The Civil Act, which has remained largely unchanged since its enactment in 1958, will undergo a comprehensive revision to reflect the changed social and economic environment. The Ministry of Justice announced on the 16th that it had approved an amendment to the contract law regulations as the first task for modernizing the Civil Act.
The amendment allows the statutory interest rates, fixed at 5% per annum for civil cases and 6% per annum for commercial cases, to be adjusted by presidential decree considering economic conditions such as interest rates and inflation. This improvement addresses the limitations of fixed statutory interest rates over decades, enabling the system to respond flexibly to changing economic conditions.
The amendment also includes a provision allowing the cancellation of declarations of intent made under ‘gaslighting’ conditions. This complements the existing Civil Act, which made it difficult to cancel declarations made under psychological dominance or undue interference, by allowing cancellations in such cases. This aims to practically protect individual decision-making freedom and clarify legal remedies for unfair situations that may arise during the contract process.
The Ministry of Justice views this amendment to the contract law as the starting point for a comprehensive revision of the Civil Act. Despite two operations of the Civil Act Revision Committee since 1999, which led to some achievements such as the introduction of the adult guardianship system, a comprehensive revision of the Civil Act has not been achieved. Therefore, in June 2023, a new Civil Act Revision Committee was launched with the participation of academic and practical experts to resume the revision work, with contract law selected as the first task closely related to people’s lives.