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The signature requirements pertain the legal or contractual requirements in order to make a legally effective declaration of intent or a legally binding contract.
Possibility to replace a specific formal requirement of making a binding declaration of intention
In Japan, in principle, an agreement (including electronic contract) is formed only by offer and acceptance, without requiring the preparation of documents or any other formalities, except as otherwise provided by laws and regulations. A signature or seal merely indicates that the document was created by the signer. However, as it is quite difficult to prove the existence of an oral contract later, the preparation of a written contract and the signing or sealing of it are virtually essential in practice.
Presence of any specific formal requirements to effectively conclude a loan agreement
As previously described, in principle, an agreement is formed only by offer and acceptance without requiring the preparation of documents or any other formalities, except as otherwise provided by laws and regulations. A loan agreement is formed by the delivery of money from the lender to the borrower, plus offer and acceptance (Art. 587, Civil Code). However, a loan agreement made in writing becomes effective when a lender promises to lend money and a borrower promises to make a repayment (Art. 587-2, para. 1, Civil Code). If a loan is made electronically, the loan is deemed to have been made in writing (Art. 587-2, para. 4, Civil Code).
Process of conclusion of a contract by using a qualified electronic signature in practice
The method for using an electronic signature under the Act on Electronic Signatures and Certification Business is as follows: The sender creates a private key and a public key, registers the public key at a certification business, and has a digital certificate issued by that certification business. Then, the sender performs a conversion operation using a hash function on the electronic document to be sent to create a hash value. Next, the hash value is encrypted using the private key. This encrypted data is the "digital signature". The sender then attaches the digital signature to the electronic document and sends it to the recipient together with a digital certificate.
Legal consequences to a contract in case of not fulfilling formal requirements
In the case of a contract for which a certain formality is a requirement by law for the conclusion of the contract, if the requirements are not met, then the contract is not effective.
Usual practice of signing contractual agreements in the B2B sector
Traditionally, the conclusion of a B2B contract is made by preparing a document and affixing a seal to the document.
However, electronic contracts have recently become common.
Usual practice of signing contractual agreements in the B2C sector
In certain important contracts such as real estate transactions, a document is prepared and signed and sealed. However, in general, terms and conditions are used for less important contracts, and signatures and seals are rarely used in the B2C sector.