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Introduction
A contract is a legal instrument used to create an obligation between two or more parties. When parties agree voluntarily and clearly express their intentions, the contract creates a legal obligation that all parties must fulfill.
However, in some situations, one party to a contract may not perform their obligations, or may not perform them fully. This is called a “breach of contract.” This article focuses on explaining the Thai laws related to breach of contract to help readers understand the consequences and remedies available when faced with such a situation.
Types of Breach of Contract
Thai law divides breach of contract into two main types:
Breach of contract by implication: This means that one party to the contract does not perform their obligations, or does not perform them fully, according to the agreed terms. Examples include:
• The seller does not deliver the goods to the buyer on time.
• The tenant does not pay the rent.
• The debtor does not pay the debt.
Intentional breach of contract: This means that one party to the contract intentionally does not perform their obligations. Examples include:
• The seller delivers defective goods to the buyer.
• The tenant damages the rented property.
• The debtor flees to avoid paying the debt.
Consequences of Breach of Contract
When one party to a contract breaches the contract, the other party has the right to:
• Sue for damages: The party that has suffered damages can sue the party that breached the contract for damages.
• Force performance of the contract: The party that has suffered damages can sue in court to force the party that breached the contract to perform the contract.
• Terminate the contract: The party that has suffered damages can terminate the contract.
Remedies
When faced with a breach of contract, the following remedies are available:
• Negotiation: This is the first option that should be considered. The parties should try to negotiate to find a mutually agreeable solution.
• Mediation: If self-negotiation is unsuccessful, mediation can be used through relevant agencies, such as the Arbitration Institute.
• Litigation: If other options are unsuccessful, the party that has suffered damages can sue in court.
References
Civil and Commercial Code, Sections 387 – 397
Code of Civil Procedure, Sections 208 – 215
Website of the Office of the Council of State: https://www.krisdika.go.th/
Conclusion
Breach of contract is a problem that can happen to anyone. Understanding the Thai laws related to breach of contract can help you protect your rights and interests.