We shop and use services almost every day. All of these are legal acts called “contracts.” Understanding consumer rights and the structure of contracts is essential for leading a safe and independent consumer life.
Basic Knowledge
A contract is a legally binding agreement (a legal act) established through an offer and acceptance. It can be formed orally and, in principle, cannot be canceled unilaterally. Consumer rights were first presented in a 1962 message by U.S. President Kennedy, which identified four rights: ① the right to safety, ② the right to be informed, ③ the right to choose, and ④ the right to be heard. In Japan, the Consumer Basic Act (2004, revising the former Consumer Protection Basic Act) explicitly states consumer rights. A system that protects consumers from harmful business practices is cooling-off, a system that allows a contract to be canceled unconditionally within a specified period for certain transactions. For door-to-door sales and telephone solicitation sales, a written request may be made within 8 days; for pyramid sales transactions (multilevel marketing), it may be made within 20 days. Following an amendment to the Civil Code, from April 2022 the age of adulthood was lowered from 20 to 18. As a result, 18- and 19-year-olds can make contracts without parental consent and can no longer use the right to cancel contracts as minors.
Contract (a legally binding agreement established through an offer and acceptance)
Cooling-off (a system allowing a contract to be canceled unconditionally within a specified period. Door-to-door sales: 8 days)
Consumer Basic Act (enacted in 2004. Establishes the rights of consumers and the responsibilities of businesses, the national government, and local governments)
Age of adulthood: 18 (lowered from 20 to 18 through the Civil Code amendment from April 2022)
Right to cancel contracts as a minor (the right of a minor to cancel a contract made without parental consent)
Consumer Affairs Agency (established in 2009. An agency that centralizes consumer administration)
Further Study (Background and Significance)
Information asymmetry is a problem in modern consumer society. Businesses have abundant information about goods and services, while consumers have less information and are placed at a disadvantage. To correct this gap, the Consumer Contract Act (enacted in 2001) was established, allowing contracts resulting from unfair solicitation, such as misleading or intimidating acts, to be canceled. In 2009, the Consumer Affairs Agency was established to eliminate the harmful effects of administrative fragmentation. Since lowering the age of adulthood to 18 (2022) has made young people more likely to become targets of harmful business practices, improving consumer education is an urgent task. Measures against fraudulent business practices through online shopping and social networking services are also important challenges.
- Contracts can be formed orally and, in principle, cannot be canceled unilaterally
- Cooling-off periods: door-to-door sales and telephone solicitation sales = 8 days; pyramid sales transactions (multilevel marketing) = 20 days
- Consumer Protection Basic Act (1968) → Consumer Basic Act (revised in 2004)
- The age of adulthood of 18 has applied since April 1, 2022 (Civil Code amendment)
- The Consumer Affairs Agency was established in 2009 (centralization of consumer administration)
- The right to cancel contracts as a minor applies to people under 18 (since 2022)
- Four consumer rights: safety, information, choice, and being heard (Kennedy message, 1962)
Points to Note (Easily Confused Concepts)
① Scope of cooling-off: ordinary purchases made in stores are not covered, while door-to-door sales and telephone solicitation sales are covered. ② The age of adulthood of 18 took effect in April 2022; before that, adulthood began at 20. The age limits for drinking alcohol, smoking, and gambling (publicly operated competitions) remain 20. ③ The Consumer Protection Basic Act (1968) and the Consumer Basic Act (revised in 2004) are not separate laws; the name and content were changed through revision. ④ Be careful when using the right to cancel contracts as a minor: it applies not to all contracts, but only to contracts made without parental consent.
Practice
- What kind of system is “cooling-off”? Explain it, including the period for door-to-door sales.
- What changes occurred for 18- and 19-year-olds as a result of the 2022 amendment to the Civil Code lowering the age of adulthood?
- What kind of problem is the “information asymmetry” between consumers and businesses? State what laws have been established to correct it.