The Tajimi branch of the Gifu district court, on 19th Jun 2007, provided interesting ruling concerning a consumer credit contract by which the purchaser was financed from the creditor connected with the distributor who scammed the purchase.
Fact
The defendant was purchaser of a movable store building from a supplier connected with the plaintiff creditor and formed a tripartite credit agreement with the plaintiff company; the supplier acted as a intermediary of the plaintiff when the defendant concluded the finance contract with the plaintiff.
The plaintiff filed a claim to te defendant in arrear and the defendant made a counterclaim that the credit contract was void by virtue of mistake: whilst the supplier scammed the defendant, the credit contract was void, because the credit contract was induced by the mistake of the supplier who acted as a intermediary of the creditor at a credit contract formed.
Ruling
A person who, when he gave a declaration of will, was mistaken about its content, or did not intend to give a declaration with this content at all, is void if it is to be assumed that he would not have given it if he had known the state of affairs and on a rational assesment of the case. It is stipulated in sec. 95 of the civil law.
The court approved the counterclaim of the defendant. When the supplier employed the credit contract as a measure of fraud, the defendant could insist that the credit contract was void by mistake, even though the mistake existed in the inducement of the defendant and therefore the defendent did not make the inducement clear to the creditor.
As the justivication reason of the decision, the court stated as follows: by forming the membership agreement, the creditor can acquire the new borrowers via marketing of the menber distrubutor and also can earn the membership fee from the distributor; when the tripartite cerdit agreement was employed by a measure of fraud of the distributor, the recognition of the creditor connected with the supplier, the recognition of the supplier should be regarded as same as the supplier at the judgement of the existence of the mistake, because the supplier acted as a intermediary of the creditor; the thought was accordance with the principle of the good faith and the consideration of reward; although the creditor could not argue that the supplied was only a third party on the credit agreement and that the credit contract was not influenced by the defect on the purchasing contract, it should be allowed.
If the above contract is a consumer contract, the issue is resolved by the statutory regulation as follows.
Mistake of a credit contract via distributor connected with a credit company
When a distributor acts as intermediary of a credit company to form the financing contract with the purchaser, the purchaser can consider that the recognition of the distributor is as same as the one of the credit company. It is base on following art.5 of the Consumer Contract Act 2001.
Article 5 (Third Parties Entrusted to Intermediate and Agents)
(1) The preceding article shall apply mutatis mutandis to cases where a business operator entrusts a third party to intermediate a consumer contract between the business operator and a consumer (which shall be referred to simply as “entrustment” for purposes of this paragraph), and the third party (which includes a person entrusted by such third party (including any person who is entrusted through more than two layers of entrustment) who shall be referred to as “entrusted person, etc.” hereinafter) commits any acts set forth in paragraphs (1) to (3) of the preceding article with respect to a consumer. In this case, “the business operator” referred to in the proviso of para. (2) of the preceding article shall be deemed to be replaced with “the business operator or the entrusted person4, etc. provided in para. (1) of the following article.”
(2) Any agent of a consumer (which includes a subagent (including any person appointed as a subagent through more than two layers). The same shall apply hereinafter), agent of a business operator and agent of entrusted person, etc. as above involved in the execution of a consumer contract shall be deemed to be the
consumer, business operator and entrusted person, etc., respectively in the application of paragraphs (1) to (3) of the preceding article (including the case where it is applied mutatis mutandis pursuant to the preceding paragraph. The same shall apply in the following article and in Article 7).
