Archive for July, 2017

10 Major Revisions to the Japanese Civil Code
Part Two – Extinguishment of claims

By Shinya Yoshida and Peter Cassidy

   This second part of a series on recently enacted changes to the Japanese Civil Code will look at the extinguishment of claims. The term “extinctive prescription” is often used in English translations of the Code. It describes the civil law’s way of extinguishing a claim after a certain period of time has passed. Other terms used to describe this that readers may be more familiar with include “limitation periods”, “statute of limitations” or “time bars”. Currently, Japan’s Civil Code defines a basic extinctive prescription period of 10 years, but there are a variety of specific provisions applicable to various types of claims that define shorter periods of 1, 2 or 3 years. On top of this, claims related to commercial transactions between businesses are subject to a 5-year extinctive prescription period pursuant to the Commercial Code. The revised Civil Code rearranges these various extinctive prescription periods into two categories and repeals the shorter periods.

   Despite these changes, there has been no change to the basic principles that a claim can still be made after the extinctive prescription period has expired until such time that the debtor invokes the prescription, and that a debtor who acknowledges a debt without invoking extinctive prescription becomes unable to invoke it later. In other words, the expiry of the extinctive prescription period does not automatically extinguish a claim so the debtor must actively invoke the prescription. The ability to set off one debt against a claim that has already passed the extinctive prescription deadline has not been addressed in the revision, so the ability continues to exist. Read the rest of this entry >