Agency Contract in Thailand: Civil Code Rules

What Is an Agency Contract in Thailand?

Section 797 defines agency as a contract giving the agent authority to act for the principal, with the agent agreeing to act. The appointment may be express or implied. As a result, conduct alone can create an agency relationship, and the scope of authority then turns on what the parties said and did.

The Code also covers remuneration. Under Section 803, an agent is entitled to remuneration only where the contract, the dealings between the parties or usage provides for it. A written appointment that states remuneration therefore removes one source of dispute.

When Must the Appointment Be in Writing?

Section 798 links the form of the appointment to the act. Where the law requires an act to be made in writing, the appointment of an agent for that act must also be in writing. Where the law requires written evidence of an act, the appointment must also be evidenced in writing.

Consequently, an agent appointed to sign a transaction that the law requires in writing needs written authority. A principal who relies on an oral appointment for such an act risks a challenge to the act itself.

General and Special Authority in an Agency Contract in Thailand

The Code distinguishes special authority for particular matters from general authority over the principal’s affairs. Under Section 800, a special agent may do everything necessary to carry out the entrusted matter. Under Section 801, a general agent may perform acts of management, but six acts require express authority.

In addition, Section 802 presumes that an agent has authority, in an emergency, to take the steps a person of ordinary prudence would take to protect the principal from loss.

What Duties Does the Agent Owe the Principal?

The agent must follow the principal’s express or implied instructions under Section 807. Without instructions, the agent follows the course of business. The agent must act personally unless authorised to appoint a sub-agent (Section 808), and must report on request and account when the agency ends (Section 809).

• Handing over property: Section 810 requires the agent to deliver money and property received for the principal.
• Interest on misused funds: Section 811 makes the agent pay interest on the principal’s money used for the agent’s own benefit.
• Liability for loss: Section 812 makes the agent liable for loss caused by negligence, non-performance, or acts without or beyond authority.
• Self-dealing: Section 805 bars the agent from contracting with itself, or for a third party, without the principal’s consent, unless the act only performs an obligation.

The principal also has duties. Section 815 requires the principal to advance funds for the work on request. Section 816 lets the agent recover necessary expenses with interest and claim compensation for loss suffered without fault.

When Does an Agency Contract in Thailand Bind the Principal?

Section 820 binds the principal to third parties for acts the agent or sub-agent performs within the scope of authority. Acts without or beyond authority do not bind the principal unless the principal ratifies them under Section 823. If the principal does not ratify, the agent is personally liable, unless the third party knew of the lack of authority.

Agency by holding out

Section 821 makes a person who holds out another as an agent, or knowingly allows another to act as an agent, liable to a third party in good faith as if that person were an agent. Section 822 extends this rule where the agent exceeds authority and the principal’s conduct gave the third party reason to believe the act was authorised.

Secret payments to the agent

Under Section 825, the principal is not bound by a transaction where the agent accepted or agreed to accept a payment or promise from the third party, unless the principal consents.

Agents Acting for a Principal Abroad

Section 824 addresses a principal residing and domiciled outside Thailand. An agent who contracts for such a principal is personally and solely liable on the contract, even where the principal’s name is disclosed. The rule yields where the contract terms are inconsistent with the agent’s liability.

This section is significant for foreign companies that act through a Thai representative without a Thai entity. The allocation of liability between the foreign principal, the Thai agent and the counterparty can be set out expressly in the contract with the counterparty.

How Does an Agency Contract in Thailand End?

Under Section 826, agency ends when the principal revokes it or the agent renounces it. It also ends on the death, incapacity or bankruptcy of either party, unless the contract or the nature of the business provides otherwise. Section 827 allows revocation or renunciation at any time.

1. Timing: under Section 827, a party who revokes or renounces at a time unfavourable to the other party is liable for the resulting damage, except in case of unavoidable necessity.
2. Notice to the other party: under Section 830, the end of the agency cannot be raised against the other party until notice is given or that party knows of it.
3. Third parties: under Section 831, the end of the agency cannot be raised against a third party acting in good faith, unless that party’s ignorance results from its own negligence.
4. Written authority: under Section 832, the principal may demand the return of any written authority given to the agent.

Reading the Agency Provisions Together

For a foreign principal, three sections carry the most weight. Section 801 sets the outer limit of a general appointment, so property, litigation and settlement powers need express wording. Section 824 places contract liability on the local agent unless the contract allocates it otherwise. Sections 830 and 831 make notice the step that closes the agency against counterparties.

Read together, the written appointment, the counterparty contract and the notice of revocation form one chain. Each link answers a different question under the Code: what the agent may do, who is liable, and when the authority stops.

Frequently Asked Questions

Conclusion

Sections 797 to 832 give agency a clear framework: form follows the act, general authority stops at six listed acts, the principal answers for authorised acts and for appearances it creates, and termination takes effect against others through notice. Therefore, the appointment, the counterparty contract and the revocation notice each deserve precise drafting. For related reading, see our guides on terminating a distributor in Thailand and the guarantee contract in Thailand, or our contract lawyer services. The official Thai text is published by the Office of the Council of State.