Civil Code

Even something that cannot be given an estimated monetary value may be the subject of a claim.

If the subject of a claim is the delivery of a specific thing, the obligor must retain the thing with the due care of a prudent manager, which is determined in light of the contract or other sources of claims and the common sense trading practices, until the delivery.

If the subject matter of a claim is designated only with reference to a type and its quality cannot be determined in light of the nature of the juridical act or intention of the parties, the obligor must deliver a thing of medium quality.

In the case referred to in the preceding paragraph, if the obligor has completed the acts necessary to deliver the thing, or has designated the thing the obligor is to deliver with the consent of the obligee, that thing thenceforth constitutes the subject matter of the claim.

If the subject matter of a claim is money, the obligor, at the obligor's own choice, may make the payment in currency of any kind; provided, however, that this does not apply to if the delivery of a specific kind of currency is the subject of the claim.

If the specific kind of currency that is the subject matter of the claim has lost its mandatory circulating power at the time of the payment, the obligor must make payment in other currency.

The provisions of the preceding two paragraphs apply mutatis mutandis if the delivery of the currency of a foreign state is the subject of the claim.

If the amount of the claim is designated in the currency of a foreign state, the obligor may make the payment in Japanese currency converted with the foreign exchange rate at the place of the performance.

Unless the parties manifest a particular intention with respect to a claim which bears interest, the rate of the interest is the statutory interest rate on the time when the interest first accrues.

The statutory interest rate is 3% per annum.

Notwithstanding the provisions of the preceding paragraph, pursuant to the provisions of Ministry of Justice Order, the statutory interest rate is to change pursuant to the provisions of the following paragraph for each term consisting of three years.

The statutory interest rate for each term is the rate calculated by adding or deducting the rate equivalent to the difference between the benchmark rate for the most recent term during which there was a change in the statutory interest rate pursuant to the provisions of this paragraph (referred to as the "most recent term of change" in this paragraph below) and the benchmark rate for the current term (if the decimal portion is a figure with less than 1%, it is to be rounded down ), to or from the statutory interest rate for the most recent term of change.

The term "benchmark rate" prescribed in the preceding paragraph means the rate announced by the Minister of Justice as the rate calculated by dividing, by 60, the sum of the average interest rate for short-term loans for each month (meaning the average of the interest rates for loans (limited to loans for a term of less than one year) extended by banks in each month) during the period from January of the year six years before the year which contains the first day of each term to December of the year two years before the year which contains the first date of each term (if the decimal portion is a figure with less than 0.1%, it is to be rounded down), pursuant to the provisions of Ministry of Justice Order.

If the payment of interest corresponding to one year or more is delayed, and if the obligor does not pay that interest notwithstanding the demand by the obligee, the obligee may incorporate that interest into the principal.

If the subject of the claim is to be determined by a choice being made from among more than one performance, the right to choose belongs to the obligor.

The right to choose under the preceding Article is exercised by manifesting the intention to the counterparty.

The manifestation of intention referred to in the preceding paragraph may not be withdrawn without the consent of the counterparty.

If a claim is due and, notwithstanding a demand by the counterparty specifying a reasonable period of time, the party that holds the right to choose does not exercise the right within that period of time, the right to choose is transferred to the counterparty.

If a third party makes the choice, that choice is made by manifesting intention to either the obligee or the obligor.

In the case prescribed in the preceding paragraph, if the third party is unable to make the choice or has no intention to make the choice, the right to choose is transferred to the obligor.

If a performance included in the subject of a claim is impossible, and the impossibility is by negligence of the party that has the right to choose, the claim exists to the extent of the remaining performances.

The choice becomes effective retroactively on the time of the accrual of the claim; provided, however, that this may not prejudice the rights of a third party.

If a fixed due date is assigned to the performance of an obligation, the obligor is liable for delay from the time that due date arrives.

If an uncertain due date is assigned to the performance of an obligation, the obligor is liable for delay from the time when the obligor receives the request for performance after the due date arrives or the time when the obligor becomes aware of the arrival of that due date, whichever comes earlier.

If no time limit is assigned to the performance of an obligation, the obligor is liable for delay from the time the obligor receives the request for performance.

If the performance of an obligation is impossible in light of the contract or other sources of claims and common sense trading practices in the transaction, the obligee may not request the performance of the obligation.

The impossibility of the performance of an obligation based on a contract on the time of the formation of the contract does not preclude claiming compensation for damage that arises from the impossibility of the obligation pursuant to the provisions of Article 415.

If the obligee refuses, or is unable, to accept the tender of the performance of an obligation, and the subject of the obligation is the delivery of a specific thing, it is sufficient for the obligor to retain the thing by exercising care identical to that the obligor exercises for the obligor's own property, during the period from the time of the tender of the performance until the delivery of the thing.

If the obligee's refusal or inability to accept the performance of an obligation results in increasing the expenses for the performance, the amount of increase is borne by the obligee.

If the performance of an obligation becomes impossible due to grounds not attributable to either party during a period in which the obligor is liable for delay in performance of the obligation, the impossibility of performance is deemed to be due to grounds attributable to the obligor.

If the obligee refuses or is unable to accept the performance of an obligation, and the performance of the obligation becomes impossible due to grounds not attributable to either party after the obligor's tender of the performance, the impossibility of performance is deemed to be due to grounds attributable to the obligee.

If an obligor voluntarily fails to perform an obligation, the obligee may request the court to enforce the obligor to perform through methods such as direct enforcement, enforcement by substitution, or indirect enforcement, in accordance with the provisions of the Civil Enforcement Act and other laws and regulations concerning the procedure for enforcement; provided, however, that this does not apply if the nature of the obligation does not permit the enforcement.

The provisions of the preceding paragraph do not preclude claiming damages.

If an obligor fails to perform consistent with the main purport of the obligation or the performance of an obligation is impossible, the obligee may claim compensation for damage arising from the failure; provided, however, that this does not apply if the failure to perform the obligation is due to grounds not attributable to the obligor in light of the contract or other sources of obligation and common sense trading practices.

If the obligee is entitled to claim for damages pursuant to the provisions of the preceding paragraph, and any of the following cases applies, the obligee may claim for damages in lieu of the performance of the obligation:

the performance of the obligation is impossible;

the obligor manifests the intention to refuse to perform the obligation; or

the obligation has arisen from a contract, and the contract is cancelled or the obligee acquires the right to cancel the contract on the ground of the obligor's failure to perform the obligation.

The purpose of the claim for damages for failure to perform an obligation is to have the obligor to pay the compensation for damage which would ordinarily arise from the failure.

The obligee may also claim the compensation for damage which has arisen from any special circumstances if the party did foresee, or should have foreseen, the circumstances.

Unless a particular intention is manifested, the amount of the damages is determined with reference to monetary value.

In the case of determining the amount of damages in relation to profits to be acquired in the future and deducting an amount equivalent to interest that is to accrue until the time of acquiring the profits, the deduction is made by applying the statutory interest rate applicable on the time when the claim for damages arises.

The preceding paragraph also applies in the case of determining the amount of damages to cover expenses to be incurred in the future and deducting an amount equivalent to interest that is to accrue until the time of incurring the expenses.

If the obligee is negligent regarding the failure to perform the obligation or the occurrence or spreading of a damage caused by that failure, the court determines the liability for damages and the amount of this by taking these elements into consideration.

The amount of damages for failure to perform an obligation to deliver money is determined with reference to the statutory interest rate on the time when the obligor first assumes the responsibility for the delay; provided, however, that if the agreed-upon interest rate exceeds the statutory interest rate, the agreed-upon interest rate prevails.

The obligee is not required to prove damages with respect to the damages referred to in the preceding paragraph.

The obligor may not raise the defense of force majeure with respect to the damages referred to in paragraph (1).

The parties may agree on the amount of liquidated damages with respect to the failure to perform the obligation.

The agreement on liquidated damages do not preclude the request for performance or the exercise of the cancellation right.

A penalty is presumed to constitute liquidated damages.

The provisions of the preceding Article apply mutatis mutandis if the parties agree in advance to appropriate anything other than money as compensation for damage.

If an obligee receives the full value of a thing or right which is the subject of the claim as damages, the obligor subrogates the obligee to that thing or right by operation of law.