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Thailand’s Contract Law

Contracts are a necessary part of every commercial transaction. They lay forth the terms and conditions of a contract between two or more parties and serve as a legal instrument that safeguards the interests of all parties concerned. The Civil and Commercial Code governs contracts in Thailand, and it describes the basic elements of a contract, the principles of offer and acceptance, and the remedies available in the case of a violation of contract. In this article, we will look in depth at Thailand’s contract law, including its key aspects, the sorts of contracts recognized by Thai law, and the remedies available in the event of a breach of contract.

Essential Elements of a Contract in Thailand

A contract must include some key features in order to be legally binding in Thailand, including:

An offer is a suggestion to engage into an agreement on certain conditions, whereas acceptance is the absolute and unqualified assent to the offer. The conditions of the offer and acceptance must be precise and certain, or the contract would be deemed null and invalid.

Capacity: All contract parties must be of legal age to engage into an agreement. This implies they must be of legal age, have the mental capacity to grasp the contract’s terms and circumstances, and be free of any legal handicap, such as bankruptcy.

Consideration: Consideration is something of value that is exchanged between the contract’s parties. It might be money, commodities, services, or anything else that the parties agree on. A contract is not legally enforceable without consideration.

Object: The contract’s object must be legal, feasible, and appropriately specified. Contracts for unlawful reasons or those that cannot be fulfilled are null and void.

Types of Contracts Recognized by Thai Law

Thai law recognizes a variety of contract kinds, including:

Contracts for the Sale and Purchase of Goods: These are contracts for the sale and purchase of goods, such as products or commodities. They are subject to the requirements of the Sale of Goods Act, which controls ownership transfer, warranties, and breach of contract remedies.

Contracts for the supply of services, such as professional or consulting services, are referred to as service contracts. They are governed by the laws of the Civil and Commercial Code, which regulate the service’s terms and conditions, the service provider’s obligation, and the remedies for breach of contract.

Lease Contracts: These are agreements to lease property such as land or buildings. They are governed by the provisions of the Hiring of Property Act, which regulate the parties’ rights and responsibilities, the rent, and the consequences for violation of contract.

Employment Contracts: These are agreements between an employer and an employee that outline the terms and conditions of employment, such as salary, working hours, and benefits. They are subject to the Labor Protection Act, which sets minimum employment requirements such as termination, severance compensation, and working conditions.

Remedies for Breach of Contract

In the case of a contract breach, the non-breaching party has many options under Thai law, including:

Particular Performance: This remedy requires the violating party to perform the contract’s requirements as agreed upon. Particular performance is applicable in situations where damages would be insufficient to compensate for the breach of contract, such as when dealing with one-of-a-kind or unique items or services.

Damages: The non-breaching party may also seek damages to compensate for losses incurred as a result of the breach of contract. The amount of damages is assessed using the non-breaching party’s real losses.

Termination: The contract can be terminated by the non-breaching party.