The ‘Contract of Sale’ or “Sale and Purchase Contract”. Under Thai law, this contract only relates to the transfer to another person of the ownership of property1. It differs from the “sale of goods” in other countries, which can be related to a wide variety of transactions, including buying something tangible in a shop or on the Internet, or paying for a service. Thus, if you buy a service in Phuket or Thailand, you have to make a service agreement. Not a sale and purchase contract. This article gives you a basic understanding of it under Thai law. I hope you can make use of it once.
It is a contract whereby a seller transfers to the buyer ‘the ownership of the property’, and the buyer agrees to pay the seller a price for it. The property includes both tangible things in general and intangible things that have value but do not exist physically.
The note is that the promise of sale does not lead to the formation of an enforceable contract. The addition notes that the seller doesn’t need to be the owner of the property at the moment the contract occurs; the obligation of the seller is to transfer ownership of the property to the buyer by the agreed date.2
Contract of Sale Formation
As with the other kind of contract, this kind of contract occurs when an offer is accepted. However, the question of when the contract occurs and whether the contract is legally enforceable or not is a different question of law. All contracts under Thai law will be legally enforceable when they comply with the conditions of validity of the contract.
Compulsory Forms of Contract of Sale
In some countries such as UK3, this kind of contract may be made in writing (either with or without a seal), by word of mouth, partly in writing and partly by word of mouth, or may be implied from the conduct of the parties. But in Phuket and Thailand, the forms of this contract are classified into 3 categories: oral contract, written contract, and written contract together with registration of the sale;
The oral contract applies to the contract of sale, pre-contract of sale, or premise of sale of movable property where the agreed price is under twenty thousand baht.
Evidence Signed by the Party Liable, Deposit or Part of Payment
These categories apply to the contract of sale, the pre-contract of sale, or the premises of the sale of movable property where the agreed price is twenty-thousand baht or more.
Written Contract and Registration of the Sale
This category applies to contracts of sale of immovable property, ships of five tonnes and over, floating houses, and breaches of burden.
The notes on the compulsory forms are below;
- A written contract is a document with both parties’ signatures; they aren’t required to sign at the same time or at the moment the contract occurs. It may be signed whenever, before submitting the case to a court, the evidence signed by the party liable is the same.4
- The electronic signature applies to the contract of sale. Therefore, the written contract or the evidence signed by the party liable may be made through an electronic device such as a smartphone.5
Terms and Conditions
The parties are free to agree on all terms and conditions. All terms and conditions of the contracts are legally enforceable as long as they are not prohibited by law, impossible to perform, or contrary to public order or good morals. It may be good to see some examples of Land and House or Condominium Sale and Purchase contracts. Also basic understanding about contract remedies in Thai law.
Contract of Sale in Conclusion
This type of contract under Thai law is limited to the sale of property; the sale of services or something else is not included. Also, it is subject to the condition of the validity of the contract and other relevant laws. If you are in need of a contract lawyer, or further information about contract and business law of Thailand, just feel free to contact us.
- Thailand Civil and Commercial Code (CCC), Section 137, 138, 150, 453, 454, 456
- Thailand Supreme Court Judgment No. 2521/2559, 2856/2559
- The UK, Sale of Goods Act 1979 Article 4 (1)
- Thailand Supreme Court Judgment No. 1881/2540
- Electronic Transaction Act B.E. 2544, Section 4, 8 and 9