An advisory panel to the Justice Minister has compiled a report on revising the Civil Code, presenting about 300 possible revisions, some of which are meant to protect consumers.

For example, it has been learned that the panel proposes new rules on "contracts of adhesion," a term for unfair contracts agreed between two parties that have heavily unequal bargaining power, such as a large corporation and an ordinary person.

It would be the first thorough revision of the law's provisions on such matters since the law's enactment in 1896.

The council will later compile an outline for the law's revision in about a year, after hearing opinions from the public. The ministry intends to submit the bill to revise the law to the ordinary session of the Diet in 2015.

Under the proposed rules, "adhesive" terms and conditions that inflict unexpected and excessive disadvantages on consumers will be nullified.

In many cases, consumers have signed contracts with little understanding of the fine print in which companies unilaterally stipulate detailed terms to their own advantage. Such consumers have wound up in trouble when they tried to cancel contracts for services such as cellular phones or insurance. They are often subjected to demands for payment of unexpected penalties.

In light of that, the panel proposed a revision of the law to nullify such unreasonable provisions.

The subcommittee of the Legislative Council also proposed a stipulation to bar any individual, other than the manager of a corporate borrower, from becoming a debt guarantor as part of a joint obligation when a small or medium-sized company borrows money from a financial institution.

The move was a response to an increasing number of reported incidents in which a corporate borrower failed to repay debt, causing the company to go broke and leaving a third-party debt guarantor to face demands to repay the debt unconditionally along with the original debtor. Some such individuals, unable to pay, have been driven to personal bankruptcy or even suicide even though they may not have been involved in the management of the company.

The panel also proposed changing the statutory rate of interest from the current fixed rate of 5 percent a year to a floating rate, when there is no agreement between lender and borrower, and to lower the initial interest rate to about 3 percent a year.

Other proposed reforms include introducing an all-encompassing five-year extinctive prescription--a concept analogous to the statue of limitations in criminal law--for all contracts, instead of the current short-term extinctive prescriptions set depending on the content of contracts, such as one year for bill-and-hold deals at eateries, two years for payment to retailers and three years for payment to doctors for medical services.