U.S.-Japan Business and Law by Naoko Inoue Shatz

Online Merchants and Consumers Need To Know the Rules

nospam@example.com (Naoko Inoue Shatz) — Mon, 07 Feb 2011 21:49:57 -0500

The holiday season is a time for celebrating with friends and family. It is also the time of year when retail sales are at their peak.

Until the past decade, the primary way to avoid the holiday crowds was to shop early or shop via catalogue. The advent of online shopping has enhanced significantly the options for most consumers. Anyone with access to the Internet and a credit card has countless “e-tail” possibilities.

eBay, Inc. reported revenue for the fiscal third quarter ending September 30 of $2.2 billion, excluding Skype, which was up 10% compared to the same period in 2009. Amazon.com reported net income of $231 million, or 51 cents a share, on revenue of $7.56 billion for the fiscal third quarter, up from $5.45 billion a year ago.

According to the U.S. Census Bureau of the Department of Commerce, the percentage of total retail sales through e-commerce in the U.S. has grown from 0.6% in the fourth quarter of 1999 to 4.1% in the second quarter of this year, totaling $32.9 billion. The total sales from June through August 2010 were up 4.7% from the same period a year ago. These figures are based on retail e-commerce sales, which do not include ticket sales, real estate transactions and travel services.

Certainly, e-commerce is one of the most dynamic sectors of the future economy. The industry has changed behaviors of both retailers and consumers all over the world. At the same time, the industry and related laws are still evolving, and not many consumers or retailers are familiar with regulations relating to online business transactions.

With the bar to entry so low, many would-be entrepreneurs can set up viable online businesses and conduct business worldwide with minimal capital outlay and seemingly limited oversight. Other established businesses enter this market with limited knowledge of the various rules and regulations that govern e-commerce . Consequently, both groups might inadvertently expose themselves to potential legal problems.

Below are some recent issues arising from online businesses that have triggered legal battles between online retailers and consumers.

Shipment Representation

All retailers need to manage inventory. However, online retailers also need to consider the way in which they communicate with their customers if they don’t have enough of a particular item in stock to meet an expected shipping date.

Section 5 of the Federal Trade Commission (FTC) Act prohibits unfair or deceptive acts or practices in or affecting commerce.¹ The FTC requires retailers who sell merchandise through the mail or by telephone to comply with FTC’s Mail or Telephone Order Merchandise Trade Regulation Rule.²

Under this rule, retailers must have a reasonable basis for any express or implied shipment representation, or for believing they can ship within 30 days of receipt of an order. If no shipment time is promised, retailers need to ship an order within 30 days after receiving the order.

If a retailer is unable to ship within the promised time, it must provide consumers with a delay notice, through which the retailer must give consumers the choice of agreeing to the delay or cancelling the order and receiving a prompt refund. Finally, if a company does not promise a shipping time, and a consumer is applying for credit to pay for the purchase, the company has 50 days to ship after receiving the order.

While this FTC rule is very specific and leaves little room for interpretation, many foreign online companies who target U.S. consumers fail to specify the shipment date and are most likely not aware of this rule.

Privacy Policy

While consumers enjoy the convenience of receiving merchandise through the Internet, they are increasingly concerned about online data retention policies.

In Japan, where many of my clients are located, the allowed scope of disclosure of personal information is much narrower than that of the U.S. Under the Personal Information Protection Act (PIPA) of Japan that took effect in 2005, “personal information” is defined as “information about a living individual which can identify the specific individual by name, date of birth, or other description contained in such information.”

The act requires that any entity shall not transfer personal data or information to a third party without the prior consent of the person except in special circumstances. A “third party” includes an affiliated company. That means that U.S. retailers located in Japan that target consumers in Japan cannot share personal information they obtained from individuals in Japan with their affiliated companies located in other countries without prior consent of those individuals. Any person or entity that violates PIPA can face criminal penalties of up to six months in prison and civil penalties of up to 300,000 yen ($3,000).

In the U.S., the Children’s Online Privacy Protection Act (COPPA)³ contains one of the significant rules relating to online privacy. COPPA regulates online operators whose websites are directed to children under 13 and who collect personal information from children under 13.

COPPA requires website operators to:

1) provide parents with notice of their information practices;

2) obtain verifiable parental consent before collecting a child’s personal information;

3) give parents the opportunity to prevent further use of collected information; and

4) not require a child to disclose more information than is reasonably necessary to participate in an activity.⁴

Some exceptions are provided, but the statement in a website should clearly state that the use of the site is conditioned upon the acceptance of the privacy policy. COPPA also applies to foreign websites that are directed at U.S. children.

While online operators in Japan or businesses owned by Japanese do not often include or take into consideration the regulations in the U.S., online operators in the states who target consumers in Japan are often not aware of the local regulations such as PIPA.

Advertising

The rules relating to online advertising are similar to advertisement in any business field. To maintain the credibility of marketers and bloggers as an advertising medium via the Internet, the FTC has recently revised its guidelines concerning the use of endorsements and testimonials in advertising.⁵

According to the new guidelines,⁶ endorsements and testimonials must reflect the honest opinions, findings, beliefs or experiences of the endorsers, and the endorsements may not contain any representations that would be deceptive. Some public relations firms that were hired by online retailers have posted favorable online reviews for their clients without disclosing that they were being paid to do so, as if they were regular consumers. When there is a connection between the endorsers and the online retailers, the connection must be fully disclosed, including that the endorsers received cash or in-kind payment to review products or services.

The new guidelines apply to both online sellers and advertising agencies representing the sellers. The revised guidelines also impact blogs, social networking websites, and companies that feature user- or consumer-generated content in marketing campaigns to build product and brand awareness.

The FTC has recently investigated a number of online retailers who have given gifts to bloggers. In a recent case, a PR agency hired by video game developers settled FTC charges that it had engaged in the practice of deceptive advertising.

In this case, the agency posted public reviews about the client’s gaming application. These reviews were posted using account names that would give readers the impression they had been submitted by disinterested consumers.⁷ Some companies that were targeted for investigation have not been charged with violation of the FTC rules because those companies had a policy of telling bloggers that they must disclose any gifts or a percentage of the sales they received.

Any violation of the FTC rules is subject to civil penalties of up to $16,000 per violation.

While the Internet’s global reach has made possible a cost-effective means for selling products worldwide, the rapid growth of this industry has created a new set of legal complications for both online retailers and attorneys focused on this area. These complications are compounded when an online retailer conducts business in foreign markets.

It is easy to overlook the many rules and regulations that govern this type of business in other countries. Many companies may inadvertently find themselves out of compliance with local rules and regulations. It is therefore important for these companies and the attorneys who represent them to carefully research the laws and regulations, including tax and customs requirements, of the countries in which they plan to do business.

Once a clear understanding of all laws and regulations has been established, it is also important to incorporate this information into the “Terms of Use,” “Privacy Policy” and “Intellectual Property Policy” sections of a website.

Online business can be lucrative, but it is not without risk. Careful planning and research up front can mitigate risk. It can also create a more positive business experience for both retailers and consumers.

Naoko Inoue Shatz has practiced mainly contract law and corporate law. Her client base consists primarily of companies that have business in Japan and Japanese companies located in the U.S. She is licensed in Washington and New York.

1 15 U.S.C. § 45(a).

2 16 C.F.R. Part 435.

3 15 U.S.C. §§ 6501–6508.

4 16 C.F.R. Part 312.

5 FTC File No. P034520.

6 16 C.F.R. Part 255.

7 FTC File No. 0923199.

This article has been published by King County Bar Association in December, 2010.

Setting up a Subsidiary in Japan v. Forming a Joint Venture with Japanese Partners－日本での子会社設定と日本企業との共同事業

nospam@example.com (Naoko Inoue Shatz) — Sun, 22 Aug 2010 23:52:28 -0400

There are several ways for a foreign manufacturer to do business in Japan. One of the ways to enter the Japanese market is to set up a wholly or majority owned subsidiary. Because they can have full control over the subsidiary and operate their business as they desire, this option might be the best for their long term success in the Japanese market. However, choosing this route can be an expensive and time consuming undertaking. There will often be a steep learning curve as it can take quite some time to understand the various differences between the Japanese marketplace and their own. Hiring the right employees, developing the right business relationships can also be fraught with potential problems. This method can also involve significant upfront cost and can take some time to potential payoff. Another less risky and less expensive way to enter the Japanese market is to form a joint venture with a Japanese partner or distributor. This typically enables a foreign entity to take advantage of their local partner’s preexisting knowledge base and distribution network. This method can also help them avoid the many possible pitfalls of striking out on their own without an experienced local partner and may be the fastest and least expensive way to get a product to market. This method, however, is not without its potential downsides. In order to keep their business diversified, many joint venture partners sell multiple products from competing manufacturers. It may be difficult to get a Japanese partner to give any particular product the level of focus and attention that is expected. Japanese business people often put much more stock in personal relationships than those from some other countries. Building these relationships takes time, and in the long run, lessens the potential misunderstandings and disagreements. Thus, it is important for a foreign partner to understand their Japanese counterpart and allow the relationship to develop naturally. It is also important, when moving ahead with an agreement, that every requirement and expectation is spelled out clearly in their joint venture agreements.

外国（この場合日本に対して海外〉製造業者が日本でビジネスをする方法はいくつかある。ひとつは完全所有子会社か過半数所有子会社を日本に設置することである。これによってその日本子会社が自由に外国親会社によって管理・運営されているため、長い目で見ると日本で成功するためにはこの方法が一番理想的といえる。しかし日本子会社設定は時としてとても割高かつ時間のかかる過程を要する。日本との文化や市場の違いを理解するのにも時間がかる上、業界の習得に困難がある。さらに従業員の雇用や適切な取引関係を生み出すことも容易ではない。いずれにしても子会社設定には最初は経費がかかり、それなりの利益を生み出すまでには時間がかかる。それに対して共同事業を日本企業と営む場合は比較的費用が少なくてすみ、リスクも少ない。共同事業を通して外国経営者は地元の専門家の知識・経験・人脈をうまく利用することができる。従って自分たちで子会社を通して自力で事業を開拓することによって生じえる落とし穴にはまることもなく、おそらくこの方法は外国事業者にとっては一番早く割安に事業展開ができる方法といえる。しかしながらこの共同事業にもマイナス面がある。それは多くの日本販売業者・パートナーは複数の商品を競合会社から購入販売をし、商品販売を多様化することによって自分たちの事業を守っているという点であり、それがために日本業者からある特定商品に対して期待している注目と利益を得ることは非常に難しいのである。だからこそ日本企業はその他の国に比べてさらに個人的な関係をビジネス上重視し、その個人的な取引関係を事業に持ち込むことによって競合他社に勝ち得る有利な事業関係を取得するのである。こうした関係を日本事業家と得るには相当な時間と努力を要するが、いずれはこれによって誤解や紛争を避けることにもつながるのである。従って外国事業家が共同事業を通して成功するためには日本事業家・パートナーとしっかりとした関係をもつと同時に共同事業契約書にははっきりとした期待と要求を記載する必要がある。

Corporate decision making process in Japan and its flaws - 日本の企業政策決定過程とその欠陥

nospam@example.com (Naoko Inoue Shatz) — Tue, 13 Jul 2010 14:59:17 -0400

More often than not Japanese companies have a slow decision making process in which managers do not always raise important issues they think must be addressed based on their experience and expertise. This makes it difficult to quickly respond to various problems, and when coupled with Japan’s centralized decision-making process it exposes Japanese companies to potential liability. The Japan’s centralized decision-making process is primarily designed to promote corporate harmony by building consensus among a key management group from various divisions, and problems at the corporate level are settled behind the scenes by the key management group. Although this system has historically worked well for Japan, in today’s global economy Japan’s unique decision-making style appears unsustainable. Toyota’s failure to swiftly address reports of safety problems and its poor handling of the recall issue after these reports came to light show how Japanese corporations’ emphasis on profits has caused them to overlook the necessity of creating workable action plans for resolving problems. The Toyota debacle can also be traced to Japan’s somewhat outdated decision-making system and Japanese corporations’ inability to localize its operations overseas. Yes change may come to Japanese corporations relatively soon given the pressures of today’s competitive global marketplace, as foreign governments will hold Japanese companies accountable by shunning Japanese products made by companies that are known to have covered up problems. In order for Japanese corporations to be able to quickly and effectively respond to problems that may occur outside Japan, a key management group of Japanese corporations should relax their centralized decision-making process and give managers of their subsidiaries outside Japan more power to decide important issues based on expert knowledge and experience of local counsel.

日本企業の政策決定過程に非常に時間がかかることがあるが、その決定過程において管理職員は専門化の意見に基づいて解決されるべきだと考えているにもかかわらず、その問題さえも上司に提出しないことがしばしばある。こうした企業政策決定過程は速やかな問題解決を困難にするばかりでなく、決定事項に関して日本本社に決定権を集中させた集権的管理体系をとっていると特に海外では法的責任の対象になりやすい。歴史的にこうした集権的政策決定過程は様々な部署の重役間の同意によって企業内の調和を促進し、もし問題が起これば重役員によって水面下で解決されてきた。こうした管理体系は日本では通用してきたが、今日のような国際的事業展開が一般的な時代ではなかなか健在な企業の維持が難しい。トヨタが安全面に関する問題対処を速やかにせず不良品回収が不十分だったことが公での報告がなされた後に手が打たれたことからも、いかに日本企業が利益を重視し、それがために問題解決のために必要な実践的作戦計画を立て損ねたことにつながったことを示す。またトヨタの失敗は日本企業の少し時代遅れの決定過程方法に帰着し、海外企業運営におけるその地域と国に根ざした経営適用の欠陥を象徴しているといえる。しかしながら、問題を水面下で処理することで知られている日本企業製造商品を回避することによって海外政府が日本企業に責任を課すようになってくるにつれ、日本企業管理方法にも変化がもたらされるであろう。日本企業が海外事業展開において迅速かつ効率的に問題対処できるようになるためには、日本本社の重役員が集権的決定方法を和らげ、海外管理職員にできる限りの決定権を与えることが必要である。特に重要問題決定の際、その土地と国の専門家の経験と知識を基にした判断が必要であることを理解すべきである。

Japanese corporate clients facing litigation with a U.S. company - アメリカ企業との訴訟に直面する日本企業の対策について

nospam@example.com (Naoko Inoue Shatz) — Thu, 13 May 2010 17:59:08 -0400

Japanese corporate clients are often surprised at the amount of time involved in investigation and associated legal fees required in the process of litigation in the U.S. In Japan, where the legal system is filled with devices that deter litigation, pre-trial discovery is severely limited. Interrogatories, depositions and requests for admission are unavailable, and requests for production of documents are restricted. However, in the US, where the discovery process is embedded into the adversarial system, cases with higher discovery volume generate more motions and consequently increase the litigation costs. Japanese corporate clients who are facing litigation with a US company would benefit from retaining US counsel to assess the case and control costs of discovery process. That can cut litigation costs and increase the likelihood of a favorable result for the Japanese corporate clients.

日本企業のクライアントはしばしばアメリカとの訴訟にあったって調査の量とそれにかかる費用に驚くことがある。訴訟を避ける傾向にある日本では、裁判前の調査の方法に限りがあり、例えば、質問書、宣誓証言や自白要求等をかなり制約している。それに対して、証拠開示手続きが対審主義に組み込まれているアメリカでは、証拠開示の際の提示資料の量が非常に多く、それによって申請量が増え、結果的に訴訟にかかる費用がかさむことになる。アメリカ企業との訴訟に巻き込まれた場合は、日本企業は、米国の専門弁護士に案件の管理と証拠開示にかかる費用の管理をさせることによって訴訟にかかる費用を抑え、利益を得ることができる。また、それによって勝訴の可能性も高めることができる。

Selling goods through an agent vs. selling goods through a distributor -代理業者を通しての商品販売と販売業者を通しての商品販売

nospam@example.com (Naoko Inoue Shatz) — Mon, 24 Aug 2009 12:35:05 -0400

The benefit of having an agent selling goods is that the agent does not necessarily have an ownership right /title to the goods a manufacturer owns. The agent does not usually bear risk of loss on credit sales or a loss from unsold goods. The agent is usually paid by commission in addition to a base salary, depending upon the amount of sales as well as a commission rate. However, a manufacturer sometimes chooses to have a distributor who has an ownership right/title to the goods because the distributor generally has a sophisticated system of selling the goods, which can result in substantial sales of the goods. That means that the distributor is free to sell goods to anyone they choose without contractual restrictions. Thus, the manufacturer might want to consider having a well drafted distributorship agreement with the distributor, which restricts the distributor from handling goods that compete with the goods the manufacturer sells. The manufacturer may also need to set a territory and resale prices among distributors. It should also be noted that certain restrictions to the distributors’ activities may violate the antitrust law.

代理業者を通して商品売買をすることの利点は、代理業者は商品に対する所有権を保持していないため製造者は商品所有権を握り続けることができるということである。代理業者としても売れなかった商品や未払いの商品を買い取る必要も責任を取る必要もないため、資本の少ない業者にとっては代理業者としての業務はリスクが少なく理想的である。しかしそれにもかかわらず製造業者は販売業者を通して商品販売を展開することがある。販売業者は組織的な商品販売をすることができることが多く、仮に商品所有権を販売業者に譲ったとしてもそれ以上に見合う利益が予想されるからである。製造業者にとって重要なことは、販売契約上競合禁止条項や販売領域を設定し、ある程度販売業者の営業範囲を制約することである。これによって製造業者の商品に対する販売権利と所有権を統制することができる。なお販売権利の統制の範囲と度合いによっては独占禁止法上の問題になりかねないという点にも気をつけるべきである。

What are the options for Japanese companies to do business in the U.S. effectively? - 日本企業がアメリカで有効に事業をするための選択肢

nospam@example.com (Naoko Inoue Shatz) — Wed, 03 Jun 2009 20:15:00 -0400

Japanese companies mainly have eight (8) ways to do business in the U.S.

Use of contracts (for purchase and sale of goods, manufacturing, construction, lease, financing, license, services, management, etc.).
Agency (dairi)-Branch office. The agent acts under the name of and on behalf of its foreign principal.
Distributorship. A contractual relationship entered into for the purpose of purchasing goods and services from the contracted foreign business source and distributing them to third parties. This option is good for exporting goods from the U.S.
Partnership agreement.
Joint venture agreement.
Direct and indirect investment in a business entity.
Franchising agreements and voluntary chain agreements. Due to the increasing popularity of these forms of business operations, special consideration will be given to them.
Subsidiaries.

Recently, there are a growing number of Japanese companies choosing to set up their subsidiaries in the US because setting up a separate entity will give them greater protection against liabilities of their parent companies.

日本の企業がアメリカとかかわる事業を行う場合、主に8通りの方法がある。 1．アメリカ企業との契約による事業活動と市場開拓。この場合、業務上の支配力は契約書によって決まる。 2．アメリカ駐在の代理店を通して他のアメリカ企業との取引および市場開拓。 3．アメリカ企業との販売代理店契約を通して他のアメリカ企業と販売契約。 4．アメリカ企業と合名会社契約を結び、共同でアメリカ市場を開拓。 5．アメリカ企業との合併による事業活動および市場開拓。 6．アメリカ企業への投資。 7．アメリカでのフランチャイズ展開。 8．アメリカに子会社を設立し親会社との連結を通してアメリカでの事業活動および市場開拓。最近はアメリカで日本企業相手の訴訟が増えてきているため、本社と法律上隔離した子会社をアメリカに組織設定することによって親会社への賠償責任の限定を目的とした日本企業のアメリカ進出が増えてきている。

Personal Information Protection Act and a confidentiality provision-日本の個人情報保護法と秘密保持条項

nospam@example.com (Naoko Inoue Shatz) — Mon, 11 May 2009 20:14:00 -0400

The Personal Information Protection Act under the Japan Law has become very important for Japanese companies when a business transaction with a US company involves handling individuals’ information such as call center services. Under the Act, “personal information” means “information regarding a living individual that contains such name, date of birth, or other descriptive information as will enable identification of the individual.” The Act applies to any “business handling personal information,” and a breaching company is subject to a criminal penalty and/or a fine. Although forming a written contract is not as common as companies in the U.S., nondisclosure agreements are commonly used with employees, independent contractors and in contracts involving the company’s customer list. Furthermore, with the increasing number of people who leave companies before the retirement it is becoming more common for Japanese companies to provide non-compete agreements with employees.

日本の個人情報保護法は日本企業がアメリカ企業と契約を交わす際に非常に重要な法律となってきている。特にコールセンターサービスなど業務が個人情報を扱うような内容であればなおさらのことである。この法律上、“個人情報“とは個人の名前、生年月日、または身分証明となるいかなる個人情報を含む。この法律は個人情報を扱う企業活動においても制約され、規定を破ると処刑の対象になったり罰金を課されたりする。日本ではアメリカほど正式文書の契約は一般的ではないが、ＮＤＡや雇用契約書、または個人情報を扱う業務の契約書に関してはかなり敏感である。さらに最近は定年退職以前に退職する社員の増加に伴って、競合禁止契約書を結ぶ際にこの個人情報の扱いに関して規定することも多くなった。

Potential discrimination claims related to rotating staff-駐在員と現地採用社員との関係と差別問題

nospam@example.com (Naoko Inoue Shatz) — Mon, 11 May 2009 20:13:00 -0400

Japanese subsidiaries of the US that hire rotating staff from their home country may face lawsuits over rotating staff in discrimination against U.S. citizen employees. Rotating staff are usually citizens of the home country, hired by their parent company but assigned to the U.S. (overseas) for a certain period. The pay differentials and different type of promotions between rotating staff and U.S. citizen employees have been challenged in the past. Based on the past cases related to employment discrimination against U.S. citizen employees, however, it seems clear that treating rotating staff as employees of their parent company, as opposed to their U.S. subsidiary, will decrease the parent’s exposure to discrimination claims.

アメリカに所在する日本企業の子会社で働く日本人役員・社員は通常日本から派遣された駐在員で、アメリカ現地で採用された社員との関係において差別問題が生じることがしばしばある。日本人駐在員は通常ある程度アメリカ子会社で働いた後日本の本社に戻る社員であるが、その社員に対する給料体系や昇格に関する規定が違うため、アメリカ現地採用の社員から過去に訴えられたことがあった。しかしどの訴訟も日本企業側が勝訴しており、それは駐在員と現地採用の社員とはもともと雇用形態が違うという理由からである。従って、日本企業は駐在員を現地子会社の社員としてではなく日本の本社採用の社員として扱うことがこうした差別にかかわる問題を避けることになる。

Why do Japanese companies want to continue expanding their business in the U.S.?-なぜ日本は今後も海外進出したいか？

nospam@example.com (Naoko Inoue Shatz) — Mon, 11 May 2009 20:12:00 -0400

Like the U.S., Japan has gone through a serious recession in the past year. It seems, however, that the fact that the population is shrinking faster than the slow GDP growth – Japan has a higher GDP growth per capita than the United States, even though the US GDP growth is higher than Japan's— may help them recover quicker than the rest of the countries in the world. With the sharp decline in Japan’s population and an extremely low level of immigration, they are now concerned about where their businesses go in the next twenty years. The first question is whether the government should put emphasis on nurturing business that create long-term domestic demand, such as in medical services, nursing care and information technology. There is no question Japan as well as U.S. has to take steps internally to try to stimulate demand and to look at how to diversify their own economies. The second question is whether Japanese companies should continue to expand their businesses overseas that allow them to bring extra revenues into Japan. It seems clear that they need to continue relying on export business to offset the sharp decline in domestic demand. In the past couple of years, at least, rapid export growth played a crucial part in boosting industrial production and so company profits.

アメリカと同じように、日本でもこの１年間不景気が日本の経済に影響を及ぼしている。しかし日本は人口減少によって１人あたりの国内総生産量の伸びがアメリカよりも高いため（アメリカの総生産量の伸び自体は日本よりも早いが）、世界のどの国よりも景気回復が早い可能性がある。そこで日本の問題は、こうした人口減少と少数の移民によって需要と供給の不釣合いが生じるため、この先２０年間の間にどのようにして経済を伸ばすかということである。最初の課題は、医療業務や介護業務などの国内産業をどのようにして支えていくかということで、こうした産業は長い目で見た国内の重要な産業として伸ばしていく必要がある。二番目の課題としては、日本ははたして海外業務を引き続き伸ばしていくべきかということである。これに関しては日本の人口減少やそれに伴う国内での需要減少を相殺するためにも輸出に依存せざるをえないと考えられる。少なくとも過去２年間は輸出によって日本の産業がうるおっていたことは確かである。

Legal obligation in terminating temporary workers-一時的契約社員に対する差別法の適用

nospam@example.com (Naoko Inoue Shatz) — Fri, 09 Jan 2009 20:11:00 -0500

In the U.S., the discrimination laws that have been established by EEOC may come into play when an employer discharges temporary workers. For example, employers will be legally responsible as “an employer” for temporary workers who were hired through a temporary agency, as long as the employers exercise control over the temporary workers’ assignments. However, temporary workers are not subject to the same degree of protections against discrimination if they are treated as “an independent contractor.” A temporary worker is treated as an independent contractor if an employer had no ongoing relationship with the worker, did not pay the worker based on the hours worked, and had no authority over hours, assignments or other aspects of the means or manner in which the work was achieved. Unfortunately, most of the temporary workers hired by Japanese companies in the U.S. are considered employees. That said, employers should be aware of the discrimination laws when they discharge temporary workers, just as they are with regular employees.

アメリカの雇用者が一時的被雇用者の解雇をする場合は、ＥＥＯＣによって制定された差別法が適用される。例えば、雇用者がリクルーターを通して一時的に雇った契約社員であるにもかかわらず、管理と割り当てた業務の内容や度合いによっては正社員として契約社員を扱ったことになり、この場合雇用関係問題があった場合は差別法が適用される。しかし雇用者が一時的雇用の契約社員を独立契約者として仕事の役割や管理をすれば、ある程度差別による問題を避けることができる。一時的雇用の契約社員が独立契約者として扱われるためには、働く時間帯や時間量、業務の内容や手続きに関しては雇用者の管理下にはなく、独立した立場で仕事の流れを管理することになる。残念ながら現在は、アメリカ企業も含め、日本企業によって雇われる一時的雇用の契約社員はたいがい"正社員“として扱われる。従って、企業としては解雇する際には差別問題等を十分気をつけなければならない。

60 trillion yen is reserved in cash by some rich Japanese companies-６０兆円を所有する日本企業

nospam@example.com (Naoko Inoue Shatz) — Mon, 03 Nov 2008 20:06:00 -0500

According to the Asahi Shimbun posted on October 31, 2008, (http://www.asahi.com/english/Herald-asahi/TKY200810310096.html) overall tax revenue for fiscal 2008 will fall more than 5 trillion yen short of the government's 53.5-trillion-yen estimate, due mainly to poor corporate performances. A stronger yen has hurt export revenues, and the U.S. economic downturn has been blamed for the poor performances. However, Japanese public companies are sitting on cash reserves of more than 60 trillion yen. What that means is that those Japanese companies can afford to acquire other companies, which will provide them with the chance to expand their businesses overseas while many U.S. companies are facing the financial crisis.

２００８年１０月３１日の朝日新聞によると、企業の経営状況悪化によって２００８年度の税金収入が前年度予測の５３．５兆円に対して５兆円以上不足すると想定されている。これは主に円高によって輸出業からの収入が大幅に減ったのとアメリカの経済不況の影響だとされている。それにもかかわらず、ある日本公営・一部上場企業は６０兆もの現金を所有していることがわかった。従って、そのような企業は他企業を買収する経済力を持っており、アメリカが不況に悩まされている間に海外への産業進出・強化を可能にするわけである。

Negotiating a termination clause with a Japanese company-日本企業との契約終了と契約期間に関する条項・条件

nospam@example.com (Naoko Inoue Shatz) — Tue, 21 Oct 2008 19:53:00 -0400

In Japan, some courts have held that a termination clause will be considered to last for an indefinite term even if parties have renewed the agreement several times regardless of whether the agreement was for a definite term and had a non-renewal clause. Japanese companies often prefer a termination clause in which the agreement is automatically renewed without notice after a certain period. This may be expected even though the provision requires a party to give notice of its intention not to so renew or to renew prior to expiration of the term. They view the termination clause as a token of their relationship with the other party. On the other hand, U.S. companies tend to look at the termination clause as a tool for allowing them to get out of the agreement in which each party may terminate the agreement without cause and without prior notice or each party may refuse to renew the agreement by giving notice prior to the expiration date. This may be because the U.S. companies value the language of an agreement over their instinctive sense of trust and view any new transaction with a short term goal, while the Japanese companies intend to nurture their relationship and set out a long term goal with the U.S. companies. Accordingly, particular attention should be paid to whether a party’s intent is beyond what is stated in the agreement especially if the Japanese law is controlling.

契約終了時と契約期間に関する条項については、仮に契約書に期間と終了時が明記されていてお互いの企業が更新の意思と通告をするよう規定されていても、日本のビジネスでは自動更新が主流である。結果的に問題がなければ暗黙の了解としてそのまま永久に関係が続くということである。しかしアメリカ企業は契約終了とその期間に関する条項をビジネスの見直しをする都合のよい道具として扱い、仮に期限が満期になっていなくても理由があろうとなかろうと契約を解除しえる表現を好む傾向がある。これはアメリカ企業は営業上の本能的センスや信用よりも交渉によって築き上げられた文書契約を守るほうが重要だと判断するからであり、日本のビジネスで通用するような多少の欠陥があったとしても目を瞑り、信用・信頼によって長い付き合いをするという方針の経営方針とは異なる。従って、契約書の交渉においては契約書上の言葉以上にお互いの意図と目的を十分に知ってておくことが重要である。

Scope of Indemnification Clause - 損害賠償責任の範囲と内容

nospam@example.com (Naoko Inoue Shatz) — Tue, 21 Oct 2008 17:22:00 -0400

The main purpose of an indemnification clause is to minimize risks of incurring losses if a seller does not perform in accordance with the obligations of an agreement or if the seller breaches what it disclosed in the representations and warranties. Thus, the indemnification clause will provide a buyer with some degree of legal protection, in the unlikely event that any legal issues arise with respect to the seller’s business activities especially in a M&A transaction. Below are the important points you should keep in mind when you review an indemnification clause in the M&A transaction.

1. Scope of Indemnification - a) The clause should cover all kinds of actions, such as claims, demands, costs or judgments against you. This would include a settlement or a court award, directly or indirectly incurred in connection with any inaccuracy, misrepresentation or default or warranties given by the seller in the Agreement. b) The clause should cover items that are disclosed in the seller’s representations and warranties for which the seller retains responsibility after the closing.

2. Duration - a) Generally, an indemnification time period should be one to three years after the closing. Exceptions may be made for environmental and tax liabilities, for which the time period may be the applicable statute of limitations.

3. Indemnifying parties - a) The indemnification clause must include proper parties, that includes third parties, such as shareholders, agents, employees and affiliates who could possibly be subject to the said transaction.

4. Basket - a) The seller could be liable for the total amount of the losses, but does not have liability until the amount of the buyer’s losses exceeds a certain sum when there is a basket of a certain sum. The amount of the basket should be carefully negotiated through the buyer’s due diligence investigation.

5. Escrow - a) The buyer may require that a portion of the purchase price be held in escrow to ensure that there are enough funds available to satisfy the seller’s indemnification obligations. The amount of the escrow should be carefully determined after examining the value of the property /company.

6. Limitation on Liability and Remedy - a) For the seller, it is important to limit its post-closing indemnification obligations in several ways: 1) The seller will try to limit the time period after the closing for which it has indemnification obligations; 2) the time period should be based upon a reasonable period of time within which a third party would make its claim, 3) the seller will try to impose a cap on the total amount of its indemnification liability, and 4) the seller will try to negotiate a basket on its indemnification obligations, in order to eliminate small indemnification claims. b) For the buyer, it is important to renegotiate the terms and conditions or hold back a portion of the purchase price, if the seller does not have sufficient funds available to satisfy the seller’s indemnification obligations. The buyer also needs to secure its interests or prospects of future business, after closing, and take into consideration the seller’s potential liabilities, which may only have been revealed after the closing.

企業の買収や吸収合併における損害賠償条項の主な目的は、売り手企業が約束した条件や企業の内容に関して偽りがないことを補償することである。従って買い手企業にとっては売り手企業の経営内容に問題があった場合はこれを売り手企業の責任とすることができ、買い手のリスクを減らすことができる。下記は損害賠償条項をレビューする際に知っておくべき重要な点である。

１．損害賠償の範囲 a.　条項が法的措置にかかわるさまざまな問題を対象にしていること。法的措置として売り手企業の企業内容の偽りや問題によっておこされた訴訟やその他法的措置の際に費やした費用も含む。b. 条項が売り手企業に関係してクロージングの後に生じた法的問題もカバーしていること。

2．期間 a. 損害賠償の期間は通常クロージング後1年から3年間有効とされている。ただし税金関係や環境問題に関連する問題み関しては期間的には例外とされることもある。

3. 損害賠償責任を負う当事者 a. 企業活動において法的責任を負うべき当事者を把握しておくこと。これは支社・子会社・企業と契約を結ぶ第三者を含む。

4．バスケット a. クロージング後、買い手企業の損失がある一定の額を超えない限りは売り手の債務はないとする。その定められた一定の額をバスケットという。この損害賠償額については売り手と買い手の交渉次第では、売り手は損害総額を支払うこともある。

5．第三者預託 a. 買い手企業は売り手企業になんらかの問題があった場合に支払う費用としてその費用を第三者に委託管理させることもある。この額は通常売り手企業の資産によって決められる。

6．賠償と債務の限 a. 売り手企業にとってはクロージング後の賠償責任に関する制限を設定することは非常に重要である。その制限方法として、１）賠償責任の期間を制限する、2）期限は第三者が売り手企業を告訴する可能性のある期間とする、3）賠償責任額の制限をする、４）小さな問題に関して賠償責任を負うことよりも、バスケットをもうけて大きな問題の賠償責任のみを補償する交渉を買い手とすること。 b. 買い手企業にとっては契約の条件や買収額をいつでも交渉できるようにしておくことが重要である。これは売り手に損害賠償責任を負うだけの十分な資産がない場合には特に重要なことである。買い手企業としては、将来の業務をスムーズに運営することを確実にするとともに、クロージング後に浮上しえる売り手の法的問題も考慮に入れることである。

Best efforts that may create an unfair imposition-不可抗力に関する契約条項と復興に対する最大限の努力

nospam@example.com (Naoko Inoue Shatz) — Mon, 20 Oct 2008 19:49:00 -0400

The language in a Force Majeure provision focuses on events that make it impossible for a company to provide services due to acts of God, war, terrorism, government regulations, disaster, strikes, fire, civil disorder, curtailment of transportation facilities, or other similar cause beyond the control of the company. Under that provision, some companies are under an obligation to use their best efforts to continue to perform or cure. For example, you, as a service provider, might be forced to cure or perform your services even after a typhoon hits a city where your service facility is located. Others are, however, required to use only reasonable best efforts, commercially reasonable efforts or reasonable efforts. Obviously, the best efforts impose a higher level of obligation on a service provider than any other efforts. If the other company insists, during negotiations, that you be required to use "your best efforts" as opposed to "commercially reasonable efforts", you should make yourself aware of the subtleties provided in the Force Majeure provision.

契約書上の不可抗力に関する条項では、さまざまな天災等による緊急事態が生じた際の対応を説明する。こうした　緊急事態が生じた場合は、すみやかに業務が復興するよう企業は最大限の努力をするよう求められることが多い。例えば、台風が市全体に打撃を与えた場合、企業は業務に必要な設備を整えて業務が速やかに再会する努力をする必要がある。しかしながら、契約上企業の責任と努力の度合いを調整することもある。最大限の努力という表現の代わりに、“商業的な面から見ての努力”や“妥当な努力”という言葉を使うことによって天災等の被害にあった企業の責任負担を軽くすることが可能である。もし契約相手の企業が“最大限の努力“という表現を契約上残すことを主張した場合は、事前にその努力の度合いと限界を明確にしておく必要がある。

Negotiation of agreements with Japanese companies-日本企業との契約書交渉

nospam@example.com (Naoko Inoue Shatz) — Fri, 17 Oct 2008 19:46:00 -0400

In a cross border transaction with Japanese companies, Western/American companies are often confused by how the Japanese approach business transactions; the Japanese do everything they can to retain the relationship for operating their businesses abroad, despite their passive predisposition. In addition, Japanese business people tend to emphasize trust over formal written agreements in order to maintain a good business relationship. As a result, the Japanese put less effort into how they should craft an agreement than their effort of how they finalize a deal, and it takes time to make them understand the need for certain provisions in the agreement. Unfortunately, Western business people often interpret their approach as a flaw of their business model. Any cross border business transaction requires understanding of the other’s culture and patience. Western business people are also encouraged to recognize these differences and nurture their relationship with Japanese companies besides their binding relationship under the agreement.

日本企業との海外商取引において、欧米の企業は日本人のビジネスマナーに困惑することがある。日本人は一般的に受身であるが、海外の商業取引に関しては関係を保つために予想以上の努力をすることが多い。またそうしたいい関係を保つためには紙の上での契約書よりも信頼に重要さを感じる傾向がある。従って、欧米企業が契約書上の表現を精査・変更をすることに関しては日本人はなれないこともある。残念なことにこうした日本人の傾向に関しては欧米人は商業取引に関する日本人の弱点と解釈することがしばしばある。どのような海外商取引に関してもそれぞれの国の文化とビジネスのしきたりを理解する必要があり、日本人同様欧米人も相手の国の商業関係の成り立ちと文化を学ぶことが重要である。