Modification of Civil Code Provision Concerning forfeiture of Benefit of Time

Article 388 of the Civil Act stipulates that if a debtor reduces the security or fails to provide the agreed the security, the debtor cannot claim the benefit of the time. In recent discussions on the revision of the Civil Code, it has been proposed to revise this provision so that the benefit of the time can be claimed only in cases where the security is reduced or not provided due to the debtor's fault. However, I think it is reasonable to delete this provision for the following reasons. First, the reduction or non-provision of the security can be regulated by the responsibility for nonperformance of obligation, enforced performance, or a claim for supplementary mortgage, and it is reasonable to regulate it by these. If the degree of insufficiency of the security is small and the debt can be secured with the remaining security, it is sufficient to regulate it by damages. If it is difficult to secure the debt, the result equivalent to the forfeiture of benefit of time can be achieved through contract termination. The agreed security right can also be fulfilled through enforced performance. Second, there are many debts for which the forfeiture of benefit of time is not appropriate. This includes contracts to sing songs, contracts to produce and supply, contracts to construct buildings, and contracts for the sale of specific goods or real estates. It is not appropriate to include provisions on the forfeiture of benefit of time in the general provisions of claims that cover such debts. Third, France and Japan have similar provisions, but their basis is unclear, and France interprets and operates them in a limited manner. Germany has modified the provisions and includes related provisions only in the loan contract and mortgage sections. Fourth, in practice, a provision for the forfeiture of benefit of time that is very favorable to creditors is inserted into the terms and conditions to prepare for situations where security becomes insufficient. It is necessary to regulate the forfeiture of benefit of time that is excessively favorable to creditors. If such a provision is not included, it is unclear whether it is in line with the intention of the parties to receive immediate performance when the security is reduced or not provided. If such an intention can be found in the contract, it can be the cause for a claim for termination or damages, and can be regulated by this. If there is no such intention and it is not subject to a claim for supplementary mortgage, it is reasonable to view it as a waiver of the right to forfeiture of benefit of time.