When Does a Contractual Offer or Acceptance Become Legally Effective in Japan?

In the realm of contract law and other legal communications, the precise moment a declaration of intent—such as an offer, an acceptance, or a notice of termination—becomes legally effective is of paramount importance. This timing dictates when parties become bound, when rights and obligations arise or cease, and when periods for action (like revocation or fulfillment) begin or end. Japanese civil law provides a structured framework for determining this critical juncture, primarily centered on the "arrival" of the manifestation of intention to the recipient. This article explores these rules, their rationale, and their practical implications.

The Journey of a Manifestation of Intention (Ishi Hyōji)

A manifestation of intention (ishi hyōji - 意思表示), which is a declaration of one's will to achieve a particular legal effect, undergoes several stages in its transmission from the declarant (sender) to the addressee (recipient):

1. Expression (Hyōhaku - 表白): The point at which the declarant formulates their intention and embodies it in some communicable form (e.g., writing a letter, drafting an email, deciding what to say).
2. Dispatch (Hasshin - 発信): The act of sending the manifestation of intention towards the addressee (e.g., mailing the letter, sending the email, speaking the words).
3. Arrival (Tōtatsu - 到達): The point at which the manifestation of intention reaches the addressee in a way that they can access it.
4. Actual Knowledge (Ryōchi - 了知): The moment the addressee actually perceives and understands the content of the manifestation.

Historically, Japanese law, like many legal systems, drew a distinction between communications "between persons present" (taiwasha-kan - 対話者間), such as face-to-face conversations or telephone calls where dispatch and arrival are virtually simultaneous, and communications "between persons at a distance" (kakuchisha-kan - 隔地者間), such as letters or telegrams, where a time lag is inherent. While this distinction was relevant for certain specific rules under the older Civil Code (e.g., regarding the timing of contract acceptance), the general principle for when a manifestation of intention takes effect has been increasingly unified, with the revised Civil Code largely eliminating this distinction for the core rule of effectiveness.

The Guiding Principle: The "Arrival Principle" (Tōtatsu-shugi)

The Japanese Civil Code, in Article 97, Paragraph 1, establishes the "Arrival Principle" (tōtatsu-shugi - 到達主義) as the general rule for when a manifestation of intention addressed to another person becomes legally effective. It states: "A manifestation of intention made to specific party shall become effective when it arrives at such party."

The rationale behind this principle is rooted in fairness to the recipient. It is generally considered inequitable to legally bind an individual or entity by a communication before they have had a reasonable opportunity to become aware of its content. Under the arrival principle, the risk of delay or non-delivery during transmission typically rests with the sender (declarant).

This contrasts with the "Dispatch Principle" (hasshin-shugi - 発信主義), where a manifestation of intention would become effective at the moment it is sent. While the dispatch principle had a limited application under the pre-2020 Civil Code (notably, for the acceptance of a contract made between persons at a distance under former Article 526, Paragraph 1), this exception was abolished by the 2020 Civil Code reforms. The move was, in part, a recognition that modern communication methods often blur the lines of "distance" and that a uniform rule based on arrival provides greater clarity and aligns better with international trends and the recipient's ability to know. The "Act on Special Provisions to the Civil Code Concerning Electronic Consumer Contracts and Electronic Acceptance Notices" had already adopted the arrival principle for electronic acceptances even before the general Civil Code revision.

The points of "expression" by the declarant or "actual knowledge" by the recipient are not generally considered viable moments for legal effectiveness. Expression alone is insufficient as the intention has not yet been communicated. Requiring actual knowledge would place too much power in the hands of the recipient, who could indefinitely postpone the effectiveness of a communication simply by refusing to read or acknowledge it.

Defining "Arrival" (Tōtatsu): Beyond Physical Receipt

Given the centrality of "arrival," its legal definition is crucial. Japanese case law has established that "arrival" does not necessarily mean physical receipt by the addressee themselves, nor does it require the addressee to have actual knowledge of the communication's contents.

Instead, a manifestation of intention is deemed to have "arrived" when it is placed within the "sphere of control" (shihai kennai - 支配圏内) of the addressee, such that the addressee is objectively in a position to learn of its contents. Leading Supreme Court judgments (e.g., judgment of April 20, 1961, Minshu Vol. 15, No. 4, p. 774; judgment of June 11, 1998, Minshu Vol. 52, No. 4, p. 1034) have affirmed this interpretation. This means, for example, a letter delivered to the recipient's mailbox, an email received by their server and accessible through their account, or a notice delivered to their registered office typically constitutes arrival.

Practical Scenarios and Nuances in Determining Arrival:

• Receipt by a Third Party: If the communication is received by someone other than the named addressee, it can still constitute "arrival" if that person can objectively be expected to pass it on to the addressee in the ordinary course of affairs. For example, receipt by a family member residing with the addressee at their home, or by an employee at a company authorized to receive mail, would generally suffice.
• Refusal of Receipt: If an addressee, or someone acting on their behalf, refuses to accept a communication without "just cause" (seitō na riyū - 正当な理由), the communication may be deemed to have arrived at the time of the attempted delivery or refusal. This prevents parties from evading the legal effects of a notice by simply refusing to take possession of it (Daishin'in judgment, February 14, 1936, Minshu Vol. 15, p. 158; Supreme Court judgment, June 11, 1998). However, if the refusal is with just cause (e.g., the addressee is genuinely absent for an extended period and a household member temporarily refuses delivery of mail not clearly addressed to them specifically), "arrival" might only occur upon actual subsequent receipt or when the addressee reasonably should have become aware of it.
• Arrival at Inopportune Times: If a communication, such as an email or fax, arrives at a business address outside of normal business hours (e.g., late at night, on a weekend or public holiday), it is generally considered to have "arrived" at the commencement of the next business day, unless the recipient actually accesses or becomes aware of it earlier.
• Electronic Communications: For emails and other digital messages, "arrival" is typically considered to occur when the data reaches a server accessible to the recipient, making it retrievable by them. The recipient does not need to have opened or read the message.
• Obstruction of Arrival (Article 97, Paragraph 2 of the revised Civil Code): The revised Civil Code clarifies a point previously addressed through case law: "If the other party, without just cause, obstructs the notice of manifestation of intention from arriving, that notice is deemed to have arrived at the time it normally should have arrived." This prevents a party from benefiting from their own wrongful act of preventing receipt.

Implications of the Arrival Principle for Offer and Acceptance

The arrival principle has direct consequences for the formation of contracts:

• Offer (Mōshikomi - 申込み): An offer becomes legally effective when it "arrives" at the offeree. Before arrival, the offeror can generally withdraw or revoke the offer. Once an offer has arrived and become effective, the offeror is bound by it. Under the revised Civil Code, an offer specifying a period for acceptance cannot be revoked during that period (Article 523, Paragraph 1). If no period is specified, an offer made to a person at a distance cannot be revoked until after a reasonable period for acceptance has passed (Article 525, Paragraph 1).
• Acceptance (Shōdaku - 承諾): Under the revised Civil Code, an acceptance also becomes effective when it "arrives" at the offeror (due to the application of the general rule in Article 97, Paragraph 1, and the deletion of the former dispatch rule for acceptances between persons at a distance). The contract is formed at the moment the acceptance effectively "arrives." This unification simplifies the rules for contract formation.

Events After Dispatch but Before Effectiveness

Certain events occurring after a manifestation of intention has been dispatched but before it legally takes effect (i.e., before arrival) might raise questions about its validity.

Declarant's Death or Loss of Capacity (Article 97, Paragraph 3 of the revised Civil Code):
The Civil Code provides that if a declarant dispatches a manifestation of intention and subsequently dies, has a limitation placed on their capacity to act (e.g., becomes an adult ward), or loses mental capacity before the manifestation of intention takes effect (arrives), the validity of that manifestation of intention is generally not impaired. The rationale is that the declarant's action in making the declaration was completed upon dispatch. The subsequent event affecting the declarant does not retroactively invalidate the dispatched communication.

However, there are specific provisions concerning offers. For instance, if an offeror dies or loses capacity to act after dispatching an offer but before the offeree has accepted, the offer may lose its effect if the offeror had expressed an intention to that effect, or if the offeree was aware of such facts at the time of acceptance (Article 526 of the revised Civil Code, which replaced former Article 525 with some modifications but maintains the core idea).

The Recipient's Capacity to Receive (Juryō Nōryoku)

For a manifestation of intention to be validly asserted against its recipient, the recipient must have the legal capacity to receive and understand such a communication. This is known as juryō nōryoku (受領能力 - capacity to receive). Article 98-2 of the revised Civil Code addresses this:

• Principle: A manifestation of intention cannot be asserted against a recipient who, at the time of receipt, was a minor or an adult ward, unless their legal representative was aware of the receipt. The same applies if the recipient lacked mental capacity at the time of receipt.
• Rationale: This rule is designed to protect individuals whose judgment or ability to understand the legal implications of a communication may be compromised. The communication should ideally be directed to their legal representative (e.g., a parent for a minor, a guardian for an adult ward).
• Exceptions:
  1. If the legal representative of the minor, adult ward, or person who lacked mental capacity subsequently becomes aware of the manifestation of intention.
  2. If the manifestation of intention pertains to a legal act that the minor or adult ward is permitted to undertake independently according to law (e.g., disposing of property permitted by a legal representative, or acts related to daily life for an adult ward within certain limits).
  3. If a person who received a manifestation of intention while lacking mental capacity subsequently regains capacity and becomes aware of the manifestation, or if a minor or adult ward later becomes a person with full capacity and becomes aware of it.

This framework ensures that vulnerable individuals are not unfairly bound by communications they could not properly comprehend or act upon.

Conclusion: Ensuring Clarity and Fairness in Legal Communications

The Japanese Civil Code's emphasis on the "Arrival Principle" for determining the effectiveness of manifestations of intention, such as contractual offers and acceptances, serves to create a clear and generally equitable framework. By focusing on the point at which a communication enters the recipient's "sphere of control," the law seeks to ensure that parties are bound only when they have a reasonable opportunity to be informed. The nuanced rules defining "arrival," considering circumstances like refusal or obstruction, and addressing the capacities of both the declarant and the recipient, further refine this principle. These rules collectively aim to balance the interests of the sender in achieving effective communication with the recipient's right to be fairly apprised of legally significant declarations, thereby promoting certainty and fairness in the multitude of legal transactions that underpin personal and commercial life in Japan.