1. The Client's Situation
Company A is a company that supplies food ingredients and had entered into long-term contracts with numerous business partners. However, the creditworthiness of some partners was low, making it difficult to obtain guarantee insurance, and as a result, anxiety over the recovery of payments was growing. In particular, since the means of securing outstanding receivables were inadequate when concluding contracts with new partners, there was a risk regarding the recovery of payments going forward.
2. Your Legal Team's Advice
At Company A's request, Your Legal Team reviewed from multiple angles the means of preventing outstanding receivables in advance and securing them stably. At the pre-contract stage, the team proposed measures such as establishing security interests in real estate and movable property, introducing joint and several guarantees, preparing notarial deeds, and utilizing transaction deposits and advance payment systems. In particular, the team emphasized that including a clause acknowledging compulsory execution (a clause of acceptance of compulsory execution) in a notarial deed enables compulsory execution in the future without litigation. In cases where outstanding receivables arose after the conclusion of a contract, the team advised on measures such as assignment of claims and establishment of pledges, applications for provisional attachment and provisional disposition, and establishment of a repayment plan through a notarial deed, so as to maximize the actual feasibility of recovering the receivables.
3. Outcome
As a result, based on Your Legal Team's advice, Company A included notarial deeds and the establishment of security interests as mandatory requirements when concluding new contracts, and was able to significantly improve the recovery rate of outstanding receivables from existing partners. In particular, by actively utilizing notarial deeds, compulsory execution became possible without separate litigation, and the receivable recovery procedure proceeded swiftly.