Q&A: The "Right to Simultaneously Perform" (Doji Riko no Kobenken): A Unique Defense in Japanese Contract Disputes?

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

In any bilateral contract—where both parties exchange promises to perform—a fundamental concern for each party is the assurance that they will receive the other's promised performance when they render their own. What happens if one party is sued for failing to perform, but they were holding back precisely because the suing party hadn't performed their part? Japanese contract law addresses this through a significant legal mechanism known as the "Right to Simultaneously Perform" (同時履行の抗弁権 - dōji rikō no kōbenken). This doctrine, while having conceptual parallels in other legal systems, possesses distinct features in its application and procedural consequences in Japan.

Q1: What is the "Right to Simultaneously Perform" (Dōji Rikō no Kōbenken) in Japanese Contract Law?

The Right to Simultaneously Perform, or dōji rikō no kōbenken, is a defense provided by Article 533 of the Japanese Civil Code. It stipulates that a party to a bilateral contract may refuse to perform their own obligation until the other party tenders performance of their corresponding obligation. However, this right does not apply if the other party's obligation is not yet due.

Underlying Principle (牽連性 - Kenrensei):
The core idea behind this right is the inherent correlativity or interdependence (牽連性 - kenrensei) of obligations in a bilateral contract. Each party's promise is, in essence, the consideration for the other's promise. The kōbenken aims to maintain fairness in this exchange by ensuring that a party is not forced to perform their obligation (and thus part with value) without a concurrent tender of performance from the counterparty. It prevents one party from bearing the entire risk of the other's potential non-performance.

Dual Functions:
The dōji rikō no kōbenken serves two primary functions:

  1. Defensive Function: It protects a party by allowing them to legitimately withhold their own performance if the other side has not yet performed or tendered performance. This shields them from being in breach for their non-performance.
  2. Coercive/Incentive Function: By allowing a party to withhold performance, it incentivizes the other party to tender their own performance to secure the desired counter-performance. It acts as a practical tool to encourage mutual and concurrent fulfillment of contractual duties.

Q2: Under what circumstances can this right be asserted in Japan?

The Right to Simultaneously Perform is typically asserted in two main contexts:

  1. As a Defense Against a Claim for Performance:
    If party A sues party B for performance under a bilateral contract (e.g., a seller suing a buyer for payment of the purchase price), party B can raise the dōji rikō no kōbenken as a defense. B's assertion would be that they are ready and willing to perform (e.g., pay the price) but only upon A's concurrent performance (e.g., delivery of the goods).
    This defense is not available if B's obligation is expressly or implicitly due before A's obligation, for example, if there was an agreement for B to perform first (先履行の合意 - senrikō no gōi). The proviso to Article 533 of the Civil Code clarifies that the right cannot be asserted if the counterparty's obligation is not yet due.
  2. As a Justification for Non-Performance (Against Claims for Delay or Termination):
    A party who possesses the dōji rikō no kōbenken is generally not considered to be in default (i.e., not in culpable delay) for failing to perform their obligation, as long as the other party has not performed or tendered their counter-performance. Consequently, this right can serve as a valid defense if the other party claims damages for delay or attempts to terminate the contract due to the first party's non-performance.
    According to prevailing legal theory in Japan (often termed the "existence effect theory" or 存在効果説 - sonzai kōka setsu), if party A (e.g., buyer) sues party B (e.g., seller) for damages due to B's delay in performance, A must typically prove not only B's failure to perform on time but also that A themselves tendered their own counter-performance (e.g., payment). If A failed to tender their performance, B's non-performance is justified by their dōji rikō no kōbenken, and thus B is not in culpable delay.

Q3: What happens in a Japanese court if the "Right to Simultaneously Perform" is successfully raised as a defense?

A distinctive feature of Japanese civil procedure is how courts handle a successful assertion of the dōji rikō no kōbenken when a plaintiff sues for performance:

  • "Judgment for Exchange Performance" (引換給付判決 - Hikikae Kyūfu Hanketsu):
    The court will not simply dismiss the plaintiff's claim for performance if the defendant validly asserts the dōji rikō no kōbenken. Instead, the court will typically issue a "judgment for exchange performance". This type of judgment orders the defendant to render their performance in exchange for (or, upon receipt of) the plaintiff's counter-performance. For example, "The defendant shall pay the plaintiff ¥1,000,000 upon the plaintiff's delivery of X goods to the defendant."
  • Enforcement of the Judgment:
    The party who obtains such a judgment (the plaintiff/creditor) faces specific requirements for its enforcement. Under Article 31, Paragraph 1 of the Civil Execution Act, compulsory execution based on a judgment for exchange performance can generally only be commenced if the creditor (the plaintiff) proves to the execution court that they have performed their own counter-obligation or have duly tendered such performance.
    This procedural rule has a significant practical effect: to actually enforce the judgment and compel the defendant's performance (e.g., to seize assets for the owed sum), the plaintiff often has to take the step of performing their part first or making a formal, verifiable tender of performance. This reinforces the concurrent nature of the exchange even at the enforcement stage.

Q4: Does this right apply only to the primary obligations of a bilateral contract, or can it be extended to other situations?

The principle of fairness underlying the dōji rikō no kōbenken is not confined strictly to the initially agreed primary performances. Japanese law extends its application to various other situations, either by specific statutory provisions or through judicial interpretation:

  • Statutory Extensions:
    • Obligations upon Contract Termination: When a contract is terminated (e.g., due to breach), the mutual obligations of the parties to restore each other to their original pre-contractual positions (原状回復義務 - genjō kaifuku gimu) are subject to the right of simultaneous performance (Civil Code, Article 546).
    • Debtor's Right to a Receipt: A debtor tendering payment is entitled to demand a receipt from the creditor, and these are considered simultaneous obligations (Civil Code, Article 486).
  • Judicial/Interpretive Extensions (同時履行の抗弁権の拡張 - dōji rikō no kōbenken no kakuchō):
    Courts have applied the principle of simultaneous performance by analogy to situations not explicitly covered by statute where fairness dictates a similar balancing of interests. Examples include:
    • Mutual restitution obligations in unjust enrichment cases following the avoidance or invalidation of a contract.
    • In land lease scenarios, where a lessee exercises a statutory right to demand that the landowner purchase a building constructed by the lessee on the land at the end of the lease term, the lessee's obligation to surrender the land and the landowner's obligation to pay the building's price are often treated as being in a simultaneous performance relationship.
  • Application to Damages in Lieu of Performance or Subsequent Completion:
    The scope of Article 533 expressly includes "performance of an obligation to compensate for damage in lieu of the original obligation". This means:
    • If a seller is obligated to deliver goods but the goods are destroyed due to the seller's fault, the seller's obligation to pay damages in lieu of delivery and the buyer's obligation to pay the purchase price are in a simultaneous performance relationship.
    • Similarly, in contracts for work or sales, if the delivered goods or completed work are non-conforming, the obligation of the buyer/commissioning party to pay the price is in a simultaneous performance relationship with the seller/contractor's obligation to provide subsequent completion (修補 - shūho or 追完 - tsuikan, e.g., repair or replacement) or to pay damages in lieu of such completion.
    • A particularly important development in Japanese case law (e.g., Supreme Court, February 14, 1997, Minshū Vol. 51, No. 2, p. 337, concerning a construction contract) is the recognition that the claim for the remaining contract price and the claim for damages in lieu of repair of defects are, "as a whole" (全体として - zentai to shite), in a simultaneous performance relationship. This allows the party receiving the defective performance (e.g., the buyer or the party commissioning work) to withhold the entire outstanding price—not just an amount equivalent to their damages—until the defect is rectified or compensated, without being deemed in default for the price payment. This is subject to the principle of good faith, preventing abuse of this right if the non-conformity is trivial relative to the outstanding price. This "as a whole" approach provides strong leverage to the aggrieved party.
    • This principle also impacts set-off (相殺 - sōsai). For instance, if the commissioning party offsets their damages claim against the contractor's remuneration claim, they are only considered in delay for the net remaining balance of the remuneration from the day after the offset is declared, because their withholding of the full amount up to that point was justified by the kōbenken. Conversely, the contractor (or seller) generally cannot initiate a set-off of their price claim against the commissioning party's (or buyer's) damages claim if doing so would unilaterally deprive the latter of their right to assert simultaneous performance for the entire price. This reasoning also applies to sales contracts involving non-conforming goods.

Q5: How does the Japanese Dōji Rikō no Kōbenken compare to concepts in U.S. contract law, like "constructive conditions of exchange"?

While the terminology and some procedural aspects differ, the underlying function of the dōji rikō no kōbenken has strong parallels with the doctrine of "constructive conditions of exchange" in U.S. common law and the Uniform Commercial Code (UCC).

  • U.S. Law - Constructive Conditions of Exchange:
    In U.S. contract law, particularly for bilateral contracts where performances can be rendered more or less simultaneously (e.g., payment for goods upon delivery), courts often imply "constructive conditions of exchange." This means that each party's duty to perform is implicitly conditioned upon the other party performing or tendering performance of their respective duty. If one party does not perform or tender, the other party's duty to perform typically does not arise, and they are not in breach for their non-performance.
  • Similarities:
    • Core Purpose: Both the Japanese kōbenken and U.S. constructive conditions aim to protect a party from having to perform their side of a bilateral contract without receiving, or at least being tendered, the agreed-upon counter-performance. They both reflect the fundamental interdependence of promises in such agreements and promote fairness in the exchange.
    • Defensive Effect: Both can operate as a defense against a claim for breach of contract if the party asserting the defense was not tendered the required counter-performance. The party who has not received a tender is not obliged to perform.
  • Differences:
    • Nature of the Right/Condition: The Japanese concept is framed as an "affirmative right" or "defense" (kōbenken) explicitly granted by statute. U.S. constructive conditions are largely a judicial construct—conditions "implied-in-law" by courts to achieve justice, though the UCC has codified similar concepts for sales of goods (e.g., UCC §2-507(1) makes seller's tender of delivery a condition to buyer's duty to accept and pay; UCC §2-511(1) makes buyer's tender of payment a condition to seller's duty to tender and complete delivery).
    • Procedural Outcome of Assertion: A key practical difference lies in the typical judgment. A successful assertion of dōji rikō no kōbenken in Japan often results in a "judgment for exchange performance" (hikikae kyūfu hanketsu), which orders performance upon counter-performance. In the U.S., if a plaintiff fails to prove they met a constructive condition (e.g., tendered performance), their claim for breach might simply be dismissed, or the court might condition relief on concurrent performance, but the specific "exchange judgment" as a formal category with direct ties to execution rules (like Civil Execution Act Art. 31(1) ) is more characteristic of Japanese procedure.
    • "As a Whole" Application for Defects: The specific Japanese judicial development allowing a party to withhold the entire remaining price against a claim for damages for non-conformity (subject to good faith), pending full remedy, is a particularly strong application of the principle, offering significant leverage. While U.S. buyers under the UCC might have rights to deduct damages from the price (UCC §2-717), the Japanese "as a whole" simultaneous performance concept for price versus defect damages has its own distinct judicial articulation.
    • Explicit Codification: The dōji rikō no kōbenken is a clearly codified right in the Japanese Civil Code, providing a direct statutory basis. U.S. constructive conditions, outside the UCC for sales, are more a creature of common law.

Conclusion

The "Right to Simultaneously Perform" (dōji rikō no kōbenken) is a cornerstone of bilateral contract enforcement in Japan. It serves as a crucial shield for a performing party, ensuring they are not unfairly prejudiced by having to perform without a concurrent tender from their counterparty. Its application extends beyond primary contractual obligations to encompass related duties arising from contract termination, claims for damages in lieu of performance, and even claims related to subsequent completion of defective performance. While conceptually akin to the U.S. doctrine of constructive conditions of exchange in its aim to ensure fairness in reciprocal obligations, the dōji rikō no kōbenken has unique procedural implications, such as the "judgment for exchange performance," and specific judicially developed extensions, particularly the "as a whole" application in cases of defective performance. Understanding this right is essential for navigating contract performance and disputes under Japanese law.