When a Customer Raises Spurious Objections and Refuses to Pay | Burden of Proof and How to Answer Under Japanese Law

The goods are delivered, the works are complete, the invoice is issued — and then, out of nowhere, the customer says the quality was defective, the quantity was short, a discount was agreed orally, it has a cross-claim to set off, or that it has already paid. Businesses trading with Japanese companies meet this pattern often. Some such objections are genuine. Many are simply a means of deferring payment. What follows explains, under Japanese law, who must prove what, how each objection can be answered, and what to do when negotiation stalls.

Contents

Begin by asking who bears the burden of proof
Liability for non-conformity with the contract
Answering a defence of set-off
Assembling the evidence
When to move to litigation, and provisional attachment
Conclusion
How to contact us

Begin by asking who bears the burden of proof

Civil cases in Japan are largely decided by the allocation of the burden of proof. A creditor claiming the price of goods or the contract price for work must plead and prove two things only: that the contract was concluded, and that it performed — that the goods were delivered or the work completed. That is the whole of the claim. Everything the other party then raises is a defence, and the burden of pleading and proving it falls on the other party.

Defective work or non-conforming quality — the non-conformity must be proved by the other party.
Short delivery — the shortfall must be proved by the other party, though the creditor is well advised to establish delivery itself by delivery notes and inspection certificates.
An oral agreement to reduce the price — a variation of the price must be proved by the party asserting it, and an unwritten variation is rarely accepted by a Japanese court.
A cross-claim to be set off — the existence, the amount and the maturity of the claim relied upon must all be proved by the other party.
Payment already made — discharge must be proved by the other party, ordinarily by a transfer record or a receipt.

The creditor’s position therefore reduces to two facts: delivered, and unpaid. It is worth setting out that allocation expressly in correspondence while the matter is still at the negotiating stage.

Liability for non-conformity with the contract

The Civil Code of Japan was amended with effect from 1 April 2020, and what was formerly warranty liability for latent defects (kashi tanpo sekinin) is now liability for non-conformity with the contract (keiyaku futekigo sekinin). Where the subject matter does not conform to the contract in kind, quality or quantity, the other party may demand cure, a reduction in price, damages, or termination. But these are matters the other party must raise and prove; the creditor is under no obligation to demonstrate in advance that its performance was flawless.

Time limits matter here. Under the Civil Code, a buyer who does not notify the seller of a non-conformity within one year of becoming aware of it is, as a rule, barred from relying upon it. Between merchants the Commercial Code of Japan (Article 526) is stricter still: the buyer must inspect without delay upon receipt and give immediate notice, and for non-conformities that cannot be discovered immediately the outer limit is six months from receipt. Where the objection surfaces for the first time months after delivery, this is often the strongest answer available.

Answering a defence of set-off

Set-off under Article 505 of the Civil Code requires mutual obligations of the same kind, and the claim relied upon for set-off must have fallen due. A vague assertion that “you caused us loss as well”, without identifying the cause of action, the amount and the dates, is not an effective set-off. Ask for the cross-claim to be particularised in writing and for the supporting documents to be produced. In practice the objection frequently collapses at that point, because there is nothing to particularise.

Assembling the evidence

Delivery notes, inspection certificates and completion confirmations — proof of delivery and completion; those signed or sealed by the other party carry particular weight.
Email and messaging correspondence — above all the exchanges between delivery and the first complaint, which show that nothing was said at the time.
Telephone logs and recordings — a recording made by one of the parties to the conversation is ordinarily admissible in Japanese civil proceedings.
Part payment — a payment on account of the same claim is an acknowledgement of the debt, and sits badly with a later assertion that nothing was owed or that everything had been paid.
Quotations, purchase orders and specifications — the benchmark against which quantity and quality are measured.

When to move to litigation, and provisional attachment

Negotiation should be given a deadline. The following are practical signals that the time to issue proceedings has come.

The objections shift, or a fresh reason appears at each exchange.
No concrete material is produced in support of the objection, despite request.
Two or three months pass with nothing but “we are looking into it”.
Extinctive prescription is approaching (as a rule five years from the time the creditor knew that it could exercise the right).
There are signs that the other party’s financial position is deteriorating.

Where the objections are plainly a delaying tactic and there is a risk that assets will be dissipated, provisional attachment (kari-sashiosae) should be considered before proceedings are issued, freezing bank deposits, accounts receivable or immovable property. The applicant must show a prima facie case both for the right to be preserved and for the necessity of preservation, and must deposit a security bond with the Legal Affairs Bureau (in practice commonly 10 to 30 per cent of the sum claimed). Once granted and executed, a provisional attachment places the other party’s cash flow under pressure, and a party that has been stalling often becomes willing to negotiate in earnest.

Conclusion

An objection raised in bad faith rarely survives a written demand for particulars and documents. Delay, by contrast, works against the creditor: the other party’s assets diminish and prescription runs. We are able to act for clients outside Japan by email and online meeting, from the first demand through to provisional attachment and compulsory execution.

How to contact us

Telephone 03-6435-8418 within Japan, or +81-3-6435-8418 from overseas. Lines are open from 08:00 to 24:00 Japan time, including Saturdays, Sundays and public holidays. Enquiries are also received at any hour through the form on this site.

M&A Partners Law Office LPC　Katsuhiro Tsuchiya, Representative Attorney-at-Law (Tokyo Bar Association, Registration No. 26775)　17F Mori Trust Shiroyama Trust Tower, 4-3-1 Toranomon, Minato-ku, Tokyo, Japan

This article is a general explanation based on the laws and practice of Japan as at August 2026 (Reiwa 8). The outcome of any particular matter depends on its own facts, and no specific result is guaranteed.

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