When your business purchases goods from a supplier in Japan and those goods subsequently turn out to be defective, of the wrong type, or in insufficient quantity, this naturally leads to the question of remedies. Under the significantly amended Japanese Civil Code, effective April 1, 2020, which revamped the seller's liability for such issues into a framework of "non-conformity with the contract" (keiyaku futekigō; 契約不適合), one of the primary rights afforded to the buyer is the right to demand that the seller "cure" the non-conformity. This "right to demand cure," known as tsuikan seikyū-ken (追完請求権), is a cornerstone of the new system and provides buyers with proactive options to obtain the performance they originally bargained for.

The Foundation: Non-Conformity with the Contract

Before delving into the right to demand cure, it's essential to recall that this remedy, along with others, is triggered when the delivered goods "do not conform to the contract with respect to their kind, quality, or quantity" (Article 562, Paragraph 1 of the amended Civil Code). This means:

• Non-conformity as to Kind: The seller delivered goods different from what was agreed (e.g., a different model of machinery, goods made of a different material than specified).
• Non-conformity as to Quality: The goods have defects in materials or workmanship, do not perform according to agreed specifications, lack agreed-upon characteristics, or are not fit for their ordinary or particular agreed purpose. For instance, a newly constructed building (a common subject of sales in real estate contexts) with a leaky roof or improperly functioning doors would exhibit non-conformity as to quality.
• Non-conformity as to Quantity: The seller delivered fewer goods than stipulated in the contract (e.g., 80 units instead of 100).

If such non-conformity exists, the buyer can generally turn to the remedies provided by the Civil Code, with the right to demand cure often being the first port of call.

The Buyer's Right to Demand Cure (Article 562)

Article 562, Paragraph 1, first part, explicitly grants the buyer the right to demand that the seller rectify the non-conformity. The buyer has the initial choice among the following methods of cure:

1. Repair of the Goods (Shūho; 修補): The buyer can demand that the seller repair the defective goods to bring them into conformity with the contract. This is often relevant for machinery, equipment, or real property.
2. Delivery of Substitute Conforming Goods (Daitaibutsu no Hikiwatashi; 代替物の引渡し): If repair is not feasible or desired, or if the goods are fungible, the buyer can demand that the seller deliver replacement goods that do conform to the contract.
3. Delivery of any Missing Quantity (Fusokubun no Hikiwatashi; 不足分の引渡し): In cases of a shortfall in quantity, the buyer can demand that the seller deliver the missing items.

The introduction of this explicit and broad right to demand cure is a significant development. Under the old Civil Code's "defect warranty" (kashi tanpo sekinin) provisions, a buyer's right to demand repair (especially for specific, non-fungible goods) was not always clear and was a subject of considerable academic debate, often depending on whether one adopted a "statutory liability theory" or a "contractual liability theory" for defect liability. The amended Civil Code, by firmly grounding the seller's liability for non-conformity in principles of contractual breach, logically establishes the right to demand cure (i.e., proper performance of the contract) as a fundamental remedy for the buyer.

The Seller's Option: Choosing an Alternative Method of Cure

While the buyer has the initial choice of how the non-conformity should be cured, the seller is not always strictly bound by that choice. The proviso to Article 562, Paragraph 1, states: "However, the seller may perform cure by a method different from that demanded by the buyer if said method does not impose an unreasonable burden on the buyer."

This provision seeks to strike a balance. It respects the buyer's primary interest in receiving conforming goods but also protects the seller from being forced to undertake a method of cure that is disproportionately expensive or difficult if a more reasonable, yet still effective, alternative exists from the seller's perspective.

For example, if a complex piece of machinery has a minor, easily replaceable component that is defective, and the buyer demands a complete replacement of the entire machine (which would be extremely costly for the seller), the seller might be justified in opting to repair the machine by replacing the faulty component, provided this fully remedies the defect and does not cause undue delay or inconvenience to the buyer. The legal commentary suggests a scenario where a building has a leaky roof easily fixable by simple repairs, but the buyer demands a complete rebuild (as a "substitute"); in such a case, the seller would likely be entitled to choose repair.

The crucial determinant is whether the seller's proposed alternative method imposes an "unreasonable burden" (fusōtō na futan) on the buyer. What constitutes an "unreasonable burden" will depend on the specific circumstances of each case, including:

• The nature and extent of the non-conformity.
• The difference in cost, time, and complexity between the buyer's demanded method and the seller's proposed alternative.
• The impact of the alternative method on the buyer's ability to use the goods as intended or any disruption it might cause to the buyer's operations.
• Any specific contractual agreements regarding methods of cure.

If the seller's chosen alternative method would significantly disadvantage the buyer (e.g., take much longer, provide a less durable solution, or interfere more substantially with the buyer's use), then it would likely be considered an unreasonable burden, and the buyer could insist on their originally demanded method (or pursue other remedies).

When Cure Cannot Be Demanded: Non-Conformity Due to Buyer's Fault

A key limitation on the buyer's right to demand cure is found in Article 562, Paragraph 2: "If the non-conformity... is due to a cause attributable to the buyer, the buyer may not make a demand for performance of cure under the provisions of the preceding paragraph."

This means that if the defect or problem with the goods arose because of the buyer's own actions—such as misuse, improper handling, unauthorized modifications, or failure to follow operating instructions—the buyer cannot then turn around and demand that the seller repair or replace the goods at the seller's expense under this provision. In such cases, the responsibility for rectifying the issue lies with the buyer.

Interplay with Other Buyer's Remedies

The right to demand cure is a primary remedy, but it does not exist in isolation. It interacts with other remedies available to the buyer for non-conformity:

• Prerequisite for Price Reduction: As detailed in Article 563, a buyer wishing to claim a price reduction for non-conforming goods must generally first demand that the seller cure the non-conformity within a reasonable period. Only if the seller fails to do so (or if cure is impossible, definitively refused, etc.) does the right to demand a price reduction typically arise.
• Damages and Termination Not Precluded (Article 564): Successfully obtaining (or unsuccessfully demanding) cure does not prevent the buyer from also claiming monetary damages for any losses incurred due to the initial non-conformity or delays in curing it. Similarly, if the cure is ultimately unsuccessful, or if the non-conformity is fundamental, the buyer may still be entitled to terminate the contract according to the general rules on termination (Articles 541 and 542). The commentary raises a valid point about whether a buyer, having chosen the path of demanding cure, becomes locked into that remedy or can flexibly switch to other remedies if the cure process is unsatisfactory or if the seller’s chosen alternative cure is unacceptable to the buyer. While Article 564 generally preserves the availability of damages and termination, the exact sequencing and conditions under which a buyer can pivot from a cure demand to other remedies will likely depend on the specifics of the seller's response and the overall circumstances.

Practical Steps for Buyers and Sellers

For Buyers:

• Thorough Inspection: Upon receipt of goods, conduct a prompt and thorough inspection to identify any potential non-conformities.
• Timely Notification: While the one-year notification rule under Article 566 (for defects in kind or quality) is for preserving all remedies, it is good practice to notify the seller of any non-conformity and the desired method of cure as soon as reasonably possible.
• Specify Preferred Cure: Clearly communicate to the seller the non-conformity found and which method of cure (repair, replacement, or completion) is being demanded.
• Allow Reasonable Time: If the seller agrees to cure, provide them with a reasonable period to complete it. What constitutes "reasonable" will vary depending on the nature of the goods and the cure required.

For Sellers:

• Assess the Claim: When a buyer demands cure, carefully assess whether a non-conformity for which you are responsible indeed exists.
• Consider Alternative Cure Methods: If the buyer's demanded method of cure seems disproportionately burdensome, evaluate whether a less onerous but equally effective alternative exists that would not place an unreasonable burden on the buyer. Communicate this proposed alternative clearly.
• Perform Cure Diligently: If cure is undertaken, it should be performed properly and within a reasonable timeframe to mitigate further potential claims from the buyer.
• Investigate Buyer's Contribution: If there is reason to believe the non-conformity was caused by the buyer's actions or omissions, investigate this thoroughly, as it may provide a defense against the demand for cure.

Conclusion

The buyer's statutory right to demand cure under Article 562 of the amended Japanese Civil Code is a powerful and central remedy when dealing with non-conforming goods from Japanese suppliers. It empowers buyers to actively seek the performance they contracted for—whether through repair, replacement, or the delivery of missing quantities. While the seller has some leeway to propose an alternative method of cure under specific circumstances, the primary focus is on ensuring the buyer ultimately receives goods that meet the contractual requirements. This right, coupled with the possibilities of price reduction, damages, and termination, provides a comprehensive toolkit for buyers facing issues of non-conformity in Japanese commercial sales transactions, reflecting a modernized approach that prioritizes the fulfillment of contractual expectations.