Contracts form the fundamental structure for parties to delineate their rights and responsibilities, but when they are violated there are legal ramifications. This article explores Breach of Contract in Thailand, shedding light on legal perspectives, prevalent forms of breaches and remedies available to aggrieved parties seeking redress.
Clear contractual terms and open communication should mitigate the occurrence of breach. However, if an informal solution such as a demand letter fails it may be necessary to resort to litigation in Thai courts.
Damages
As in most legal systems, contracts form the cornerstone of business transactions and relationships in Thailand, offering a clear framework for rights and obligations. However, when a contract is breached, it can have significant consequences and disrupt commercial operations. Understanding the legal framework, common types of breaches and available remedies is essential for managing a breach of contract dispute efficiently.
Disputes over payment are one of the most common reasons for a breach of contract. A failure to make agreed-on payments or failing to fulfill contracted work is considered a breach of contract. In some cases, a breach of contract can also involve delivery of defective goods or services or a claim for rescission.
In most situations, a breach of contract requires a claim for damages. Baker McKenzie’s lawyers can manage the entire process, including preparing the claim, appearing as counsel in local courts and enforcing or challenging an award. Early action and communication are key, and considering alternative dispute resolution can save time and money.
Indemnification
Contracts are the cornerstone of business transactions and agreements in Thailand. When they are not fulfilled, disputes arise and the law provides several legal avenues to resolve these disputes. Disputes resulting from a breach of contract typically see the inside of Thai courts once informal methods like demand letters have failed.
The governing body for contract law in Thailand is the Thai Civil and Commercial Code (TCCC). Its legal framework sets forth the types of breaches, available remedies, and avenues for Thailand dispute resolution. Understanding the legal framework, the challenges, and adopting proactive strategies to mitigate the risks of breach of contract helps businesses and individuals navigate this complex issue efficiently.
One remedy available to non-breaching parties is indemnification. This is a payment that compensates the non-breaching party for their losses and expenses resulting from the breach. It can also include liquidated damages, where a pre-agreed amount is paid to avoid lengthy litigation over the actual loss incurred.
Specific Performance
Whether it is a real estate deal, an employment contract, or the sale of a product, contracts provide the framework for defining obligations and relationships. When these agreements are not upheld, breach of contract issues arise that raise serious legal implications. Fortunately, preventing and addressing contract issues can empower businesses to transform discordant notes into harmonious resolutions.
The most common remedy for breach of contract is damages, a monetary award that seeks to compensate the non-breaching party for the financial losses that resulted from the breach. If a monetary remedy is insufficient, the non-breaching party may pursue specific performance, a legal remedy that obligates the breaching party to fulfill contractual obligations as originally agreed upon.
A breach of contract can occur in various ways, including failure to deliver goods or services, delayed delivery, and defective performance. Although attorneys will often attempt to settle these disputes through informal methods such as demand letters, if these options prove unsuccessful, filing a civil lawsuit in the Thai courts can become necessary.
Termination
As in most legal jurisdictions, contracts are the cornerstone of commercial transactions and relationships in Thailand. When these agreements are breached, the parties involved can pursue legal recourse to redress the violation and protect their rights. However, it is important for contract partners to have a clear understanding of the legal framework surrounding contracts, breaches, and remedies under Thai law in order to minimize risks of conflict and potential litigation.
The Civil Code outlines the principles governing contract law in Thailand, emphasizing that parties must fulfill their contractual obligations in good faith and for a legitimate purpose. The code also outlines the types of contract disputes and methods for their resolution.
Disputes over contractual agreements usually only reach the courts after less formal methods of dispute resolution such as a demand letter or arbitration have been unsuccessful. Nevertheless, it is advisable for businesses to involve a law firm to assist with contract litigation as soon as possible in order to ensure that their interests are protected.
