Japan Business Law Examination flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Arrival rule for acceptance

Under Civil Code Art. 522, acceptance of an offer becomes effective when the notice reaches the offeror, not when dispatched, unless the offer specifies otherwise.

Statute of limitations period

Ordinary civil claims expire 5 years after the creditor knew of the right and debtor, or 10 years from the right's occurrence, whichever is earlier.

Employer tort liability

Civil Code Art. 715 makes an employer liable for harm an employee causes in the course of employment, unless the employer proves reasonable care in selection and supervision.

Risk of loss in sales

Under Civil Code Art. 567, risk of loss passes to the buyer when the object is delivered; before delivery the seller bears the risk.

Set-off requirements

Set-off under Civil Code Arts. 505-506 requires both claims to be due and of the same kind, and takes effect when notice reaches the other party.

Business judgment rule

Japanese courts defer to directors' business decisions where they were informed, rationally deliberated, and free of conflict of interest, as in the 1989 Tokyo High Court decision.

Shareholder derivative suit

A shareholder holding shares for six months may demand the company sue a director; if the company does not act within 60 days, the shareholder may sue directly.

Directors' duty of loyalty

Companies Act Art. 355 requires directors to act in the company's interest; breach supports liability to the company under Art. 423(1).

Special resolution threshold

Companies Act Art. 309(2) requires a special resolution for mergers and similar fundamental changes: two-thirds of voting rights present at a meeting with a quorum.

36 agreement

A written labor-management agreement filed with the Labor Standards Inspection Office under Labor Standards Act Art. 36 is required before an employer may order overtime work.

Dismissal validity standard

Labor Contract Act Art. 16 voids a dismissal lacking objective reasonableness and social acceptability; the employer bears the burden of proving both.

Fixed-term contract conversion

Labor Contract Act Art. 18 lets an employee convert a repeatedly renewed fixed-term contract to an indefinite term after five years of total service.

Overtime premium rates

Hours beyond 8 daily or 40 weekly earn a 25% premium; statutory holiday work earns 35%; night work between 10pm and 5am adds 25%.

Patent term

Patent Act Art. 67 grants a patent for 20 years from the filing date, provided the invention is novel, inventive, and industrially applicable.

Trademark term and renewal

Trademark Act Arts. 19 and 21 set a 10-year term from registration that may be renewed indefinitely, provided the mark remains distinctive and in use.

Trade secret requirements

Under Unfair Competition Prevention Act Art. 2(6), a trade secret must be secret, not publicly known, and subject to reasonable protective measures.

Copyright duration

Copyright Act Art. 51 protects works for 70 years after the author's death; protection arises automatically on creation without registration.

Leniency program

Antimonopoly Act Art. 7-2(10) grants the first cartel reporter full immunity, the second a 50% reduction, and the third a 30% reduction.

Surcharge rate

Antimonopoly Act Art. 7-2 imposes a surcharge of 10% of sales on manufacturers and 3% on retailers involved in cartels.

Merger notification threshold

Antimonopoly Act Art. 15-2 requires notification where combined domestic sales exceed ¥20 billion and the acquired company's exceed ¥5 billion.

Abuse of superior position

Antimonopoly Act Art. 2(9) lists abuse of a superior bargaining position as an unfair trade practice, covering unjust demands on dependent counterparties.

Product liability defect

Product Liability Act Art. 2(2) defines a defect as a lack of safety the product should ordinarily provide, considering its nature, foreseeable use, and delivery time.

PL Act limitation period

Product Liability Act Art. 5 bars claims three years after the victim knows of the damage and manufacturer, or ten years after delivery.

Cooling-off period

Consumer Contract Act Art. 4 lets consumers cancel certain door-to-door and telemarketing contracts within eight days of receiving the statutory disclosure document.

Small claims procedure

Code of Civil Procedure Art. 368 provides a simplified procedure for monetary claims up to ¥600,000, decided in a single hearing with limited appeal.

In-court settlement effect

Code of Civil Procedure Art. 267 gives a settlement recorded in court the same effect as a final judgment and makes it directly enforceable.

ADR limitation suspension

ADR Act Art. 5 suspends the statute of limitations for 30 days when a party initiates certified alternative dispute resolution proceedings.

Arbitral award enforcement

Arbitration Act Art. 46 makes awards final and binding; enforcement in Japan requires a court execution decision, and the New York Convention applies.

Labor tribunal procedure

The Labor Tribunal Procedure Act resolves individual labor disputes in up to three sessions before a panel of one judge and two lay members.

Civil rehabilitation stay

Civil Rehabilitation Act Art. 27 stays enforcement against the debtor during proceedings, while secured creditors retain their rights outside the plan.

Avoidance power

Bankruptcy Act Art. 160 lets a trustee void transactions made within six months before insolvency that prejudice creditors, restoring assets to the estate.

Consumption tax rate

The standard consumption tax rate is 10%, with a reduced 8% rate for food and newspapers; the qualified invoice system began in October 2023.