Concerning marriage partner introduction service contract, application of the cooling-off rule after cancellation of the contract was affirmed because of inadequacy of the document

The following case is concerned with a marriage partner introduction service contract. After cancelling the service contract, a consumer claimed application of the cooling-off rule because of inadequacy of the document delivered. The court affirmed validity of applying the cooling-off rule to the whole contract on the grounds that services other than specified continuous services prescribed in the Act on Specified Commercial Transactions (e.g. matchmaking tour, wedding tour, etc.) are also construed to be included in the above-mentioned contract and ordered the business to return all the contract money to the consumer. (Judgment by the Tokyo High Court on September 22, 2010)

The judgment has not been published.

Summary of the case

Plaintiff, appellant:: X (Consumer)
Defendant, appellee:: Y1 (Marriage partner introduction company)
Defendant, appellee:: Y2 (President of Y1)

In this case, X claimed payment of 3,708,000 yen, the total amount paid by X to the company Y1 as well as delay damages against Y1 as the primary claim^* on the grounds that the marriage partner introduction service contract made between X and Y1 includes marriage partner introduction, overseas matchmaking tour and wedding tour and that X had cancelled the contract using the cooling-off rule based on the Act on Specified Commercial Transactions. X also claimed a refund of the initial fee and so forth against Y2 as the secondary claim^* on the grounds that if the wedding tour had been covered by another contract, it was construed that Y1 had unjustly gained the fee for the cancelled wedding tour.

X was a then-51-years-old man, company employee. Y1 is a company providing marriage counselling and matchmaking service, etc.

On January 13, 2007, at the office of Y1, X entered into a one-year contract for marriage partner introduction service (initial fee: 357,000 yen / monthly membership fee: 8,000 yen) which includes viewing wedding information, matchmaking parties, association with potential marriage partners, and getting advice on marriage, with a condition that Japanese women will be introduced as potential marriage partners.

Y1 provides a system by which registered members can search potential marriage partners via the Internet. While X was searching potential marriage partners using a PC at home, a contact person of Y1 recommended X to marry a Chinese woman. In March, 2007, the contact person recommended X to join a matchmaking tour to Shanghai. X decided to join the tour, paid the tour fee of 157,500 yen, and joined the tour from May 3 to May 5.

After returning to Japan, on May 19, X signed a pledge to marry the Chinese woman who X had met during the tour. On May 26, X paid 3,097,500 yen to Y1 as the wedding ceremony fee to have a wedding ceremony at Shanghai and the wedding tour fee.

At a later date, however, X called off his engagement. On June 2, 2007, X demanded Y1 and Y2 to refund the wedding ceremony fee and the wedding tour fee because of the disengagement, but the request was rejected.

X notified Y1 with a document sent on July 14 through a procedural attorney that X would apply the cooling-off rule to the contract and claimed a refund of the amount paid on the grounds that, although the service contract correspond to the category of specified continuous services prescribed in the Act on Specified Commercial Transactions, the document delivered does not indicate items specified by the Act on Specified Commercial Transactions including the cooling-off rule, the service period, midterm cancellation, how to clear charges, etc. The original judgment dismissed a part of the X's claim, and X appealed against the sentence.

Key points at issue included the following:

Whether or not the cooling-off rule can be applied to the contract
Whether or not the matchmaking tour and the wedding tour were covered by the service contract

^* It is one of the claiming methods used for civil cases. The top priority claim is asserted as "the primary claim" in the court. In case that the primary claim has not been affirmed or has been partly affirmed by the court, "the secondary claim" is presented. If the primary claim has been affirmed by the court, the secondary claim is not considered by the court like the case here.

Reasons

The court affirmed X's whole claim against Y1 (the primary claim) as follows. The court did not affirm X's claim against Y2 (the secondary claim), construing that there is no reason for it.

(1) Is it possible to apply the cooling-off rule?

Although X had withdrawn from the membership, it is construed that the cooling-off period for the contract has not passed due to inadequacy of the document delivered. If so, not only does the cooling-off rule release the consumer from restriction of the contract, but it also protects the consumer (e.g. ensuring refund of the amount paid). Therefore, it is not reasonable to limit the period for exercising the cooling-off right up to the end of the contract.

In light of the above, it is construed that X can apply the cooling-off rule to this contract with Y1, even after X withdrew from Y1's membership.

Y1 alleges that exercise of cancellation right after marriage engagement is regarded as abuse of right and is not allowed under the principle of good faith. The engagement between the two, however, is not recognized. There is no evidence to approve that X's exercise of cancellation right for the contract is against the principle of good faith or is regarded as abuse of right.

(2) Are the matchmaking tour and the wedding tour covered by the service contract, or covered by another contract?

As clarified under Article 48 (1) of the Act on Specified Commercial Transactions, in case where a contract includes specified continuous services prescribed in the Act and other services or goods, it cannot be construed that services written on the contract should be divided into two categories nor that the cooling-off rule can only be applied to specified continuous services prescribed in the Act.

The services specified by the contract include not only the marriage partner introduction service but also the matchmaking tour and the wedding tour. Therefore, all the services shall be subject to the cooling-off rule.

Some may point out that application of the cooling-off rule to services other than specified continuous services means disregard of Article 48 (2) of the Act on Specified Commercial Transactions and that it is unreasonable. In the first place, however, the company had chosen such a form of contract, so it cannot be said unreasonable.

Explanation

Concerning the marriage partner introduction service contract, which is a contract on specified continuous service offers, the consumer alleged application of the cooling-off rule claiming that the cooling-off period had not passed even after using some services because of inadequacy of the document delivered (The document lacked some of the statutory entries, while including descriptions disadvantageous to consumers, which is against the regulation) and demanded refund of the total amount paid. In this case, the court affirmed the claim.

A series of precedents has affirmed application of the cooling-off rule to contracts even if eight or more days passed from the contract day in case of inadequacy of statutory entries on the document delivered.

In the case shown here, the document lacked a fundamental part of statutory entries such as the cooling-off rule, midterm cancellation and how to clear charges. Naturally, application of the cooling-off rule was affirmed.

This case was characteristic in that one of the issues was whether or not the whole set of contract can be treated as one contract on specified continuous service offers when the marriage partner introduction service contract includes the matchmaking tour and the wedding tour.

If the whole set of contract can be treated as one contract on specified continuous service offers, all the services shall be subject to the cooling-off rule, cancellation, midterm cancellation, etc., which offers a big advantage for relieving consumer damages.

The court stated a clear decision: "In case that a contract on specified continuous service offers includes specified continuous services prescribed in the Act on Specified Commercial Transactions and other services or goods as a set, it cannot be construed that the set of contract should be divided into two categories nor that application of the cooling-off rule is limited to the specified continuous services".

This idea has been commonly used in the working level of counseling service. In the judicial precedents, however, the idea was seldom seen before. This judgment can be a good reference for solving similar cases.

In the case here, Y1 alleged that X had withdrawn from the membership because X had found a marriage partner and that there was no room for the cooling-off rule. The engagement, however, had been broken, so the court naturally judged that application of the cooling-off rule was possible within the valid period even after offering the services.

Incidentally, concerning renovation contracts made through door-to-door sales, there are quite a few judgments which affirmed application of the cooling-off rule after completion of renovation work.

The Act on Specified Commercial Transactions prescribes as follows: "If the existing state of the Purchasing Party's land, building, or any other structure was change, the Purchasing Party may demand that the Service Provider or the seller of the Designated Rights take the necessary measures to restore it to its original state at no charge" (Article 9 (7)). Naturally, application of the cooling-off rule is possible even after offering services.

Reference precedents

The following are judgments concerning application of the cooling-off rule after offering services.

Judgment by the Kobe Summary Court on January 30, 1992
(Page 140 of Hanrei Jiho No.1455)
Judgment by the Tokyo District Court on August 30, 1993
(Page 252 of Hanrei Times No.844)
Judgment by the Tokyo District Court on September 2, 1994
(Page 92 of Hanrei Jiho No.1535)
Judgment by the Tokyo District Court on August 31, 1995
(Page 214 of Hanrei Times No.911 concerning door-to-door sales of roof repair work with steel plates)

Judgments