Contractual crisis and the doctrine of change of circumstances: the results and contexts of the reform of contract law in Japan

Japanese civil law, as in law elsewhere addresses the remedies available if a major natural disaster or military conflict, unforeseen at the time a contract is concluded, creates a crisis before the contract is fulfilled. The concepts of force majeure and “act of God” might seem to cover such situations but application and remedy can be disputed. In Japan, in case force majeure or other legal doctrines cannot be applicable, the ultima ratio for obligors seeking relief from their contractual obligations due to unforeseen events is the “doctrine of change of circumstances” although it is applicable only in extremely unusual situations. This chapter explores this doctrine and related concepts such as “good faith” in order to understand how they are used in crisis and may be used as the basis for preparing for managing a crisis.