Japan Compliance

Legal Insights for Business Professionals

Ipso Facto Clauses in Japanese Corporate Reorganization: A 1982 Supreme Court Stance on Terminating Title Retention Sales

Ipso Facto Clauses in Japanese Corporate Reorganization: A 1982 Supreme Court Stance on Terminating Title Retention Sales

In many commercial agreements, particularly installment sales or leases, creditors often include "ipso facto clauses" (倒産解除特約 - tōsan kaijo tokuyaku). These contractual provisions allow a party to terminate the agreement or trigger other adverse consequences merely because the other party becomes insolvent, files for insolvency proceedings (like corporate
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