Consultations on Consumer Contracts, Terms of Use, and the Act on Specified Commercial Transactions
(i) Consumer Contracts and Terms of Use
When doing B2C business, it is necessary to conclude contracts with consumers subject to the unfair terms rule under the Consumer Contract Act. In recent years, B2C e-commerce has developed rapidly with the proliferation of SNS and smartphones. It is essential to create terms of use for e-commerce, and in doing so, the standard terms of contract rule under the Civil Code as well as the unfair terms rule under the Consumer Contract Act will apply.
If a contract includes clauses that are likely to be void in a civil case based on those rules, not only might such clauses be unenforceable in individual disputes, etc., but the company might also be subject to injunctive demands or lawsuits from qualified consumer organizations. The said injunctive demands or lawsuits from qualified consumer organizations will be generally released publicly and also organized centrally on the website of the Consumer Affairs Agency (Consumer Organization Collective Litigation System (COCoLiS) portal site) which may affect the reputation of the company itself.
Our firm has thorough knowledge regarding the standard terms of contract rule under the Civil Code as well as the unfair terms rule under the Consumer Contract Act, and we have amassed deep practical knowledge through abundant experience reviewing the terms of use for B2C e-commerce platforms and dealing with injunctive demands and lawsuits from qualified consumer organizations. Based on this experience, our firm can provide appropriate support when preparing proper consumer-facing contracts and terms of use.
In connection with the above, lawyers at our firm authored the following books: "The Basics and Practice of General Terms and Conditions" (Shojihomu Co., Ltd., 2020), and "B2C E-commerce Practices" (Shojihomu Co., Ltd., 2020). In addition, a lawyer at our firm co-authored a book titled "Clause-by-clause Commentaries on the Consumer Contract Act" with an official of the Consumer Affairs Agency during his tenure at the agency as a fixed official.
(ii) The Act on Specified Commercial Transactions
The Act on Specified Commercial Transactions defines seven types of transactions including door-to-door sales, telemarketing sales, mail order sales and door-to-door purchases, which are explicitly designated as "Specified Commercial Transactions" under the said law, and, for each type of transaction, it organizes them into the three general categories of penalties for violation of prohibited acts (i.e., administrative penalties (administrative regulations), penalties (criminal regulations) and civil effects (civil rules)). In practice, there are cases where it is not clear at first glance whether or not a transaction falls under any of the above categories and, if so, what action should be taken. Our firm can provide appropriate advice by considering the notice published by the Consumer Affairs Agency and the clause-by-clause commentaries on a case-by-case basis.