Legal Agreements & Contracts

Last reviewed: 23 September 2026

Definition. A commercial contract under Thai law is a juristic act formed when an offer and a matching acceptance meet, governed by Book II of the Civil and Commercial Code, and enforceable in a Thai court only if it satisfies any form, registration and stamp duty requirement that applies to it.

What does a contract lawyer in Thailand do?

A contract lawyer in Thailand drafts, reviews and negotiates commercial agreements so that they are valid, provable and enforceable under Thai law. The work covers form and registration requirements, stamp duty, governing law and forum, penalty and restraint clauses, termination mechanics and limitation periods, and it continues into any dispute that follows.

For a foreign company, the commercial terms are only half the work. The other half lies in the points where Thai law overrides the document: a sale of land that is void because the parties never registered it, a lease that binds for only three years, or an unstamped instrument that a court will not read. Our contract lawyers work on those points first, because the commercial terms depend on them.

When is a contract formed under Thai law?

A contract between parties at a distance comes into existence when notice of acceptance reaches the offeror, under section 361 of the Civil and Commercial Code. Section 366 adds an important qualification: where the parties agreed that the contract would be put in writing, it is not concluded, in case of doubt, until they do so.

Section 366 matters in negotiations. Where a party declares that agreement on a point is essential, the contract is not concluded until the parties agree on that point. Term sheets and heads of terms therefore need an express statement of which provisions bind now and which wait for the signed agreement. Section 368 then directs courts to interpret contracts according to the requirements of good faith, taking ordinary usage into consideration.

Which contracts must be in writing or registered in Thailand?

Most Thai contracts need no particular form. However, the Civil and Commercial Code attaches strict consequences to a short list of transactions. Some are void unless made in writing and registered; others are valid but cannot be enforced by action without written evidence signed by the party liable.

Two further limits affect long-term property arrangements. Section 540 caps the duration of a hire of immovable property at thirty years, renewable for a further period not exceeding thirty years from renewal. Consequently, a lease drafted for a longer term is reduced to thirty years by operation of law.

Does an unstamped contract hold up in a Thai court?

No, not until the duty is paid. Section 118 of the Revenue Code provides that an instrument not duly stamped cannot be used as evidence in a civil case until the full duty has been paid and the stamp cancelled. Stamp duty is therefore a litigation issue as much as a tax issue.

The Revenue Department's schedule sets the rates. The table below reproduces selected published rates for instruments that commercial clients regularly sign.

Where an instrument is executed outside Thailand, the first holder in Thailand must stamp it within 30 days of receiving it, according to the Revenue Department's published guidance. Late payment attracts surcharges that rise with time. Full details sit in the Revenue Department's stamp duty page.

Can a Thai contract be governed by foreign law?

Yes. Section 13 of the Act on Conflict of Laws B.E. 2481 (1938) makes the intention of the parties decisive on the law governing the essential elements and effects of a contract. Where the parties express no intention and none can be implied, the Act supplies fallback rules, starting with the law common to parties of the same nationality.

A foreign governing law does not remove Thai procedure, however. Section 46 of the Civil Procedure Code requires proceedings in a Thai court to be conducted in Thai, and a party filing a foreign-language document must file a translation. The party relying on foreign law must also prove it; under section 8 of the Act on Conflict of Laws, Thai internal law applies where the foreign law is not proved to the satisfaction of the court. As a result, a contract lawyer in Thailand looks at governing law and forum together rather than as separate boilerplate.

Electronic signatures

The Electronic Transactions Act B.E. 2544 (2001) recognises electronic signatures. Under section 9, where the law requires a signature, an electronic signature satisfies that requirement if the method identifies the signatory and indicates approval, and is reliable for the purpose. Transactions that require registration by a competent official still follow their own registration procedure.

Are penalty and non-compete clauses enforceable in Thailand?

They are enforceable, but a court can cut them back. Section 383 of the Civil and Commercial Code lets the court reduce a disproportionately high penalty to a reasonable amount, considering every legitimate interest of the creditor. Section 5 of the Unfair Contract Terms Act B.E. 2540 (1997) enforces restraints of trade only to the extent that is fair and reasonable.

Section 380 shapes how a penalty interacts with damages. Where the creditor has a claim for compensation for non-performance, it may demand the forfeited penalty as the minimum amount of the damage, and proof of further damage remains admissible. Once the creditor declares that it demands the penalty in lieu of performance, however, the claim for performance is barred. The drafting choice between a penalty and a damages mechanism therefore affects remedies later.

Section 5 of the Unfair Contract Terms Act directs the court to the geographical scope and duration of a restraint, and to the restricted party's ability to trade in another form or with another person. Section 4 of the same Act adds scrutiny for terms in standard-form contracts that give one side an unreasonable advantage. Additionally, section 373 of the Code voids any advance agreement exempting a party from liability for its own fraud or gross negligence.

How is a Thai commercial contract terminated?

A party rescinds by a declaration of intention to the other party, and section 386 of the Civil and Commercial Code makes that declaration irrevocable. Without an express contractual right, section 387 requires notice fixing a reasonable period for performance before rescission for non-performance. Section 391 then requires each party to restore the other to its former position.

These rules apply across supply, service, licensing and distribution agreements. Our guide to terminating a distributor in Thailand applies them to a distributor exit, where FDA approvals, trademarks and competition-law exposure also come into play.

Construction and hire-of-work contracts in Thailand

Construction contracts fall under the Code's provisions on hire of work, sections 587 to 607. Several of those provisions allocate risk by default, so a contract that is silent on them adopts the statutory position.

Construction and infrastructure contracts also carry stamp duty as hire of work, and the parties may choose arbitration for them. Our litigation and dispute resolution team handles the claims that follow when these contracts fail.

Where are contract disputes heard in Thailand?

Domestic contract disputes go to the ordinary civil courts. Disputes on international sale of goods, international services, licensing agreements and related arbitration fall within section 7 of the Act establishing the Central Intellectual Property and International Trade Court B.E. 2539 (1996). An arbitration clause, if protected in time, takes the dispute out of the courts.

Protection of that clause is procedural. Under section 14 of the Arbitration Act B.E. 2545 (2002), a party sued despite an arbitration agreement must ask the court to strike out the case no later than the date it files its defence. Limitation periods also run in the background: section 193/30 of the Code sets ten years as the general period, while section 193/34 sets two years for listed claims such as a merchant's claim for goods delivered, subject to the five-year rule in section 193/33 where the goods were for the debtor's own business.

How our contract lawyers in Bangkok work

Each engagement follows the same sequence, because each step feeds the next. The table sets out what we do at each stage and why it matters under Thai law.

Documents we ask for at the start

1. The draft agreement or term sheet, with any prior correspondence on key terms.
2. Company affidavits or registration documents for each contracting party.
3. Any licence, permit or registration the transaction depends on.
4. Title documents where the contract concerns land or buildings.
5. Related agreements such as guarantees, security documents or side letters.
6. A short note of the commercial objectives and the outcomes the client most needs to protect.

What drives the scope of a contract engagement

Scope depends on the number of parties and jurisdictions, whether the transaction involves land or a regulated activity, whether bilingual execution versions are required, and how far the terms are negotiated. We scope every mandate in writing before work begins, so the engagement is priced against a defined workstream rather than against an estimate.

Contract lawyer in Thailand: frequently asked questions