Regulation of Contracts According to ‘Public Policy or Good Morals’ in Japan: Focusing on the Relationship Between the General Provision in the Civil Code and the Fundamental Rights in the Constitution

Abstract

Article 90 of the Japanese Civil Code provides that, ‘A juristic act with any purpose which is against public policy or good morals is void.’ Contract is one of the components of these ‘juristic acts’. Any contract or any term of a contract may thus be totally or partially void if it is deemed to be ‘against public policy or good morals.’ This provision is one of the main tools by which unfair contracts or unfair terms are regulated. However, it is inherently a general provision, the application of which is subject to judicial discretion. A lack of clarity hence remains in setting the scope and criteria for such application. In addition, public policy or good morals is considered to be an exceptional tool by which to intervene in the areas of private autonomy or freedom of contract to accomplish contractual justice. Some sort of justification or reasoning for its application is thus required, examples of which may include constitutional values such as Human rights.