This article aimed at discussing the concept of “defect” in warranty system under Art. 570 of the Japanese Civil Code, and would focus on the relationship between “defect” and “non-compliant subject matter liability” in “contractualized liability” under the amended Contract Law. By analyzing the legal precedents, this article found that the concept of “defect” has expanded from “economic” and “absolute physical” defects to “relative physical”, “mental” defects and those caused by external circumstances. The expansion of seller’s duty, which was common under Japanese and Taiwanese legal systems, was resulted from the expansion of subject matter’s utility. If considering the “non-compliance of quality” and “expanding concept of defect” together, we can conclude three directions for future study. First, we need to concretely categorize the contractual relationship and defect to demonstrate the consequences for different non-performance circumstances. Second, it is necessary to reexamine the relationships among “warranty system”, “non-performance” and “violation of disclosure duty”. Lastly, we need to clarify the “right to ask for healing the defect”, “right to claim for damage” and “right to rescind” under non-compliant subject matter liability as well as the “contract content” under the “violation of disclosure duty”.