Specific vs. Generic Goods in Japanese Contracts: What Are the Implications of Designating a Claim as "Tokuteibutsu Saiken" or "Shurui Saiken"?

When drafting and interpreting contracts under Japanese law, particularly those involving the sale or transfer of goods, the precise definition of the subject matter is paramount. Japanese civil law draws a fundamental distinction between obligations concerning "specific things" (特定物 - tokuteibutsu) and those concerning "generic or non-specific things" (種類物 - shuruibutsu). This classification, which determines whether a claim is a "tokuteibutsu saiken" (a claim for a specific thing) or a "shurui saiken" (a claim for a generic thing), carries significant legal ramifications regarding the debtor's duties, the point at which risk passes, and the remedies available in case of non-performance. This article explores these two categories of obligations and their practical implications for commercial transactions.

"Tokuteibutsu Saiken": Obligations Concerning Specific Things

A "tokuteibutsu saiken" is an obligatory right whose subject matter is a unique, individually identified item. The parties have agreed upon that particular item and no other. Common examples include:

• The sale of a particular painting by a named artist.
• A contract for a specific, identified used piece of machinery.
• The lease of a designated office space within a building.
• The sale of a precisely demarcated plot of land.

For instance, if two companies agree on the sale of "the vintage printing press, serial number XYZ, currently located at the seller's factory," this establishes a tokuteibutsu saiken for the delivery of that specific press.

It's important to differentiate this from the objective characteristics of goods. Whether an item is "specific" or "generic" in a contract depends on the subjective intent of the parties at the time of contracting. This is distinct from whether an item is objectively fungible (代替物 - daitaibutsu, replaceable by another identical unit) or non-fungible (不代替物 - fudaitaibutsu, unique and irreplaceable). Thus, an objectively fungible item can become the subject of a tokuteibutsu saiken if the parties single out that specific unit – for example, agreeing to purchase "the exact demonstration model of a laptop on display" rather than just "one laptop of that model".

The Debtor's Duty of Care: "Zenkan Chūi Gimu"

A cornerstone of tokuteibutsu saiken is the debtor's duty of care regarding the specific item. Article 400 of the Japanese Civil Code stipulates that until the specific thing is delivered, the debtor must preserve it with the "care of a good manager" (善良な管理者の注意 - zenryōna kanrisha no chūi, often abbreviated as zenkan chūi gimu).

This standard, historically rooted in Roman law and influenced by concepts in European civil codes like the French Civil Code, traditionally implied an objective, abstract level of diligence expected from a prudent person managing another's property. However, the current Japanese Civil Code, particularly after its recent reforms, has nuanced this interpretation. The required standard of care is now explicitly determined "in light of the contract or other cause of the obligation and common sense in transaction (取引上の社会通念 - torihiki-jō no shakai tsūnen)". This means the "care of a good manager" is not a one-size-fits-all standard; it is contextual and depends on the specific terms of the agreement, the nature of the item, the purpose of the contract, the circumstances leading to its conclusion, and prevailing business customs. "Common sense in transaction" ensures that objective factors surrounding the deal are considered, preventing the standard from being based solely on the parties' purely subjective (and perhaps unexpressed) expectations.

A breach of this duty of care – for example, if the seller of the specific printing press fails to store it properly, leading to rust damage before delivery – can result in the creditor (buyer) demanding appropriate preservation measures, seeking compulsory performance of such measures, terminating the contract (if the breach is material), or claiming damages for any loss suffered.

Duty of Delivery vs. Duty of Preservation

It is crucial to understand that the duty to preserve the specific thing (Art. 400) is distinct from the primary duty to deliver a thing that conforms to the contract. Merely exercising the care of a good manager in preserving an item does not absolve the debtor of liability if the item delivered does not meet the contractual specifications. For example, if a contract is for the sale of a specific used car represented as being in good working order, the seller must deliver it in that condition. If the car had pre-existing (but perhaps latent) defects, careful storage alone does not fulfill the delivery obligation if the car delivered is not as contractually promised.

Scope and Limitations of the Duty of Care (Article 400)

The duty of care under Article 400 applies from the formation of the tokuteibutsu saiken until the moment of delivery, which can include periods after the agreed-upon performance due date. However, its practical significance after the due date can be affected by other legal principles:

• Creditor's Delay (受領遅滞 - Juryō Chitai): If the debtor tenders performance but the creditor fails to accept it, the debtor's duty of care regarding the specific thing may be reduced (e.g., to the level of care they exercise for their own property, under Article 413 of the Civil Code).
• Debtor's Delay (履行遅滞 - Rikō Chitai): If the debtor is unjustifiably late in performing, they may become liable for the loss or damage to the specific thing even if caused by force majeure (Article 413-2).

Therefore, the full "care of a good manager" standard under Article 400 primarily governs the pre-delivery period and post-due date situations where neither party is in delay (for instance, if the debtor legitimately withholds performance due to the creditor's failure to perform a concurrent obligation, such as payment).

Parties are free to modify the standard of care by agreement, as Article 400 is a default rule (任意法規 - nin'i hōki). Additionally, specific laws, such as those governing leases, may impose different or more detailed duties of care.

Destruction or Loss of the Specific Thing

What happens if the specific thing, the object of the tokuteibutsu saiken, is lost or destroyed before delivery?

• Creditor Demands Delivery: If the creditor sues for delivery of the specific thing (e.g., the unique printing press), and it has been destroyed, the debtor can raise the defense of "impossibility of performance" (履行不能の抗弁 - rikō funō no kōben). In this context, the immediate issue is the physical impossibility of delivering the unique item, rather than a breach of the duty of care for preservation (though that might be relevant for a damages claim).
• Creditor Claims Damages: If, instead of delivery, the creditor claims damages for the non-delivery due to loss or destruction (e.g., the market value of the printing press or lost profits from its intended use), the legal analysis shifts. The debtor can only avoid liability for damages if they can prove that the impossibility of performance (the destruction) was due to reasons not attributable to them, judged "in light of the contract or other cause of the obligation and common sense in transaction" (Article 415, Paragraph 1, proviso). Merely demonstrating that they exercised the care of a good manager under Article 400 is not, by itself, sufficient to escape liability for damages if the loss of the specific item is otherwise considered a risk they bore under the contract.

"Shurui Saiken": Obligations Concerning Generic Things

A "shurui saiken" is an obligatory right where the subject matter is defined by its type or kind (種類 - shurui) and quantity, rather than as an individually identified item. The specific individual items to be delivered are not determined at the time the contract is made; any items conforming to the specified genus and quantity will satisfy the obligation. Examples include:

• A contract to supply 100 tons of "Grade A milling wheat."
• An order for 500 standard Model X smartphones.
• An agreement to deliver 10,000 barrels of Brent crude oil.

Limited Generic Obligations (制限種類債権 - Seigen Shurui Saiken)

A variation is the "limited generic obligation," where the pool from which the generic items are to be drawn is restricted to a specific source or range. For instance:

• "1,000 bottles of red wine from the 2025 vintage of X Winery."
• "All the conforming widgets produced by Factory B in May."

The primary distinction between general and limited generic obligations lies in the possibility of performance becoming impossible. If the limited source is exhausted or destroyed (e.g., a blight destroys all grapes at X Winery for the 2025 vintage), performance of a limited generic obligation may become genuinely impossible. For general generic obligations, true impossibility is rare because the debtor can, in principle, procure conforming goods from elsewhere in the market. However, this distinction is one of degree and ultimately depends on the parties' intentions and the interpretation of the contract. Even a general generic obligation can become impossible if, for instance, government regulation prohibits the sale of that entire class of goods.

Quality of Generic Goods: The "Medium Quality" Rule

When a contract for generic goods does not specify the quality, and the quality within the genus varies, Article 401, Paragraph 1 of the Civil Code provides a default rule: the debtor must deliver goods of "medium quality" (中等の品質 - chūtō no hinshitsu). This is an objective standard meant to ensure fairness when the parties have not otherwise agreed. However, this rule is secondary to the parties' explicit agreement or any quality standards implied by their intentions or established trade customs. In practice, businesses usually specify quality standards, so reliance on this default rule is less common in commercial contracts.

"Specification" (特定 - Tokutei): Pinpointing the Goods

Since a shurui saiken initially refers to a genus, a crucial step is "specification" (tokutei)—the process by which the generic obligation is focused onto particular, individual items that will be used to fulfill the performance. For example, if a customer orders a standard bicycle model, specification occurs when the seller selects a particular bicycle from their stock, perhaps sets it aside with the customer's name, and informs the customer it is ready for collection.

• Non-Conforming Selection: If the debtor selects items that do not conform to the contractual requirements (e.g., wrong type, defective quality, insufficient quantity), proper specification has not occurred. This situation is treated as a straightforward non-performance (or defective performance) of the obligation, entitling the creditor to remedies such as demanding conforming goods (cure), damages, or contract termination.
• Effects of Specification: Once valid specification has taken place:
  • The obligation, with respect to the identified items, begins to resemble a tokuteibutsu saiken. For instance, if those very specified items are subsequently destroyed without the debtor's fault, the issue of impossibility of performance (rather than just finding other generic items) may arise.
  • Under Japanese case law, ownership of the specified items may transfer to the creditor at the moment of specification, depending on the terms of the contract and relevant sales law principles (referencing Supreme Court judgments of June 24, 1960, and November 6, 1969).
  • The debtor then incurs a duty to preserve these now-specified items with the care of a good manager (Article 400), just as with an original tokuteibutsu saiken.
  • Right to Change/Substitute (変更権 - Henkōken): Because the initial agreement was for generic goods, even after specification, the debtor might, in some circumstances and acting in good faith, have a limited right to substitute other conforming items from the same genus, provided this does not unduly prejudice the creditor or go against their clearly expressed reliance on the initially specified items. This right is not absolute and is judged based on the specific facts and the principle of good faith.

The Process of Specification

How does specification actually occur if not explicitly detailed in the contract?

1. By Agreement (特約による特定 - tokuyaku ni yoru tokutei): The parties can always agree on the method and timing of specification.
2. Completion of Acts Necessary for Delivery (必要行為完了による特定 - hitsuyō kōi kanryō ni yoru tokutei): In the absence of agreement, Article 401, Paragraph 2 of the Civil Code provides that specification occurs when "the debtor has completed the acts necessary to deliver the thing." The nature of these "necessary acts" depends on where performance is due:
   • Obligation to Bring (持参債務 - Jisan Saimu): If the debtor is obliged to deliver the goods to the creditor's domicile or place of business, specification typically occurs only upon "actual tender" (genjitsu no teikyō) of conforming goods at that location. Merely segregating goods at the debtor's warehouse or handing them to a common carrier for shipment to the creditor is generally not sufficient for specification under this rule, unless otherwise agreed (e.g., in certain shipment contracts).
   • Obligation to Pick Up (取立債務 - Toritate Saimu): If the creditor is obliged to collect the goods from the debtor's domicile or another designated place, the traditional view was that specification occurred when the debtor (a) separated or identified the specific goods from their general stock, (b) made them ready for collection, and (c) notified the creditor that they were ready. There was some debate historically about whether mere "oral tender" (kōtō no teikyō - notification of readiness) was sufficient without physical segregation. The modern Civil Code's approach, particularly with revised rules on risk transfer in sales (Article 567, Paragraph 1, which now ties risk transfer primarily to delivery rather than specification), suggests that the precise moment of specification in toritate saimu should be determined by looking at the contract's overall intent and what acts are appropriate to trigger the legal consequences of specification (like ownership transfer under the contract, or the shift in the duty of care), rather than adhering to a rigid "separation" rule. The focus is on whether the debtor has done all they contractually need to do to make the specific goods available for the creditor's collection.
   • Obligation to Send to a Third Place (送付債務 - Sōfu Saimu): If the contract requires the debtor to send the goods to a location other than the creditor's or debtor's place, and that third place is the agreed place of performance, specification occurs upon actual tender there. If sending to a third place is merely a courtesy or facilitation by the debtor, not the designated place of performance, some views suggest specification might occur upon dispatch after segregation, but this largely turns on the specific interpretation of the contractual delivery obligations.
3. By Designation (指定権者の指定による特定 - Shitei-kensha no shitei ni yoru tokutei): If the contract grants one of the parties (or a third party) the right to select the specific items from the genus, specification occurs when that party makes a valid designation (as per Article 401, Paragraph 2, latter part).

Practical Implications for Commercial Contracts

The distinction between tokuteibutsu saiken and shurui saiken has several practical consequences for businesses involved in contracts governed by Japanese law:

• Clarity in Subject Matter Definition: Contract drafters should be precise. If a unique, specific item is intended, the contract should clearly identify it. If the obligation is for generic goods, the type, grade, quality standards, and quantity must be unambiguously defined to avoid disputes over "medium quality" or non-conformity.
• Risk of Loss or Damage: For specific things, the debtor bears the duty of care of a good manager until delivery. If the specific item is destroyed due to the debtor's fault, they are liable. If due to force majeure before risk passes, the obligation might be extinguished due to impossibility. For generic things, until specification, the debtor generally bears the risk of sourcing conforming goods; the destruction of some of their stock does not usually excuse performance unless it’s a limited generic obligation and the entire specified source is affected.
• Remedies for Non-Conformity: If generic goods are specified but turn out to be non-conforming, the creditor has rights to demand cure (repair, replacement, or completion). For specific things, "cure" in the sense of replacement is usually not possible (as the item is unique), so remedies would focus on repair (if feasible), price reduction, damages, or termination.
• Transfer of Ownership: While often linked to delivery, understanding when specification occurs can be relevant if the contract stipulates that ownership transfers at an earlier point, such as upon specification.

For international sales contracts, it's worth noting that if conventions like the UN Convention on Contracts for the International Sale of Goods (CISG) apply, they have their own detailed rules regarding the seller's obligations for conformity of goods and the process of identification of goods to the contract, which might interact with or supersede these domestic Japanese law concepts depending on the contract's choice of law provisions.

Conclusion

The Japanese Civil Code's distinction between obligations concerning specific things (tokuteibutsu saiken) and generic things (shurui saiken) is a fundamental aspect of contract law that impacts the debtor's duties of care, the process of identifying goods for delivery, and the consequences of loss or non-conformity. While these concepts have deep historical roots, their modern application, particularly regarding the debtor's duty of care and the process of specification, is interpreted in light of the specific contractual context and prevailing transactional norms. For businesses, a clear understanding of these classifications and diligent contractual drafting to reflect the parties' true intentions regarding the subject matter are essential for minimizing ambiguity and managing risks effectively under Japanese law.