Where there is a breach of contract, the non-breaching party or the injured party will often seek remedies whether under the contract or the law. This article gives you a brief highlight of contract remedies under the Civil and Commercial Code of Thailand.
In Thai law, the contract remedies can be defined generally as ‘damages’, ‘compensation’ and ‘penalty’ to non-breaching parties which are a direct and natural result of the breaching party.
The word ‘damages’ can be defined as money awarded by a court in compensation for loss or injury which difference form the word ‘damage’, which means loss or harm which is actionable in law.
Under the Thailand law, the area of the contract remedies is a broad area, let’s make it easy by classify the remedies into 3 main categories;
1.-General damages or money damages which is a direct and natural result of the breach. Thai law refers to as a ‘damages’ When demanded, the complainant needs to prove the damages.1
2.-Consequential damages which is an extra damage of the general damages. Thai law refers to as a ‘compensation’. When demanded, the complainant needs to prove that foreseeable by the contract parties that in addition of the proof of the damages.2
3.-Stipulated or Liquidated Damages which the contract parties agree upon the amount of the damages at the time they enter into the contract. Thai law refers to as a ‘Penalty’. Complainant does not need to prove the damages but the amount of damages may be reduced to a reasonable amount by the court. To reduce the amount of damages, the defendant needs to prove.3
Then note, at the time of entry into the contract, if the contract parties agreed upon the amount of consequential damages. The court often gives effect to this kind of term as the stipulate or liquidated damages.
Remedies Notes In Addition
In addition to the main categories, there are another contract remedies under Thailand law such as;
1.-Specific performance. Where, contract parties must perform a specific performance. For example, the seller is binding to deliver the goods to the buyer and the seller decides to sell such goods to a third party. Basically, The buyer will compel the seller to deliver the good as the specific performance under the contract. However, in this case, the nature of the obligation does not permit as the goods already delivered to the third party, the buyer or non-breaching party may demand for damages.4
2.-Rescission and restitution when the contract has been a default by one party completely fails to perform its obligations under the contract, the non-breaching party may rescind or cancel the contract which constitutes an undoing of the contract from the beginning.5
3.-Interest is a one type of damages which the non-breaching party has a right to demand without proof of damage.6
However, contract remedies under Thailand law include a right to reject goods, a right to return or demand repair of replacement, for instance.7
The contract remedies in Thailand law cover a broad area of damages, rights to demand and burden of proof of each damages are different from the other. Importantly, the rights to demand for the contract remedies set forth by law, it can be demanded without terms and conditions of contract.
If you need more information, or when you are in need of a contract lawyer in Phuket or in Thailand, you may visit our contract page or just feel free to contact us at any time. We Can Help.
1-The Thailand Civil and Commercial Code (CCC), Section 222
2-CCC, Section 222
3-CCC, Section 379-383, Supreme Court Judgment No. 2866/2526
4-CCC, Section 213-216, Specific performance is a fundamental principle of law from Latin ‘pasta sunt servanda’ or the agreements must be kept.
5-CCC, Section 386-394
6-CCC, Section 224
7-CCC, Section 208-209