At a glance: electronic contracts in Japan

Contracting on the internet

Is it possible to form and conclude legal contracts digitally? If so, how are digital contracts formed and are there any exceptions for certain types of contract?

It is possible to form and conclude contracts electronically. While a normal contract between persons at a distance is formed upon the dispatch of a notice of acceptance, an electronic contract is formed at the time of receipt of the notice of acceptance by the other party.

Click-wrap contracts can be enforceable in Japan. Contracts can be formed by simply clicking the ‘I agree’ or ‘I accept’ button, which signals acceptance of the vendor’s terms and conditions.

However, some requirements must be satisfied for click wrap contracts to be enforceable. For example, it is required that the vendor’s terms and conditions be clearly shown on the screen during online transactions and the user agrees with the vendor’s terms and conditions by clicking the ‘I agree’ or ‘I accept’ button as conditions to effect such transactions. When the vendor’s terms and conditions are only posted on the website, and are not easy to notice, and users are not required to click the ‘I agree’ or ‘I accept’ button regarding the vendor’s terms and conditions for the use of the website, the click-wrap contract is not enforceable.

Working condition notices must be delivered in paper form unless the worker agrees otherwise.

Are there any particular laws that limit the choice of governing law, language of the contract or forum for disputes when entering into digital contracts? Do these distinguish between business-to-consumer and business-to-business contracts?

The Civil Code, the Consumer Contract Act, the Act on Specified Commercial Transactions and the Electronic Contract Act are the main laws. The Consumer Contract Act, the Act on Specified Commercial Transactions and the Electronic Contract Act distinguish between business-to-consumer and business-to-business contracts.

There are provisions for protecting consumers in contracts between businesses and consumers.

Under provisions relating to internet transactions, treatment of consumers’ erroneous transactions is important. Under the Civil Code, if there is gross negligence on the part of the consumer, a business entity may assert that a contract is valid even if a consumer has operated erroneously. However, under article 3 of the Electronic Contract Act, the business entity may assert that a contract is valid only when the entity has taken measures to confirm the consumer’s intent (eg, if the company has presented an opportunity for the consumer to confirm the content of an offer before making his or her final acceptance, or if the consumer has expressly abandoned any need for confirmation).

How does the law recognise or define digital or e-signatures? Must digital or e-signature providers be registered or licensed in your jurisdiction? What type of digital information can be signed and how does the signing take place?

Under the Act on Electronic Signatures and Certification Business, the term ‘electronic signature’ is defined as a measure taken with respect to information that can be recorded as an electromagnetic record. A record that is made in order to express information is basically presumed to be established authentically if the electronic signature is performed by the principal with respect to information recorded in such electromagnetic record. E-signature providers can be accredited by the Ministry of Justice, and only 10 e-signature providers were accredited as of June 2022.

Are any special forums for dispute resolution or remedies available for the breach of digital contracts?

There are no special forums for dispute resolution or remedies available for the breach of digital contracts, and the government continues to consult about establishing a new institution for dispute resolution in relation to the breach of digital contracts.