective item without rescinding a contract or claiming for damages.
The rights mentioned in the preceding two Articles shall be exercised by the buyer within six months from the time when he was first aware of such fact.
The provisions of Article 536 shall apply mutatis mutandis to the cases of Articles 572 through 575, 580 and 581.
Even where the seller has made a special stipulation that he is not liable in respect of the warranties mentioned in the preceding fifteen Articles, he may not be relieved of liability in respect of any fact of which he was aware and nevertheless failed to disclose, or in respect of any right which he himself created in favour of, or assigned to, a third person.
If a time has been stipulated for the performance of duties of one party to a contract of sale, the same time-limit shall also be presumed to have been stipulated for the other party’s performance of duties.
If the purchase-price is to be paid in exchange for the delivery of the subject matter of the sale, the payment shall be made at the place of delivery.
If the subject matter of a sale which has not yet been delivered produces fruits after a contract of sale has been entered, such fruits shall vest in the seller. The buyer shall pay interest on the purchase-price from the day of the delivery:Provided, That if a time-limit has been stipulated for payment of the purchase-price, this shall not apply.
If a third person claims a right over the subject matter of the sale, and consequently there is a danger of the buyer’s losing what he has bought in whole or in part, he may refuse payment of the purchase-price to the extent of such danger:Provided, That this shall not apply when the seller furnishes reasonable security.
In the case of the preceding Article, the seller may demand the buyer to deposit the purchase-price.
(1) If the seller reserves the right of redemption at the time of the contract of sale, the seller may redeem the object of a sale by returning the purchase-money received and the expenses relating to such a sale borne by the buyer.
(2) If any specific agreement concerning the redemption money has been made between the parties referred to in paragraph (1), such agreement shall govern the matters concerning redemption money.
(3) Unless a specific agreement has been made between the parties in the cases of paragraphs (1) and (2), the fruits of the object of the sale and the interest on the purchase-price shall be deemed to have been setoff against each other.
(1) The period for redemption shall not exceed five years in the case of immovables and three years in the case of movables. If any period specifically agreed upon between the parties exceeds the period mentioned above, it shall be reduced to five years in the case of immovables and three years in the case of movables.
(2) If a period for redemption has been fixed, it may not subsequently be extended.
(3) If no period for redemption has been designated, the period shall be deemed to be five years in the case of immovables and three years in the case of movables.
If, where the object of a sale is an immovable, the reservation of the right of redemption has been registered simultaneously with the registration of a sale, such registration shall be effective against the third persons.
Where a creditor of the seller desires to redeem the property in place of the seller, the buyer may extinguish the right of redemption by discharging the debt of the seller, out of the balance remaining after the amount to be repaid by the seller has been deducted from the value of the object, as assessed by an expert appointed by the court, and by paying the surplus, if any, to the seller.
(1) The seller shall lose the right of redemption unless he tenders the purchase-price he received and the expenses relating to the sale to the buyer within the specified period for redemption.
(2) If the buyer or any subsequent purchaser has disbursed expenses in respect of the object of a sale, the seller shall reimburse the same amount in accordance with the provisions of Article 203:Provided, That with respect to useful expenses the court may upon the application of the seller, allow him a reasonable period for reimbursement.
If, after one of the co-owners of the object of a sale, in which the right of redemption has been reserved, has sold his share, and the partition of, or sale by auction of such an object has taken place, the seller may exercise the right of redemption in respect of that part or the purchasemoney which the buyer has received or is to receive:Provided, That the buyer who has not given any notice upon the partition or a sale by auction to the seller, may not set up against the seller therewith.
A contract of exchange becomes effective when two parties agree to exchange any property right other than money.
If one of the parties has agreed to transfer the property rights mentioned in Article 596 together with the additional payment of money, the provisions relating to the purchase-price of a sale shall apply mutatis mutandis with respect to the money.
A loan for consumption becomes effective when one of the parties agrees to transfer the ownership of money, or any other substitute, to the other party, and the other party agrees to return the same amount of money or the same kind, quality, and quantity of any substitute therefor.
A loan for consumption shall cease to be effective, if one of the parties has been declared bankrupt before the lender delivers the object of the loan for consumption to the borrower.
Computation of interest on a loan for consumption shall begin from the time when the borrower has received the object of a loan for consumption. When the borrower has delayed receiving the delivery of the object for a reason for which the borrower is responsible, the computation of interest shall be commenced from the time when the lender has tendered the delivery of such an object.
Either party to a loan for consumption bearing no interest may rescind the contract at any time before the object of a loan for consumption has been delivered to the borrower:Provided, That if damages have been caused to the other party due to the rescission of the contract, the rescinding party shall be liable to compensate for such damages.
(1) If any defect is found in the object of a loan for consumption bearing interest, the provisions of Articles 580 through 582 shall apply mutatis mutandis.
(2) In the case of a loan for consumption bearing no interest the borrower may return the value of the defective object:Provided, That if the lender was aware of the defect and, nevertheless, failed to inform the borrower thereof, the provisions of paragraph (1) shall apply.
(1) The borrower shall return to the lender an object of the same kind, quality, and quantity as the object borrowed at the time agreed upon by the parties.
(2) If no time for the return of an object has been stipulated by the parties, the lender shall fix a reasonable period and then demand the return of the object loaned:Provided, That the borrower has the right to return the object borrowed at any time.
If it becomes impossible for the borrower to return an object of the same kind, quality, and quantity as the borrowed one, he shall refund the value of the object at the current market price:Provided, That this shall not apply to the cases mentioned in Articles 376 and 377 (2).
In case where both parties are liable to furnish money, or any other substitutes, not by a loan for consumption, if both parties agree to make the subject matter the object of a loan for consumption, it becomes effective as a loan for consumption.
If, in the case of pecuniary loans, the borrower accepts delivery of valuable instruments, or any other thing in place of money, the amount of the loan shall be the current price of the object at the time of such delivery to the borrower.
If the borrower has promised to substitute any other property right in lieu of the borrowed object, the value of the substituted property shall not exceed the aggregate value of the original amount borrowed plus the interest thereon.
Any agreement entered by the parties which is in violation of the provisions of the preceding two Articles and is prejudicial to the borrower is not valid even if claimed as a redemption or as any other legal remedy.
A loan for use becomes effective when one of the parties agrees to deliver an object to the other party for his gratuitous use, and the taking of profits therefrom, and when the other party agrees to return such object after having used and taken profits therefrom.
(1) The borrower shall use and take profits from the object in such a manner as is determined by the contract or by the nature of its subject matter.
(2) The borrower may not allow a third person to use or take profits from the object borrowed without the consent of the lender.
(3) If the borrower has violated the provisions of paragraphs (1) and (2), the lender may rescind the contract for the future.
(1) The borrower shall bear the ordinary and necessary expenses relating to the object borrowed.
(2) The provisions of Article 594 (2) shall apply mutatis mutandis to any other expenses.
The provisions of Articles 559 and 601 shall apply mutatis mutandis to loans for use.
(1) The borrower shall return the object borrowed at the time agreed upon by the parties.
(2) If no time for the return of the object borrowed has been stipulated by the parties, the borrower shall return the object when he has completed the use thereof and the taking of profits therefrom in conformity with the purpose specified in the contract or the nature of the subject matter:Provided, That the lender may rescind the contract for the future at any time after a reasonable period has elapsed to allow for the specified use of the object and the taking of profits therefrom.
The lender may rescind the contract for the future when the borrower has died or has been declared bankrupt.
The borrower shall restore the object borrowed to its original condition before he returns it to the lender and the borrower may remove any attachments which he has attached thereto.
When several persons jointly borrow an object or objects, they shall be jointly obligated.
Compensation for damages which have arisen from the use of the object, or the taking of profits therefrom contrary to the tenor of the contract or the nature of the subject matter, and the reimbursement of expenses incurred by the borrower, shall be claimed within six months from the date of the return of the object borrowed to the lender.
A lease becomes effective when one of the parties has agreed to allow the other party to use an object and take profits therefrom, and the latter has agreed to pay rent for it.
Where a lease is given by a person who has no capacity or authority to dispose of property, its duration shall not exceed the periods mentioned below:
1. Ten years for the lease of land for the purpose of planting, collecting salt, or construction built with stone, lime-stone, brick, or any other similar construction;
2. Five years for the lease of any other land;
3. Three years for the lease of a building or any other structure;and
4. Six months for the lease of a movable.
The periods mentioned in the preceding Article may be renewed:Provided, That such renewal shall be effected within one year in the case of land, within three months in the case of a building or any other structure, and within one month in the case of a movable, prior to the expiration of the period.
(1) The lessee of an immovable may, unless there exists any contrary agreement between the parties, request the lessor to cooperate in effecting necessary formalities for the registration of the lease.
(2) The lease of an immovable, if registered, shall be effective against the third persons from the time registration has been effected.
(1) When the object of a lease of land is to own a building, if a building on such land has been registered by the lessee, the lease of land shall be effective against a third person even if such a lease of land has not been registered.
(2) If a building has been destroyed or has become dilapidated from use prior to the termination of the lease period, it shall lose the effect mentioned in paragraph (1).
A lessor is bound to deliver the object to the lessee, to maintain conditions necessary for the use and taking profits of the leased object while the lease is in force.
The lessee may not object to a lessor who performs any act deemed necessary for the preservation of the object leased.
If the lessor performs an act of preservation against the will of the lessee and the lessee is thereby incapable of attaining the objective for which the lease has been obtained, the lessee may rescind the contract for the future.
(1) If a lessee has made necessary expenditures relating to the preservation of the object leased he may demand reimbursement thereof from the lesson.
(2) If the lessee has made any useful expenditures, the lessor shall reimburse the lessee, to the extent that the increase in value remains subsisting at the time when the lease terminates, in the amount disbursed by the lessee or the amount by which the value of the object has been increased. In such a case, the court may, upon the application of the lessor, allow him reasonable time for settlement with the lessee.
(1) If part of the leased object has become unusable, or has become impossible to take profit from, due to loss or any other cause other than the fault of the lessee, the lessee may demand a reduction of the rent in proportion to the part which has been lost.
(2) If, as mentioned in paragraph (1), the remaining part of the object is not sufficient to enable the lessee to attain the objective for which the lease has been made, the lessee may rescind the contract for the future.
If the rent previously agreed upon by the parties has become unreasonable due to the increase or decrease of the public impost imposed upon the object leased or any other change in the economic situation, either party may demand of the other party to raise or reduce the rent for the future.
(1) A lessee may not assign his rights or sub-lease the leased object without the consent of the lessor.
(2) If the lessee violates the provisions of paragraph (1), the lessor may rescind the contract for the future.
(1) If a lessee has sub-leased the object with the consent of the lessor, the sub-lessee assumes the obligations directly to the lessor. In this case the sub-lessee may not set a defense against the lessor by a payment of the rent to the sub-lessor.
(2) The provisions of paragraph (1) shall not prejudice the exercise of the lessor’s right against the lessee.
If the lessee has sub-leased the object with the consent of the lessor, the rights of the sub-lessee shall not be extinguished even when the contract of lease is terminated by an agreement between the lessor and the lessee.
The provisions of Articles 629, 630 and 631 shall not apply in cases where the lessee of a building allows a third person to use a small part of the building leased.
Rent shall be paid at the end of each month in the case of a movable, a building, or a building site, and at the end of each year in the case of any other land:Provided, That in the case of a leased object which has a harvest season, rent shall be paid, without delay, upon the close of such a season.
If repairs are necessary to the leased object or a third person claims a right over it, the lessee shall notify the lessor thereof without delay:Provided, That this shall not apply if the lessor has prior knowledge of this information.
(1) If no period for a lease has been fixed, either party may give notice to the other party at any time to rescind the lease for the future.
(2) Rescission of the lease for the future shall be effective upon the expiration of the periods mentioned in each of the following subparagraphs, from the day on which the other party has received the notice mentioned in paragraph (1):
1. Six months, if the lessor has given notice of rescission of the lease to the lessee, and one month, if the lessee has given notice of rescission of the lease to the lessor, in the case of land, building and any other structure;and
2. Five days in the case of a movable.
Even in cases where a lease period has been fixed by the parties, the provisions or Article 635 shall apply mutatis mutandis if one or both of the parties has reserved a right to rescind the lease for the future with respect to the remaining unexpired term.
(1) If the lessee has been declared bankrupt, either the lessor or the bankruptcy trustee may, in accordance with the provisions of Article 635, give notice to rescind the lease for the future with respect to the remaining unexpired term, notwithstanding the fact that the lease contained a fixed period of rental.
(2) In the cases of paragraph (1), neither party may claim damages arising from the rescission of the lease for the future with respect to the remaining unexpired term.
(1) If a lease has been terminated by the notice of rescission with respect to its unexpired rental period, and the leased object has lawfully been sub-leased, the lessor may not set up a claim against the sub-lessee based on the rescission of the lease unless notice is given to the sub-lessee.
(2) The provisions of Article 635 (2) shall apply mutatis mutandis in cases where the sub-lessee receives the notice mentioned in paragraph (1).
(1) If the lessee continues to use the object leased, or takes profits therefrom after the expiration of the period of the lease, and the lessor fails to raise any objection thereto within a reasonable period, it shall be deemed to have created a new lease on the same terms and conditions as those of the previous one:Provided, That either party may give notice to the other party to rescind the lease for the future in accordance with the provisions of Article 635.
(2) In the case of paragraph (1), the security for the previous lease furnished by a third person shall be extinguished by expiration of the period.
In the case of the lease of a building or any other structure, if the amount of rent in arrears reaches the rent for two periods, the lessor may rescind the contract for the future.
The provision of Article 640 shall apply mutatis mutandis to the case of a lease of land where the object is to own a building or any other structure, or is for planting, collecting salt, and stock farming.
The provisions of Article 288 shall apply mutatis mutandis in the cases of Article 641 if a building or any other structure on such land becomes an object of real right granted by way of security.
The provisions of Article 283 shall apply mutatis mutandis to buildings, trees, or any other facilities on land remaining after the expiration of the period of the lease of land where the object is to own a building or any other structure, or is for planting, collecting salt, and stock farming.
(1) In the case of a land lease where the lessee’s objective is to own a building or any other structure, or for planting, collecting salt, and stock farming, where the land has been lawfully sub-leased, if any building, tree or any other facilities on the land remains subsisting at the time when the periods for lease and sub-lease have concurrently terminated, the sublessee may demand that the lessor give him a lease on the same terms as those of the former sub-lease.
(2) The provisions of Article 283 (2) shall apply mutatis mutandis, if, in the case of paragraph (1), the lessor does not desire to lease his land.
The provisions of Article 644 shall apply mutatis mutandis in a case where a superficiary leases land which became the object of superficies.
(1) If the lessee of a building or any other structure has attached an Article to such a building, etc., with the consent of the lessor for the benefit of the lessee’s use, the lessee may demand that the lessor purchase such accessories at the time when the contract of lease terminates.
(2) The provisions of the preceding paragraph shall apply to the accessories purchased from the lessor.
(1) If, in a case where the lessee of a building or any other structure has lawfully sub-leased such a building, etc., and the sub-lessee has attached an Article to such a building, etc., with the consent of the lessor for the benefit of the sub-lessee’s use, the sub-lessee may demand that the lessor purchase such accessories at the time when the contract of sublease terminates.
(2) The provisions of the preceding paragraph shall also apply to the accessories purchased from the lessor or purchased from the lessee with the consent of the lessor.
If the lessor of land levies an attachment pursuant to the claims relating to the lease, on a movable owned by the lessee which is affixed to the leased land, or offered for the benefit of the lessee’s use, and fruits accruing from such land, it shall be effective as a pledge.
If the lessor of land levies an attachment on a building on his land owned by the lessee, pursuant to the claims for rent of the last two years, for which period rent has not been paid, such right shall be effective as a mortgage.
If the lessor of a building or any other structure attaches, pursuant to the claims created under the lease, a movable owned by the lessee and also attached to the building or any other structure, it shall be effective as a pledge.
Any agreement entered by the parties in contravention of the provisions of Articles 627, 628, 631, 635, 638, 640, 641, and 643 through 647 which is unfavorable to either the lessee or sub-lessee shall be void.
The provisions of Articles 628, 638, 640, 646 through 648, 650 and Article 652 shall not apply to the cases where it is evident that a lease or sub-lease is given for temporary use.
The provisions of Articles 610 (1), 615 through 617 shall apply mutatis mutandis to the cases of lease.
A contract of employment becomes effective when one of the parties agrees to render services to the other party and the latter agrees to pay the former remuneration therefor.
(1) Where no agreement has been entered upon between the parties as to the amount of remuneration, custom shall prevail accordingly.
(2) Remuneration shall be made at the time mutually agreed upon, but where no time has been specified, custom shall prevail. In the absence of any established custom of time, it shall be paid after the completion of the work agreed upon without delay.
(1) The employer may not assign his rights to a third person without the consent of the employee.
(2) An employee may not substitute a third person to perform his services without the consent of the employer.
(3) If one of the parties violates the provisions of paragraphs (1) and (2), the other party may rescind the contract for the future.
(1) If the employer demands of the employee some unrelated service which has not been agreed upon between the parties, the employee may rescind the contract and refuse to perform his services in the future.
(2) If, in a case where the specified services which have been agreed upon between the employer and employee require special training, experience, and knowledge on the part of the employee, the employer may rescind the contract for services for the future if the employee fails to possess the above qualifications agreed upon.
(1) If the period of employment agreed upon between the parties exceeds three years, or if it is to continue for the lifetime of one of the parties or of a third person, either party may give notice of his intention to rescind the contract of employment for the future at any time after the expiration of three years.
(2) In the case of paragraph (1), the notice of intention to rescind the contract of employment for the future by either of the parties becomes effective after three months have elapsed from the date of receipt by the other party of such notice.
(1) If no period for the employment has been fixed by the parties, either party may give notice to the other party of his intention to rescind the contract for the future at any time.
(2) In the case of paragraph (1), the notice of intention to rescind for the future becomes effective after one month has elapsed from the date of receipt by the other party of such notice.
(3) If remuneration has been fixed on a set and regular periodical basis, the rescission of the contract for the future shall be deemed to be effective after one full period has elapsed from the date of completion of the current period during which the other party received the notice of intention to rescind the contract for the future.
Even where a fixed period for the employment has been set by the parties, either party may, if any unavoidable cause arises, rescind the contract for the future:Provided, That if such cause arises out of the negligence of one of the parties, such party is liable for damages to the other party.
(1) If the employee continues to render services after the expiration of the agreed period, and the employer has not raised any objection thereto within a reasonable period, they are deemed to have entered into a new contract of employment on the same terms as before:Provided, That either party may give notice to the other party to rescind the contract for the future in accordance with the provisions of Article 660.
(2) In the case of paragraph (1), the security furnished by a third person in respect to the former contract of employment shall be extinguished at the expiration of the first period agreed upon.
(1) If the employer has been declared bankrupt, either the employee or the bankruptcy trustee may rescind the contract of employment, even when a term of employment contract has been fixed.
(2) In the case of paragraph (1), neither party may claim from the other any damages arising from the rescission of the contract for the future.
A contract for work becomes effective when one of the parties has agreed to perform a certain job and the other has agreed to pay remuneration for the result of such work.
(1) The remuneration shall be made simultaneously with the delivery of the finished object of the work:Provided, That if the delivery of the object of the work is not required, remuneration shall be paid without delay after the work has been performed.
(2) The provisions of Article 656 (2) shall apply mutatis mutandis to the remuneration mentioned in paragraph (1).
The contractor for work on an immovable may demand of the person who ordered the work to create mortgage on the immovable in order to secure the contractor’s claim in relation to his remuneration mentioned in Article 665.
(1) If any defect exists in the completed subject-matter of a work or in a certain part of the subject-matter of a work which has been finished before the completion of all the work, the person who ordered the work may fix a reasonable period for the contractor to repair and rectify such defect:Provided, That this shall not apply if the defect is not material and if its rectification would involve excessive expense.
(2) The person who has ordered the work may claim damages in lieu of, or together with, rectification of the defect.
(3) The provisions of Article 536 shall apply mutatis mutandis in the cases of paragraph (2).
If, by reason of some defect in the finished subject-matter of the work, the purpose of the contract can not be achieved, the person who ordered the work may rescind the contract:Provided, That this shall not apply to a building or any other structure on land.
The provisions of Articles 667 and 668 shall not apply if the defect in the finished subject-matter of the work has arisen through the nature of the materials supplied by the person who ordered the work, or by reason of instructions given by him:Provided, That this shall not apply if the contractor, knowing the impropriety of the materials or instructions, has failed to notify the person who ordered the work.
(1) The demand for rectifying the defects, the claim for damages, or the rescission of the contract mentioned in Articles 667, 668 and 669 shall be made within one year from the day of the delivery of the subject matter of the work.
(2) Where the delivery of the subject-matter of the work is not required, the period mentioned in paragraph (1) shall commence to run from the day on which the work was finished.
(1) A contractor for work with respect to land, a building or any other structure shall be liable for any defects in the subject-matter of the work or in its foundations for a period of five years after delivery:Provided, That this period shall be ten years where the subject-matter of the work is made of stone, limestone, brick, metal or any other similar material.
(2) If the subject-matter is destroyed or damaged by reason of such defects mentioned in paragraph (1), the person who ordered the work shall exercise the rights mentioned in Article 667 within one year from the day that such destruction or damage took place.
Even where there was a special agreement between the parties that the contractor shall not be bound by warranty liabilities mentioned in Articles 667 and 668, he may not be relieved of liabilities with respect to the defects in workmanship or materials of which he was aware and nevertheless failed to give notice.
Before the completion of the contracted work, the person who ordered the work may rescind the contract at any time, but shall be liable for damages.
(1) If the person who ordered the contracted work has been declared bankrupt, the contractor or the bankruptcy trustee may rescind the contract. In such a case, the contractor may claim in the distribution of the bankrupt estate remuneration for the part of work already completed, and for any other expenses which are not included in such remuneration.
(2) In a case where of paragraph (1), neither party may demand from the other party compensation for any damages which have arisen from the rescission of the contract.
A travel contract shall become effective when one of the parties agrees to offer tourism products and services such as transportation, accommodation, tours etc., to the other party and the other party agrees to pay the purchase price to the former.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
If a traveler is yet to commence travel, he/she may terminate their contract at any time, provided that the traveler shall pay for any damage done to the other party.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
(1) In cases where unavoidable reasons occur, each party may terminate the contract provided that a party shall pay for the damage done to the other party where the reason had occurred due to gross negligence on the part of the former.
(2) In cases where a contract has been terminated pursuant to paragraph (1), the tour host who holds the contractor’s obligation to send the traveler back shall perform this duty.
(3) In cases where the reason to terminate the contract belongs to a certain party, any additional expenses caused by the contract termination in paragraph (1) shall be paid by that party. In cases where the reason belongs to neither of the parties, the expense shall be borne by both persons in equal proportion.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
The traveler shall deliver the payment within the agreed time period and follow the custom in cases where the contract at the time period does not exist. In cases where a custom does not exist, he/she shall deliver the payment promptly after the travel has been terminated.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
(1) In cases where there exist defects in the travel, the traveler may demand the travel host to correct the defect or to reduce payment, provided that the correction shall not be demanded where it requires excessive costs or where a reasonable correction cannot be expected.
(2) The demand for correction in paragraph (1) shall be done within a reasonable time period, provided that it is not demanded where immediate correction is required.
(3) The traveler may demand damage compensation on behalf of or with the correction demand and pay reduction.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
(1) A traveler may terminate the contract where there exist serious defects in the tour without any correction, or in cases where he/she cannot expect the contract to be executed.
(2) In cases where the contract had been terminated the travel host loses the right to claim payment, provided that the traveler shall return the benefit to the travel host where the traveler had gained benefit from the executed travel.
(3) The travel host is obliged to exercise necessary measures for contract termination and shall send the traveler back to where the contract included the obligation of such. In such cases the travel host may demand part of this expense from the traveler.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
The rights pursuant to Article 674-6 and 674-7 shall be exercised during the travel and within six months of the termination date of travel as determined in the contract.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
Any contract that breaches the provisions of Articles 674-3, 674-4 or 674-6 through 674-8 and is disadvantageous to the traveler takes no effect.
<This Article Newly Inserted by Act No. 13125, Feb. 3, 2015>
An advertisement for prize contest shall become effective when an advertiser has expressed his intention to give a certain reward to any person who performs a certain act and a contestant has accomplished such an act as has been specified in the advertisement.
(1) If there are several persons who have accomplished the act specified in the advertisement, the person who accomplished it first shall be entitled to the reward.
(2) If two or more persons have accomplished the act simultaneously, each of them shall be entitled to the reward in equal proportions:Provided, That If the reward is by its nature indivisible, or if it has been stipulated in the advertisement that only one person is to receive the reward, the ultimate recipient of such a reward shall be determined by drawing lots.
The provisions of Article 676 shall apply mutatis mutandis where a person has accomplished the act specified in the advertisement without knowledge of such an advertisement.
(1) An advertisement offering the reward only for one of several contestants who has performed the act in the manner deserving the highest credit shall be effective only if a certain period of definite duration is stipulated for the contest.
(2) In a case where of paragraph (1), the decision as to whose performance deserves the highest credit shall be made by the person designated in the advertisement. If no such designation has been made in the advertisement, the decision shall be made by the advertiser himself.
(3) A decision that no performance deserves the highest credit among the contestants shall be impermissible:Provided, That this shall not be the case where declaration of a different intention from the above exists in the advertisement or the standards of the decision has been stipulated by the nature of the advertisement.
(4) No contestant may raise objection to the decision mentioned in paragraphs (2) and (3).
(5) If two or more persons are judged to have performed the act with the same highest credit, the provisions of Article 676 (2) shall apply mutatis mutandis.
(1) Where a period within which the act specified by the advertiser is to be accomplished has been fixed in the advertisement, the advertisement may not be withdrawn before the expiration of such period.
(2) In a case where of an unfixed period within which the act specified by the advertiser is to be performed, the advertiser may, until such time as a person has completely performed the specified act, withdraw the advertisement in the same manner in which it was originally effected.
(3) If the advertisement cannot be withdrawn in the same manner as the advertisement was originally effected, the withdrawal may be made in any other similar manner:Provided, That such withdrawal shall be effective only as against persons who have become aware thereof.
A mandate shall become effective when one of the parties has entrusted the other party with the management of affairs and the other party has consented thereto.
A mandatary shall manage the affairs entrusted to him with the care of a good manager in accordance with the tenor of the mandate.
(1) A mandatary may not allow any third person to manage the entrusted affairs without the consent of the mandator or any inevitable reasons.
(2) If a mandatary has allowed a third person to manage the entrusted affairs in accordance with the provisions of paragraph (1), the provisions of Articles 121 and 123 shall apply mutatis mutandis.
A mandatary shall upon demand by the mandator report on the status of the management of the entrusted affairs, and upon the termination of the mandate he shall make a full report on the entire developments with respect to the management of the entrusted affairs without delay.
(1) A mandatary shall deliver to the mandator all the money and any other things which he has received and the fruits which he has collected therefrom in the course of management of the entrusted affairs.
(2) All rights which the mandatary has acquired in his own name on behalf of the mandator shall be transferred to the mandator.
If a mandatary has spent for his own benefit any money which he ought to deliver to the mandator or which is to be used for the mandator’s benefit, he shall pay interest thereon as from the day on which he spent such money, and if there are any further damages, he shall also be liable therefor.
(1) In the absence of a special agreement, a mandatary may not demand remuneration from the mandator.
(2) Where it was agreed that a mandatary is to receive remuneration, he may not demand it until the entrusted affairs have been completely performed:Provided, That if the remuneration has been fixed by periods, he may demand it after the expiration of the period.
(3) If a mandate terminates in the course of performance of the entrusted affairs by the mandatary due to any cause not attributable to the mandatary, he is entitled to remuneration in proportion to the affairs already managed by him.
If any expense is required for the management of the entrusted affairs, the mandator shall, upon demand by the mandatary, pay them in advance.
(1) If a mandatary has defrayed any expenses necessary for the management of the entrusted affairs, he may demand from the mandator the reimbursement of such expenses with interest thereon from the day on which they were defrayed.
(2) If a mandatary has assumed an obligation necessary for the management of the entrusted affairs, he may request the mandator to perform it in his place and, if the obligation is not due, to furnish adequate security.
(3) If a mandatary, without any negligence on his part, sustains damages through the management of the entrusted affairs, he may demand compensation therefor from the mandator.
(1) Either party may at any time rescind a contract of a mandate for the future.
(2) If one of the parties rescinds a mandate for the future without any inevitable reasons when it would be unfavourable to the other party, he shall compensate the other party for any damages occasioned by such rescission.
A mandate shall terminate upon the death or bankruptcy of either party. The same shall apply where the mandatory is adjudged to commence adult guardianship.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>
If, on the termination of a mandate, the circumstances are of an urgent nature requiring the continuous management, the mandatory, his successor or his agent by law shall continue to manage the entrusted affairs until the mandator, his successor, or his agent by law becomes in a position to take over the management of the affairs. In this case, the continuous management after the termination of a mandate shall be deemed to have the same effect as the original mandate.
No termination of a mandate can, whether the ground therefor exists on the part of the mandator or of the mandatory, be set up against the other party, unless the other party is given notice thereof or he is otherwise aware thereof.
Bailment shall become effective when one of the parties has committed to the other party the custody of money, securities or any other things, and the other party has consented thereto.
A bailee may not use the bailed Articles without the consent of the bailor.
A gratuitous bailee shall give the same degree of care in the custody of the bailed Articles as he gives with respect to his own property.
If a third person alleging a claim right over the bailed Articles has commenced an action against the bailee or levied an attachment thereon, the bailee shall notify the bailor thereof without delay.
A bailor shall indemnify the bailee for damages suffered by the bailee, as a result of the nature of, or any defect in, the bailed Articles:Provided, That this shall not be the case if the bailee was aware of such defects.
If a period was fixed for a bailment, a bailee may not, in the absence of any inevitable reason, rescind a contract of a bailment for the future before the expiration of the stipulated period of time:Provided, That the bailor may rescind the contract at any time.
If no period was fixed for a bailment, either party may rescind a contract of a bailment at any time.
The bailed Articles shall be returned at the place where they have been kept:Provided, That if the bailee has for any justifiable cause removed it to another place, he may return it at the place where the Articles actually exist.
The provisions of Articles 682, 684 through 687 and 688 (1) and (2) shall apply mutatis mutandis to a bailment.
Where the bailee is allowed by the contract to consume the bailed Articles, the provisions relating to loans for consumption shall apply mutatis mutandis:Provided, That if no time for its return has been fixed by the contract, the bailor may at any time demand its return.
(1) A partnership shall become effective when two or more persons have agreed to carry on a joint undertaking by making mutual contribution thereto.
(2) The contribution mentioned in paragraph (1) may be made in cash or in kind such as other property or labor service.
The contribution made by each partner and the other property of the partnership shall belong to all the partners jointly.
If, where the contribution is to be made in cash, a partner delayed in making his contribution, he shall, besides paying any interest in arrears, compensate for all damages resulting therefrom.
(1) If a manager of the partnerships affairs has not been designated by the partnership contract, such a manager shall be elected with an affirmative vote of not less than two-thirds of all the partners.
(2) The management of the partnership affairs shall be decided by a majority of the partners. If several managers are appointed to take charge of the affairs of the partnership, the management of the affairs shall be decided by a majority of such managers.
(3) The ordinary affairs of the partnership may, notwithstanding the provisions of paragraph (2), be managed solely by any partner or any manager, as the case may be, acting alone:Provided, That if other partners or other managers, as the case may be, raises an objection to such acts before the completion thereof, he shall immediately suspend these acts.
The provisions of Articles 681 through 688 shall apply mutatis mutandis to partners who manage the affairs of the partnership.
A partner who manages the partnership affairs may not be allowed to resign without justifiable reasons and shall not be removed from the office except with the unanimous consent of the other partners.
The partners who manage the partnership affairs shall be presumed to have a representative power of the management of the partnership affairs.
Each partner may at any time inspect the affairs and status of the property of the partnership.
(1) In the absence of an agreement between the partners as to the ratio of the sharing of profits and losses, it shall be decided in proportion to the value of the contribution of each partner.
(2) If the ratio has been fixed as to the sharing of either profits or losses, such ratio shall be presumed to apply both to profits and losses.
A creditor of the partnership who was not aware of the ratio of the sharing of losses among the partners at the time when his claim came into existence, may exercise his right against each partner in equal shares.
If any partner does not have sufficient means to discharge his obligations, his portion shall be equally divided among other partners.
Attachment of a partner’s share shall be effective against the partner’s right to future dividends and return of share.
A debtor of the partnership cannot set-off his obligation against a claim which he has against a partner.
(1) If a partnership contract provides for no fixed period of the duration of the partnership, or if it has been specified therein that the partnership shall continue its existence during the life time of the partners, each partner may retire at any time:Provided, That he may not, in the absence of any inevitable reason, retire at a time which would be unfavorable to the partnership.
(2) Even when a period has been fixed for the duration of the partnership, each partner may retire, if any inevitable reason exists therefor.
In addition to the cases provided for in Article 716, a partner shall cease to be such in any of the following circumstances:
1. Death;
2. Bankruptcy;
3. Commencement of adult guardianship;
4. Expulsion.
<This Article Wholly Amended by Act No. 10429, Mar. 7, 2011>
(1) Expulsion of a partner may be made only with just cause and by the unanimous consent of all other partners.
(2) The decision of expulsion mentioned in paragraph (1) can not be set up against the expelled partner until he is notified of such a decision.
(1) The accounts between an ex-partner and remaining partners shall be settled based on the status of the property of the partnership at the time when the former ceased to be a partner.
(2) The share of an ex-partner may be paid out in cash irrespective of the nature of his original contribution.
(3) In a case where of a matter having not been completed at the time when a partner ceases to be such, the account may be settled after such matters have been completed.
Any partner may demand dissolution of the partnership if any inevitable reasons therefor exists.
(1) If a partnership is dissolved, the liquidation shall be conducted jointly by all the partners or by a person appointed by them.
(2) The appointment of a liquidator mentioned in paragraph (1) shall be decided by a majority of all the partners.
The provisions of the latter part of Article 706 (2) shall apply mutatis mutandis where there are two or more liquidators.
The provisions of Article 708 shall apply mutatis mutandis where the liquidator is appointed from among the partners.
(1) The provisions of Article 87 shall apply mutatis mutandis to the duties and powers of the liquidator.
(2) The surplus assets shall be distributed among the partners in proportion to the value of their contributions.
A contract of life annuity shall become effective when one of the parties has agreed to deliver money, or other things, periodically to the other party or to a third person, until the end of his life or that of the other party or the third person.
A life annuity shall be computed by the day.
(1) If an obligor on a life annuity neglects to pay the periodical payments or fails to perform any of his other duties after he has received the principal of the annuity, the obligee on a life annuity may demand the return of such principal:Provided, That in such case, the obligee shall return to the obligor the balance, after interest on the principal sum has been deducted from the periodical payments already received by him.
(2) The provisions of paragraph (1) shall not preclude any claim for damages.
The provisions of Article 536 shall apply mutatis mutandis to the cases mentioned in Article 727.
(1) If death occurs by any reason for which the obligor on a life annuity is responsible, the court may, upon the application of the obligee or his successor, declare that the obligation shall continue to exist for a reasonable period.
(2) The right mentioned in Article 727 may also be exercised even in the cases of paragraph (1).
The provisions of this Section shall apply mutatis mutandis to a life annuity effected by a testamentary gift.
A compromise shall become effective when the parties have agreed to terminate a dispute between them by mutual concessions.
A contract of a compromise may not be canceled on the ground of a mistake:Provided, That this shall not be the case where such a mistake is concerned with the matters relating to the qualification of either party of a compromise or any matters other than those which are pertinent to the dispute subject to the compromise.