Joint and several liability in Thailand means that each of several debtors must perform the whole obligation, and the creditor may demand it from any one of them. Sections 290 to 296 of the Civil and Commercial Code set this rule, the events that reach every debtor, and the way debtors share the debt among themselves.
This guide takes each section in turn for lenders, suppliers, investors and finance teams that hold claims, or owe obligations, together with other parties in Thailand.
What is joint and several liability in Thailand?
Joint and several liability in Thailand arises when several persons must perform an obligation in a way that each of them must perform in full. Thai law calls these persons ลูกหนี้ร่วมกัน, or joint debtors. Chapter 3 of Book II of the Code carries the heading ลูกหนี้และเจ้าหนี้หลายคน, or several debtors and creditors, and includes Sections 290 to 296.
When does Thai law split a debt into equal shares?
Section 290 covers a different case. Where several persons are debtors and the performance can split into parts, and the position is in doubt, each debtor is liable only for an equal share. In the same way, each creditor may claim only an equal share. Joint and several liability therefore needs more than the presence of several debtors.
The test in Section 291 is the manner of performance. The section applies where each debtor must perform the entire obligation. For a guarantor named as a joint debtor, Section 681/1 of the Code deals with that clause separately, as the guarantee contract article explains.
What can a creditor demand under Section 291?
Under Section 291, the creditor may demand performance from any one joint debtor, in whole or in part, as the creditor chooses. The other debtors remain bound until the debtors perform the obligation in full. The creditor does not need to pursue the debtors in any set order.
The section does not allow the creditor to receive the performance twice. The obligation is one obligation, owed by several debtors. Full performance ends the obligation.
Which events affect every debtor in joint and several liability in Thailand?
Sections 292 to 295 sort events into two groups. Some events benefit the other joint debtors as well. Every other fact affects only the debtor concerned, unless the nature of the obligation requires otherwise.
Payment, substitute performance, deposit and set-off (Section 292)
Payment by one joint debtor benefits the other debtors. The same rule extends to an act done in place of performance, to depositing the property in place of performance, and to set-off. However, the other debtors cannot use a claim that one joint debtor holds against the creditor to set off their own debts. The set-off article covers the conditions for set-off itself.
Release of one debtor (Section 293)
When the creditor releases one joint debtor, the other debtors benefit only to the extent of that debtor’s share. The parties may agree otherwise. As a result, the remaining debtors stay liable for the rest of the obligation.
Creditor default (Section 294)
If the creditor is in default toward one joint debtor, that default also benefits the other debtors.
All other facts (Section 295)
Section 295 covers every fact outside Sections 292 to 294. A fact that concerns one joint debtor benefits or harms only that debtor, unless it conflicts with the nature of the obligation. The section names notice demanding performance, default, fault, impossibility of performance, limitation (including its suspension and interruption), and the merger of the claim and the debt in one person.
How do joint debtors share the debt among themselves?
Section 296 governs the position between the debtors. The default rule is equal shares, subject to a different provision. If the share of one debtor is irrecoverable from that debtor, the other debtors who must contribute bear the shortfall.
Section 296 also deals with a release. If the creditor has released one joint debtor, the share that debtor would have borne falls on the creditor. Read with Section 293, this means a release reduces what the creditor can recover from the remaining debtors by the share of the released debtor.
Joint and several liability in Thailand at a glance
| Event | Section | Effect on the other joint debtors |
|---|---|---|
| One debtor pays | 292 | Benefits the other debtors |
| Act in place of performance, deposit of the property, or set-off | 292 | Same effect as payment. The other debtors cannot use one debtor’s own claim against the creditor for their own set-off |
| Release of one debtor | 293 | Benefits the others only to the extent of the released debtor’s share, unless the parties agree otherwise |
| Creditor default toward one debtor | 294 | Benefits the other debtors |
| Any other fact, such as notice demanding performance, default, limitation or merger | 295 | Benefits or harms only the debtor concerned, unless contrary to the nature of the obligation |
| Sharing among the debtors | 296 | Equal shares, subject to a different provision. The other debtors bear a share that is irrecoverable from one debtor |
For the full Thai text of Sections 290 to 296, see the Office of the Council of State. The Royal Gazette publishes the Code and its amendments at ratchakitcha.soc.go.th. Lenders that need to enforce a claim against several obligors can also read about debt recovery in Thailand.
Joint and several liability in Thailand: frequently asked questions
Can a creditor demand the whole debt from only one joint debtor?
Does payment by one joint debtor release the others?
What happens when the creditor releases one joint debtor?
Does a demand served on one joint debtor bind the others?
Do joint debtors always share the debt equally?
Conclusion
Sections 290 to 296 give the creditor a single obligation with several debtors, and they set out which events reach every debtor and which stay personal. Testing each event against Sections 292 to 295 shows whether it reaches every debtor or only one.
Speak with our partner
Arrange a consultation to discuss a matter that involves several debtors under Thai law.