Simultaneous Performance (Doji Riko no Kobenken) in Japanese Contracts: How Does it Work as a Defense?

In the realm of bilateral contracts—where each party's promise is given in exchange for the other's—the ideal scenario is a concurrent exchange of performances. But what happens if one party demands performance from the other without offering, or being ready to offer, their own due performance? Japanese contract law provides a crucial mechanism to ensure fairness in such situations: the "defense of simultaneous performance" (doji rikō no kōbenken - 同時履行の抗弁権), primarily governed by Article 533 of the Civil Code (Minpō). This defense allows a party to temporarily refuse to perform their own obligation until the demanding party tenders their reciprocal obligation, thereby upholding the inherent reciprocity of bilateral agreements.

The Rationale: Ensuring Fairness and Reciprocity in Bilateral Contracts

Bilateral contracts (sōmu keiyaku - 双務契約), such as sales agreements, lease agreements, or contracts for services, are founded on the principle of mutual exchange. Each party's obligation is typically undertaken in consideration of, and is dependent upon, the other party's corresponding obligation. This interrelation of performances is referred to as kenrensei (牽連性) or interconnectedness.

The defense of simultaneous performance is designed to protect this fundamental reciprocity. It prevents a situation where one party is compelled to perform their part of the bargain while facing the risk that the other party may not fulfill their counter-obligation. By allowing a party to withhold their performance until the other tenders theirs, the defense safeguards against unjust enrichment and maintains the equilibrium of the contractual exchange. It essentially says, "I will perform when you perform (or tender performance)."

The Defense of Simultaneous Performance: Civil Code Article 533

Article 533, paragraph 1 of the Japanese Civil Code stipulates:
"A party to a bilateral contract may refuse to perform his/her own obligation until the other party tenders performance of his/her obligation; provided, however, that this shall not apply if the other party's obligation is not yet due."

Nature of the Defense:
The doji rikō no kōbenken is what is known as a "dilatory defense" (enki-teki kōben - 延期的抗弁). This means it does not extinguish the underlying obligation itself but rather allows the party asserting it to temporarily suspend or refuse their performance. The obligation remains, but its enforceability is conditioned upon the other party's readiness to perform.

Requirements for Invoking the Defense of Simultaneous Performance

For a party to successfully invoke this defense, several conditions must typically be met:

1. Existence of a Single Bilateral Contract: The core requirement is that both the defendant's obligation and the plaintiff's counter-obligation must arise from the same bilateral contract. The performances must be reciprocally linked as part of a single transactional exchange.
2. Both Obligations Must Be Due for Performance (Rikōki - 履行期):
   • The obligation of the party asserting the defense (the defendant) must be due.
   • Crucially, the counter-obligation of the party demanding performance (the plaintiff) must also be due. If the plaintiff's obligation has not yet matured (e.g., if the contract stipulates that the defendant is to perform first – a "prior performance obligation" - saki rikō gimu - 先履行義務), then the defendant cannot rely on this defense to refuse their own due performance. The proviso to Article 533(1) makes this clear.
3. The Demanding Party Has Not Performed or Tendered Their Counter-Performance:
   The defense is available when the party demanding performance has neither actually performed their own reciprocal obligation nor made a valid "tender of performance" (rikō no teikyō - 履行の提供).
   • Valid Tender: A tender of performance, to defeat the defense, must be in accordance with the "main purpose of the obligation" (sa무 no honshi ni shitagatta rikō no teikyō - 債務の本旨に従った履行の提供), as required by Article 493 of the Civil Code. This means the tender must be complete and conforming to the contract terms.
     • Insufficient Tender in Divisible Obligations: If the plaintiff's obligation is divisible (e.g., delivery of a quantity of goods) and they tender only a substantially insufficient portion, the defendant may still be able to assert the defense against the entirety of their counter-obligation, or at least proportionally, unless the shortfall is trivial and refusing performance would be contrary to good faith.
     • Defective Performance (Incomplete Performance - Fukanzen Rikō - 不完全履行): If the plaintiff tenders a defective performance, the defendant can generally raise the defense of simultaneous performance until a conforming tender (e.g., cure of the defect) is made, unless the defect is extremely minor and asserting the defense would be an abuse of rights.
   • Continuity of Tender (Teikyō no Keizokusai - 提供の継続性): A debated point is whether a one-time tender by the plaintiff, even if initially valid but perhaps subsequently withdrawn or no longer practically available, is sufficient to permanently defeat the defendant's right to assert the defense. Japanese case law and prevailing scholarly opinion generally lean towards requiring an element of continuity or sustained readiness to perform on the part of the plaintiff. If the plaintiff makes a demand for performance without a concurrent and continuing ability and willingness to perform their own part, the defendant may still be able to invoke the defense. This ensures that the reciprocity is maintained throughout the performance exchange.
   • Anticipatory Refusal by Defendant: If the defendant has clearly and unequivocally indicated that they will refuse to accept the plaintiff's performance even if tendered, the plaintiff may be excused from making a formal, literal tender.

Consequences of Successfully Raising the Defense in Litigation

If a defendant successfully raises the defense of simultaneous performance in response to a claim for performance:

1. Not an Outright Dismissal of the Claim: The plaintiff's claim is not entirely dismissed. The defendant's obligation to perform is acknowledged, but its immediate enforceability is conditioned.
2. Judgment for Performance in Exchange (Hikikae Kyūfu Hanketsu - 引換給付判決): The court will typically issue a judgment ordering the defendant to perform their obligation in exchange for the plaintiff performing their reciprocal counter-obligation. This type of judgment reflects the conditioned nature of the defendant's duty. For example, "The defendant shall deliver the goods to the plaintiff in exchange for the plaintiff's payment of the purchase price of JPY X."
3. Enforcement of the Judgment (Civil Execution Act Article 31): For the plaintiff (the original claimant) to enforce such an "in exchange" judgment against the defendant, a crucial step is required. Under Article 31 of the Civil Execution Act, the plaintiff must first either perform their own counter-obligation or provide a valid tender of that performance (or, in some cases, provide security for it) and prove this fact to the execution court. Only then can compulsory execution against the defendant commence. This practically means that, at the enforcement stage, the plaintiff may effectively be required to perform their part first to unlock their ability to compel the defendant's performance.

Broader Effects of the Defense of Simultaneous Performance

The significance of the doji rikō no kōbenken extends beyond its use as a procedural defense in litigation:

1. Prevention of Default (履行遅滞の阻止 - Rikō Chitai no Soshi): A party who rightfully withholds their performance based on the defense of simultaneous performance is not considered to be in default (delay) of their own obligation. This means they are not liable for damages for delay, nor can the other party typically rescind the contract based on such non-performance, as long as the defense is validly maintained.
2. The "Existence Effect" vs. "Exercise Effect" Debate (Sonzai Kōka Setsu to Kōshi Kōka Setsu - 存在効果説と行使効果説):
   A nuanced theoretical debate exists in Japanese law regarding whether the mere existence of the conditions giving rise to the defense is sufficient to produce certain legal effects (like preventing default), or whether the party must actively assert or exercise the defense for those effects to manifest.
   • The prevailing view, as often presented in commentaries, tends to distinguish:
     • To resist a lawsuit for performance and obtain an "in exchange" judgment, the defendant must actively plead and prove the defense (exercise effect).
     • However, for the purpose of preventing one's own non-performance from constituting a culpable default (thus avoiding liability for delay damages or preventing the other party from rescinding for delay), the mere existence of the right to refuse performance (i.e., the objective conditions for Art. 533 being met) is often considered sufficient, even if not explicitly asserted at that moment (existence effect). This is a practical approach that aligns with the underlying fairness rationale.
3. Impact on Set-Off (Sōsai - 相殺): A party generally cannot use a monetary claim to which the defense of simultaneous performance is attached as the active claim (jidō saiken - 自働債権) to set off against a debt they owe to the other party. This is because allowing such a set-off would effectively compel the other party to give up their claim (which is tantamount to performing their side of the exchange) without receiving the simultaneous counter-performance to which they are entitled. This would undermine the reciprocity protected by Article 533.

Scope and Expansion of the Defense

While Article 533 primarily applies to reciprocal obligations arising from a single bilateral contract, the underlying principle of ensuring fairness and maintaining the link between exchanged performances has led to its application being extended, either by statute or by judicial interpretation based on good faith, to other situations:

• Restitution Obligations upon Contract Rescission (Art. 546): When a contract is rescinded (e.g., due to breach or mutual agreement), the mutual obligations of the parties to restore each other to their pre-contractual positions (genjō kaifuku gimu - 現状回復義務) are explicitly made subject to the principle of simultaneous performance by Article 546.
• Obligations Involving Damages for Non-Conformity: The proviso in Article 533 itself, as revised, clarifies that the defense of simultaneous performance can be asserted even when one of the reciprocal obligations is a claim for damages that is made in lieu of the original performance (e.g., damages for non-delivery that are reciprocal to the payment obligation).
• Other Situations Based on Good Faith: Courts have, by analogy, applied the principle to other scenarios where requiring one party to perform without the assurance of counter-performance would be inequitable. Examples include the obligation to return a promissory note upon payment of the underlying debt, or the mutual obligations arising from the voidness or annulment of a contract where both parties have already partially performed.

Overcoming the Defense

A party demanding performance, when faced with a valid assertion of the defense of simultaneous performance, can overcome it by:

• Actually performing their own due counter-obligation.
• Making a valid and continuous tender of their own due counter-obligation.
• Proving that, by the terms of the contract, the defendant's obligation was intended to be performed first.
• Demonstrating that the defendant has waived their right to assert the defense.

Conclusion: A Cornerstone of Fairness in Contractual Exchange

The defense of simultaneous performance (doji rikō no kōbenken) under Article 533 of the Japanese Civil Code is a vital instrument for ensuring fairness and upholding the reciprocal nature of bilateral contracts. It provides a party with a powerful, albeit temporary, shield against premature demands for performance, protecting them from the risk of performing their obligations without receiving the agreed-upon counter-performance. Its effect in preventing a party from being considered in default while rightfully withholding performance, and its role in shaping court judgments to reflect the need for concurrent exchange, make it a fundamental concept for anyone involved in contractual dealings under Japanese law. Understanding its requirements and implications is essential for both asserting one's rights and anticipating the defenses of a contractual counterparty.