Breach of Contract in Thailand occurs when one party fails to follow the terms of a legally binding contract. This can be costly for both parties.
The legal system in Thailand allows for methods to resolve these disputes without resorting to litigation. This article will explore these methods, including demand letters and arbitration.
Damages
Contracts form the cornerstone of business and legal relations, providing a clear framework for both parties’ rights and obligations. However, as with all legal systems, breach of contract disputes can arise. When a party fails to fulfill their contractual duties or responsibilities as specified in an agreement, they may be subject to a civil lawsuit.
The most common remedy for contract breach is damages, which are monetary awards designed to compensate the non-breaching party for financial losses incurred as a result of the breach. Alternatively, the non-breaching party can also seek specific performance. This remedy entails a court order forcing the breaching party to complete their contractual obligations as originally agreed upon.
Our English speaking attorneys regularly handle both international and local breach of contract cases in Thailand. These include service and labor agreements, purchase and sale contracts, loan and lease agreements, and real estate contracts. We can help you gather all of the necessary information and documentation to send a demand letter to the breaching party or initiate a court case.
Specific Performance
Although most lawyers will try to settle contract disputes through informal methods, like a demand letter or arbitration, sometimes court action is necessary. A breach of contract can have serious consequences for businesses, especially if it involves a Non-Disclosure Agreement (NDA) or other confidential information.
The Thai Civil and Commercial Code provides the legal framework for contracts in Thailand. It defines the essential elements of a contract and sets out the rights and obligations of parties. The CCC also outlines various remedies for breach of contract, including damages and specific performance.
The most common remedy for breach of contract is damages, which compensate the non-breaching party for financial losses incurred as a result of the breach. Damages can be compensatory, consequential or punitive in nature. When monetary compensation is inadequate, the non-breaching party can request specific performance. This legal remedy entails a court order compelling the breaching party to fulfill their contractual obligations as originally agreed upon.
Rescission
The rescission of a contract is another remedy available under Thai law to parties in a breach of contract dispute. This process cancels a contract and returns parties to the pre-contractual position, requiring them to return any benefits received as well as compensate for losses incurred.
In cases where a breach of contract involves a thing and that thing is already lost or damaged it may be impossible to rescind the contract. In such cases, the rescission of the contract may be accompanied by a claim for damages.
Breach of contract disputes do not always reach the courts in Thailand, but it is important to involve a reputable law firm when a dispute does arise so that your interests are protected. A legal dispute may take some time to resolve but it is vital that the correct procedure is followed to ensure your rights are protected. If the dispute does reach court it is common for parties to seek damages. This can include the cost of the contract, lost profits, or other injury or loss that has been caused by the breach of contract.
Termination
In cases where a demand letter and other informal methods have failed to resolve a breach of contract dispute, legal action may be necessary. In Thailand, the Civil and Commercial Code provides a framework for enforcing contracts. A court judgment can award damages, rescind the contract or terminate the contract.
Damages are a form of monetary compensation that aim to cover the losses experienced due to the breach of contract. Alternatively, the non-breaching party can request specific performance from the breaching party. This is where the court will order the breaching party to fulfill their contractual obligations as stipulated in the original agreement.
Under Thai law, employers are allowed to fire employees for legitimate business reasons, such as serious misconduct or incompetence. However, employees are able to file a claim for wrongful termination. The court can require the employer to pay out severance payments in such instances. In addition, the court also offers methods for seizing or liquidating assets from the breaching party in order to retrieve a judgment debt and/or damages.