What Happens if a Creditor Delays in Accepting Performance ("Juryō Chitai") Under Japanese Law?

The performance of an obligation is typically a two-way street. While the debtor (obligor) has the primary duty to perform, the creditor (obligee) often needs to cooperate by accepting the performance or taking other necessary steps. But what happens when a debtor is ready and willing to fulfill their obligation, and properly tenders performance, yet the creditor fails or refuses to accept it, or is unable to do so? This situation, known in Japanese law as "Juryō Chitai" (受領遅滞 – creditor's delay or default in acceptance), triggers a distinct set of legal rules designed to protect the diligent debtor and reallocate certain burdens and risks to the non-cooperating creditor.

The Japanese Civil Code (Minpō - 民法) addresses the consequences of a creditor's failure to accept a valid tender of performance through primarily two interconnected yet distinct concepts:

  1. Effects of Tender of Performance (弁済の提供の効果 - Bensai no Teikyō no Kōka): As discussed previously, a valid tender by the debtor, as per Article 492, primarily serves to relieve the debtor from liability for their own non-performance or delay from the time of the tender. This is a defensive mechanism for the debtor.
  2. Creditor's Delay (受領遅滞 - Juryō Chitai): Governed mainly by Articles 413 and 413-2, this doctrine focuses on the consequences for the creditor when they fail to accept a properly tendered performance. It's less about excusing the debtor and more about imposing certain responsibilities or adverse outcomes on the creditor due to their non-acceptance or lack of cooperation.

While both often arise from the same factual scenario—a tendered but unaccepted performance—they address different legal ramifications.

The theoretical underpinning of creditor's delay has been a subject of academic debate in Japan, particularly concerning its classification under the old Civil Code:

  • Statutory Liability Theory ("Hōtei Sekinin Setsu" - 法定責任説): This was the traditional prevailing view. It posited that creditors primarily possess rights, not an inherent duty to accept performance. Therefore, a failure to accept was not considered a breach of obligation (債務不履行 - saimu furikō) by the creditor. Instead, specific legal consequences for creditor's delay (such as a reduction in the debtor's duty of care) were directly imposed by statute out of considerations of fairness to the diligent debtor. This theory found support in some older court decisions.
  • Breach of Obligation Theory ("Saimu Furikō Setsu" - 債務不履行説): This perspective, which gained increasing support over time, argued that in many contractual relationships, creditors have an implied (if not explicit) obligation to cooperate in the performance process, including the duty to accept a conforming tender. A failure to do so would then constitute a breach of this duty by the creditor, potentially entitling the debtor to general remedies for breach of contract, such as damages or even contract termination.

The newly revised Japanese Civil Code appears to adopt a nuanced approach. While it doesn't explicitly frame creditor's delay as a breach of a general duty of acceptance for all types of obligations, it clearly separates the statutory effects of the state of creditor's delay (e.g., as outlined in Articles 413 and 413-2) from the consequences of a creditor breaching a distinct, affirmative duty of cooperation (which might exist under a specific contract or the principle of good faith). This suggests that the primary effects of creditor's delay are statutory consequences attached to the objective situation of non-acceptance of a proper tender, without necessarily requiring a finding that the creditor breached a specific "duty to accept" in every instance. However, this does not preclude the possibility that such a duty might exist and be breached in particular circumstances, leading to broader remedies for the debtor.

Requirements for "Juryō Chitai"

For a creditor to be deemed in "Juryō Chitai," certain conditions must typically be met:

1. Debtor's Valid Tender of Performance ("Rikō no Teikyō")

Generally, the foundation for creditor's delay is a valid tender of performance by the debtor. This means the debtor must have done everything required by the "tenor of the obligation" to make performance available to the creditor, whether through "actual tender" (現実の提供 - genjitsu no teikyō) or, where permissible, "oral tender" (口頭の提供 - kōtō no teikyō), as previously discussed.

  • If the debtor's tender is defective (e.g., offering non-conforming goods or only partial payment without justification), the creditor's refusal to accept it will not constitute creditor's delay.
  • Exceptions to the tender requirement exist, such as when the creditor has definitively and unequivocally refused to accept any performance in advance. In such cases, requiring the debtor to perform a futile tender might be excused under the principle of good faith (信義則 - shingisoku).
  • Performance Must Be Possible: At the heart of a valid tender is the assumption that the underlying performance is actually possible at that time. If performance has become impossible due to the debtor's fault, the issue is one of debtor's default, not creditor's delay. The distinction between impossibility and situations giving rise to creditor's delay can be particularly relevant in service contracts. Some legal theories, like the "sphere theory" (Sphärentheorie, a concept from German law sometimes discussed in Japan), attempt to allocate responsibility based on whether the impediment to performance or acceptance arose from circumstances within the debtor's or creditor's sphere of control.

2. Creditor's Failure to Accept or Cooperate ("Juryō Shinai Koto")

Once a valid tender is made, the creditor must fail to accept the performance or fail to provide necessary cooperation for the performance to be completed. This failure can manifest as:

  • Explicit Refusal ("Juryō Kyozetsu" - 受領拒絶): The creditor overtly states they will not accept the performance.
  • Objective Inability to Accept ("Juryō Funō" - 受領不能): The creditor is, for some reason (which does not have to be their fault), not in a position to accept the tendered performance (e.g., not being present at the agreed place and time for delivery).

This failure to accept is subject to a normative evaluation. Not every instance of non-acceptance will trigger creditor's delay; for example, if the debtor's tender is improper, the creditor's refusal is justified.

Crucially, for the primary statutory effects of creditor's delay to arise (such as the reduction of the debtor's duty of care), the creditor's failure to accept generally does not need to be due to their fault or negligence (帰責事由 - kiseki jiyū). The legal consequences attach to the objective state of non-acceptance of a proper tender.

Effects of "Juryō Chitai"

When a creditor is in delay, Japanese law imposes several consequences, primarily designed to alleviate the debtor's burdens and reallocate certain risks:

(a) Reduction of Debtor's Duty of Care for Preservation (Art. 413(1))

If the obligation involves the delivery of a specific identified thing (e.g., a particular painting, a specific machine), Article 413, paragraph 1 of the Civil Code provides that once the creditor is in delay of acceptance, the debtor's duty of care in preserving that thing is reduced. From that point onwards, the debtor is only required to preserve the item with "the same degree of care that the obligor exercises in preserving his/her own property" (自己の財産に対するのと同一の注意 - jiko no zaisan ni taisuru no to dōitsu no chūi).

This is a lower standard than the "care of a good manager" (善良な管理者の注意 - zenryō na kanrisha no chūi) which is typically required for obligations concerning specific things under Article 400 of the Civil Code. The rationale is that, due to the creditor's delay, the debtor is essentially forced to act as an involuntary (and usually uncompensated) custodian of property that should rightly be in the creditor's possession. This reduced standard means the debtor will only be liable for loss or damage to the thing if it results from their failure to exercise this lower degree of care (e.g., gross negligence or intentional misconduct).

(b) Debtor's Right to Claim Reimbursement for Increased Costs (Art. 413(2))

If, as a result of the creditor's delay, the debtor incurs necessary additional expenses in relation to the performance or preservation of its subject matter (e.g., storage costs, insurance, animal feed), Article 413, paragraph 2 provides that the creditor must reimburse the debtor for such increased costs. This is a claim for reimbursement of actual, increased expenses directly caused by the delay, not a claim for general damages for breach of contract. Therefore, the creditor generally cannot avoid this liability by arguing lack of fault for their delay in acceptance.

(c) Facilitation of Debtor's Right to Make a Deposit ("Kyōtaku Ken")

While the right to make a formal deposit (供託 - kyōtaku) of the subject matter of performance is primarily governed by Article 494 of the Civil Code, one of the main grounds for making such a deposit is the creditor's refusal or inability to accept performance. Thus, creditor's delay directly enables the debtor to utilize the kyōtaku system to effectively discharge the obligation and free themselves from further responsibility for the performance.

(d) Exemption from Duty to Collect Fruits (Uncertain Status)

Some historical legal discussions, influenced by comparative law, suggested that creditor's delay might exempt the debtor from a duty to collect fruits (果実 - kajitsu) that the subject matter of the obligation might generate (e.g., rent from a property that was tendered but not accepted). However, this is not a clearly established effect in modern Japanese law. The revised Civil Code did not introduce a specific provision to this effect, and its practical relevance and applicability are considered limited or uncertain by many contemporary scholars.

(e) Creditor's Delay and the Defense of Simultaneous Performance

In bilateral contracts, where obligations are often linked by the defense of simultaneous performance (simultaneous performance defense - 同時履行の抗弁権 - dōji rikō no kōbenken), the question arises whether a creditor in delay loses their right to invoke this defense. The Civil Code does not explicitly state that creditor's delay negates this defense. The prevailing interpretation seems to be that the fundamental requirement of exchange in bilateral contracts is not automatically nullified by creditor's delay. If the debtor (who initially tendered) later demands counter-performance, the creditor (who was in delay) might still technically be able to raise the defense. However, the practicalities of enforcement would be complex, likely requiring the debtor to re-tender their performance to overcome the defense in an enforcement context.

(f) Impossibility of Performance Arising During Creditor's Delay (Art. 413-2(2))

This is one of the most significant consequences of creditor's delay, particularly regarding risk allocation. Article 413-2, paragraph 2 of the Civil Code (a provision clarified and given prominence in the recent reforms) stipulates: "If performance becomes impossible or is otherwise frustrated during the obligee's delay in acceptance due to grounds not attributable to either party, such impossibility or frustration shall be deemed attributable to the obligee."

This has profound implications, especially for bilateral contracts:

  • Risk Allocation: The risk of supervening impossibility of performance (due to no fault of either party, or due to the creditor's fault) shifts to the creditor once they are in delay.
  • Creditor Cannot Terminate: The creditor cannot terminate the contract based on this impossibility, as it is now legally deemed attributable to them (see Article 543, which prevents termination by a party to whom impossibility is attributable).
  • Creditor Remains Liable for Counter-Performance (Risk Bearing - "Kiken Futan" - 危険負担): Even though the creditor will not receive the debtor's performance (which has become impossible), the creditor remains obligated to render their own counter-performance (e.g., pay the purchase price). This is a direct consequence of Article 536, paragraph 2, which applies when performance becomes impossible due to a cause attributable to the creditor. However, the debtor, if they have gained any benefit from being excused from their own performance (e.g., saved costs), must pass this benefit on to the creditor.
  • Application to Service Contracts: This principle can be extended to service contracts. For example, if a service provider (debtor) tenders their services and the client (creditor) is in delay in accepting them (e.g., by not providing necessary access or information), and subsequently the service provider becomes unable to perform due to reasons not attributable to them (e.g., illness), the service provider might still be entitled to their remuneration.
  • No Damages Claimable by Creditor Against Debtor: Since the impossibility is deemed attributable to the creditor (or not attributable to the debtor), the creditor cannot claim damages from the debtor for non-performance under Article 415.
  • Special Rule for Sales Contracts (Art. 567(2)): The Civil Code contains a specific rule for sales in Article 567, paragraph 2. If the seller (debtor of goods) tenders delivery of conforming goods, and the buyer (creditor of goods) is in delay of acceptance, and the goods are subsequently lost or damaged due to a cause not attributable to either party, the buyer cannot exercise remedies for non-conformity such as demanding subsequent completion of performance, requesting a price reduction, claiming damages, or terminating the contract. This effectively transfers the risk of accidental loss or damage to the buyer once they are in delay of acceptance. This rule largely aligns with and specifies the consequences of the general principle in Article 413-2, paragraph 2 for sales.

Termination of Creditor's Delay ("Juryō Chitai no Shūryō")

Creditor's delay is not a permanent state. It comes to an end under several circumstances:

  1. Extinguishment of the Underlying Obligation: If the principal obligation is extinguished for any reason (e.g., the creditor finally accepts performance, the debtor makes a valid deposit, the parties agree to release the debt, or the contract is terminated), the state of creditor's delay also ceases.
  2. Debtor's Waiver: The debtor can choose to waive the effects of the creditor's delay.
  3. Creditor Cures the Delay: The creditor can end the delay by unequivocally indicating their willingness to accept the previously tendered performance, making all necessary preparations on their part to facilitate acceptance, and duly notifying the debtor of this readiness.

Creditor's Affirmative Duty to Accept and Other Duties of Cooperation

Separate from the statutory consequences of being in a state of "Juryō Chitai," there is the question of whether a creditor has an affirmative duty to accept performance or otherwise cooperate, the breach of which could give the debtor independent grounds for remedies like damages or contract termination.

Creditor's Duty of Good Faith Conduct

While Japanese law does not impose a universal, explicit statutory duty on all creditors to accept performance for all types of obligations, such a duty can arise in several ways:

  • Contractual Stipulation: The contract itself may expressly or implicitly require the creditor to accept performance or take certain cooperative actions.
  • Principle of Good Faith (信義則 - Shingisoku): The overarching principle of good faith, enshrined in Article 1, paragraph 2 of the Civil Code, can be a source of an implied duty for the creditor to cooperate in the realization of the contract's purpose, including accepting a conforming tender. This is particularly recognized in contracts requiring close collaboration or where the debtor's performance is significantly dependent on the creditor's input or actions.
  • Specific Contract Types: In certain types of contracts, such as sales (duty to take delivery) or construction contracts (duty to inspect and accept the work), a duty of acceptance or cooperation on the part of the creditor (buyer, client) is more readily acknowledged. The legislative discussions during the Civil Code reform considered explicitly codifying a buyer's general duty to accept goods but ultimately left this to be determined by interpretation of specific contracts and the good faith principle.

Remedies for Breach of an Affirmative Duty to Cooperate/Accept (Creditor's Default)

If an affirmative duty of cooperation or acceptance is found to rest upon the creditor, and the creditor breaches this duty (債権者の債務不履行 - saikensha no saimu furikō), the debtor may have access to the general remedies for breach of contract, which could be broader than the specific effects of "Juryō Chitai":

  • Damages (損害賠償 - Songai Baishō): The debtor could claim damages for losses suffered as a direct result of the creditor's breach of their cooperation duty. This could include not just increased direct costs of performance (which might also be recoverable under Article 413(2) for creditor's delay) but also consequential losses, such as lost profits from other opportunities forgone because resources were tied up due to the creditor's non-cooperation. Recovering these broader damages typically requires proving a breach of an actual duty by the creditor, rather than just the state of creditor's delay.
  • Contract Termination (契約の解除 - Keiyaku no Kaijo): If the creditor's breach of their cooperation duty is sufficiently material, it might entitle the debtor to terminate the contract.
  • Specific Performance (Specific performance of a duty to accept is generally not compellable, but there might be narrow exceptions for certain cooperative acts other than mere acceptance of a final prestation).

It's important to distinguish the claim for reimbursement of increased costs due to the state of creditor's delay (Art. 413(2))—which does not necessarily depend on creditor fault—from a claim for damages due to the creditor's breach of a duty to cooperate, which would be subject to the general rules of contract default, including the possibility of the creditor proving lack of fault for their breach (if the duty itself is one of best efforts).

Conclusion

"Juryō Chitai" under Japanese law is a carefully constructed doctrine that addresses the imbalance created when a ready and willing debtor is prevented from completing performance by the creditor's failure to accept or cooperate. It primarily functions to protect the debtor by mitigating their liabilities and by shifting certain risks (like accidental impossibility of performance) to the creditor. While it does not automatically extinguish the debt, it significantly alters the legal landscape of the obligation. Furthermore, the potential existence of an affirmative duty on the creditor to cooperate, grounded in the contract or good faith, can provide the debtor with more extensive remedies if that duty is breached. Navigating these rules requires a clear understanding of the debtor's tender obligations and the specific consequences that flow from a creditor's delay in acceptance.