Newsletter
KEY PROVISIONS OF THE AMENDMENT TO THE CIVIL CODE BOOK OF OBLIGATIONS
A total of 224 articles of the Book of Obligations of the Civil Code were added, deleted or revised in a recent amendment which will take effect on 5 May 2000. We have separately reported on revisions concerning guaranty contracts, carriage contracts, and contracts for hire of work. The remaining principal revisions are as follows:
Adding provisions governing "reward advertisements for contests" that solicit works of literature or art by paying reward to winners of the contests.
Entitling a person who pays medical expenses for, or incurs additional necessary expenses due to the injury of, an injured person who dies of that injury, to directly seek compensation from the tort-feasor who caused the injury.
Expanding the protection of personal rights under Article 195 from the body, health, reputation and liberty to also include credit, privacy, virginity and other personal interests and familial interests based on parental or spousal relationships. Persons are entitled to claim monetary compensation for non-property damages to these protected personal and familial interests.
Adding provisions governing the product manufacturers' liability: Product manufacturers are liable for injuries caused by the consumption or regular use of their products. To avoid the liability, a product manufacturer must bear the burden of proof to show that the production, manufacture, design or processing of the products was not deficient, that appropriate level of care was taken to avoid the injury. Product producers, manufacturers, processors and importers are all within the definition of the "product manufacturer".”.
Adding provisions governing the ordinary danger liability: Drivers will be liable for injuries caused by the use of automobiles, motorcycles and other moving vehicles which do not relay on rails for movement. In addition, a person who operates an enterprise or undertakes other work or activity is liable for injuries to others by the dangerous character of the person's work or activity or equipment or methods used. Those seeking to escape liability must bear the burden of proof that appropriate level of care was taken to avoid the injury.
Adding the principle of off-setting damages and benefits: When a party suffers damages as well as gains a benefit in the same incident, the amount of the benefit gained must be deducted from the monetary award for the damage.
Adding provisions governing incomplete performance, providing that when an incomplete performance is an endangering performance, the injured party may claim damages other than the pure loss caused by such performance.
Adding the principle of change of circumstances.
When a debtor engaged in fraudulent act which is prejudicial to the rights of the creditor, the amendment allows the creditors to request a court to order a beneficiary or transferee to restore to the condition which existed prior to the happening of the fraudulent act. This right is in addition to the creditor's right of revocation.
Adding provisions regarding negligence prior to entering a contract: When two parties engage themselves in preparations or discussions to enter a contract, and one party causes damages to the other party by dishonestly concealing information, seriously violating the obligation to protect secrets, or otherwise commits a bad-faith act, the party should be liable for the damages of the other party.
Adding provisions on standardized contracts: The terms in the standardized contracts is void if they exempt or lessen the liabilities of the party providing the contract, or increase the liabilities of the other party, or force the other party to abandon or restrict the exercise of his/her rights, and the terms are clearly unfair under the situation.
Allowing parties to state in agreement that their mutual obligations may not be off-set with each other's.
Substantially extending the time limit in which a buyer may rescind a contract or demand a reduction in the sales price of defective goods. These rights will be extinguished if the buyer does not exercise them within six months from the date he/she issues the defect notice pursuant to Article 356, or within five years of receipt of the goods.
Allowing, after the parties having entered into a leasehold agreement with the purpose to construct building upon the land, the lessee to request the lessor to register superficies under the name of the lessee.
Setting exceptions to the principle that transfer of title does not affect the lease on the real estate: The said principle will not apply if the lease agreements are not notarized and whose terms are for more than five years or of unlimited duration.
Adding the following revisions regarding the leasehold contracts: When a party enters into a leasehold contract for constructing a house on the land and afterwards transfers his ownership in the house to a third party, the leasehold contract will continue to exist between the lessor and the transferee of the house. The lessee has the right of refusal when the lessor sells the land; likewise, the lessor has the right of refusal when the lessee sells the house on the land.
Adding the obligation of employers to protect employees.
Adding a title on traveling contracts to specify the legal relationships between tourists and travel agencies.
Adding a provision regarding brokerage contracts, providing that a professional broker is under an obligation of investigation towards the particulars regarding the execution of the contract, the capacity of the parties to perform the contract, and the capacity of the parties to enter into the contract.
Adding provisions on commingled deposit contracts. Commingled deposit means the thing deposited is a thing replaceable, and the ownership of deposited thing does not transfer to the depositary, and the depositary, with the depositor's consent, may commingled the deposited thing for storage with his/her own thing and things deposited by other depositors of the same type and quality. Each depositor should own a share of the commingled deposited thing in proportion of the quantity deposited.
Adding a title on mutual help loan associations to clarify the rights and obligations of the private financial organizations.
Adding a title on employment guarantees.
Reducing the statute of limitation to one year for the right to demand compensation due to the loss, damage or delay of shipped goods. The limitation runs from the completion of the shipment or from when it should have been completed. The statute of limitation for claims against a forwarding agent is also reduced to one year.
The Law Governing the Application of the Book of Obligations of the Civil Code is accordingly amended, specifying the retroactive force of certain amendments in the Book of Obligations of the Civil Code.