Contracts are the cornerstone of many business transactions and relationships, providing a framework for parties to define their rights and obligations. However, misunderstandings or unanticipated events can often result in breach of contract claims.
Understanding the legal landscape and available remedies in Thailand is vital to resolving these disputes efficiently and cost-effectively. This collection explores Breach of Contract in Thailand, shedding light on the legal perspectives and common types of breaches.
Remedy for Breach
Contracts are an essential element in many commercial transactions and relationships. When a party fails to fulfill contractual responsibilities, it can have legal ramifications. The Asian Business Law Institute (ABLI) recently published an article written by Tilleke & Gibbins counsel Michael Ramirez that examines breach of contract issues in Thailand. The article provides insights into the country’s legal framework, prevalent forms of contract breaches, and available remedies.
A contract is considered valid under Thai law if it includes an offer, acceptance, consideration, and the intention to create legal relations. In addition, it must include terms that are enforceable by the courts and meet the requirement for mutual assent. A court can void a contract if it is found to be unenforceable or if it violates public policy.
The most common remedy for a breach of contract is damages. These may be compensatory in nature to cover the actual loss incurred or they can be punitive in nature to deter future violations. A breaching party can also be ordered to provide specific performance, a court-ordered requirement that they complete their contractual obligations as originally agreed upon.
A breach of contract dispute can be costly and time-consuming to resolve. It is advisable for businesses to take steps to prevent these disputes from occurring. This may include ensuring that contracts are always in writing and maintaining thorough records. Additionally, it is advisable to seek guidance from a legal professional when contract disputes do arise.
Damages
Contracts provide a fundamental structure for parties to delineate their rights and responsibilities, serving as the foundation of many business transactions and relationships. However, when one party fails to fulfill their contractual responsibilities, it can result in a breach of contract that has serious legal ramifications. This collection explores the nature of contract violations in Thailand, including the legal framework, common forms of breaches, and available remedies for those who are wronged by a breach.
In general, a breach of contract in Thailand may be caused by an express repudiation (explicitly declaring the intent not to fulfil contractual promises) or an implied repudiation (actions that show a clear inability or unwillingness to perform). The non-breaching party is then entitled to claim damages for any financial losses sustained as a consequence of the breach, such as monetary compensation, liquidated damages, and/or specific performance.
The latter remedy involves a court order for the breaching party to fulfill their contractual obligations as originally agreed upon, and it is typically ordered when monetary damages are insufficient to compensate the injured party or where there is a unique good or property involved in the agreement. Additionally, a court can also impose an equitable forfeiture (seizure of assets) to enforce a judgement. This is particularly effective when the judgment is for a significant amount of money.
Specific Performance
Contracts form the fundamental structure for business transactions and relationships, providing a clear framework to delineate rights and responsibilities. Breaches of contract, however, can entail severe legal ramifications. A comprehensive understanding of the legal framework, common types of breaches, and available redresses is imperative for businesses and individuals.
Under Thai law, contracts are governed by the Civil and Commercial Code (CCC). The CCC provides a solid legal framework for addressing breach of contract disputes. In particular, it requires parties to act in good faith and fulfill their contractual obligations with reasonable care and diligence.
The CCC also outlines several remedies for breach of contract, including damages, specific performance, and termination. Damages are monetary awards intended to compensate the non-breaching party for any losses they incurred as a result of the breach. Alternatively, the non-breaching party may choose to seek specific performance, which involves a court order requiring the breaching party to fulfill their contractual duties as agreed upon. This remedy is commonly applied when monetary damages are insufficient to address the breach, most often in cases involving unique goods and real property.
Ultimately, effective contracting in Thailand requires clear and unambiguous agreements, adherence to obligations, and seeking professional guidance when necessary. The use of a reliable contract management software can also fortify your processes and streamline Thailand dispute resolution in the event of a breach.
Court Judgments
In a case of breach of contract in Thailand, the courts can order a specific performance. This means that the breaching party will be required to fulfill the contractual obligations to the best of their ability. However, this is typically only prescribed to unique assets such as real estate.
The court may also award damages to the non-breaching party. These monetary compensations are designed to compensate the injured parties for the loss they experienced as a result of the breaching party’s actions. The amount awarded is typically determined by the court and cannot be punitive or in the form of a penalty.
It is important for businesses to understand the legal landscape in Thailand and available remedies for breach of contracts. This knowledge is critical in preparing for and managing business relationships, ensuring that clear and comprehensive contracts are put in place and that they are adhered to. Additionally, utilising a robust contract management system like Lexagle can help organisations fortify their contracts and prevent breach of any kind.
Civil disputes can be resolved in a number of ways in Thailand, including through negotiation, mediation, and arbitration. Each civil court has a number of volunteer lawyers who can provide pro bono advice or representation to individuals and small businesses who are unable to afford to finance their own legal action.