The Ministry of Land, Infrastructure, Transport and Tourism will begin considering whether to abolish the requirement for signatures or names and seals in certain cases for construction contracts, which is currently required under the Construction Business Act. Provided that the basic contract clarifies the details of the transaction and ensures equality between the parties, the system will be reorganized so that purchase orders and invoices related to the basic contract do not require a second seal. To promote the spread of e-contracts, the government also announced its intention to revise the current guidelines, which have not kept up with recent technological advances, by the first half of fiscal 2025.
The Ministry of Land, Infrastructure, Transport and Tourism attended a meeting of the Digital and AI Working Group (WG) established by the government's Regulatory Reform Promotion Council on the 4th and was asked to take immediate action to simplify written contracts.
Private companies have requested exemption from the seal requirement to reduce costs and improve operational efficiency, and Mitsui Fudosan explained the specific details of its proposal at the WG. In particular, they requested a review of the interpretation and operation of the current system, which allows for exemption from the seal in cases where the basic contract is signed and the purchase order and invoice are subsequently exchanged. It was also proposed that consideration should be given to waiving the seal only in cases where the contract content is similar to the standard terms and conditions for construction contracts (standard terms and conditions).
The current requirement for a seal is intended to clarify the responsibilities of the parties to the contract and promote understanding of the contract content. The Ministry of Land, Infrastructure, Transport and Tourism raised an important point when considering the system as to whether the system could eliminate the risk of increased risk due to the one-sided nature of the employment contract and the lack of understanding of the average consumer. The working group pointed out that, assuming that bias and risk would be eliminated, the requirement for the use of a seal should first be waived for purchase orders and invoices, and reasonable alternatives to the seal should also be considered for other contracts.
It has been more than 20 years since the technical standards for electronic contracts were issued, and some private companies have voiced concerns that the status of witness-type electronic signatures, which are now mainstream, is still unclear. Mitsui Fudosan also called for their use to be promoted through easy-to-understand regulations. The Ministry of Land, Infrastructure, Transport and Tourism expressed its intention to revise the guidelines as soon as possible, saying it would seek opinions from experts such as customers, construction companies and system developers, and would formulate a revised policy in coordination with relevant ministries and agencies.
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