Breach of Contract Disputes in Thailand

Breach of Contract occurs when one party fails to follow the terms of a binding agreement. These cases can arise from many sources such as real estate agreements, loan contracts, and labor agreements.

Most attorneys will attempt to resolve a breach of contract dispute through informal methods such as a demand letter before filing for Court action. However, this is not always possible.

Definition

Disputes regarding breach of contract in Thailand are often complex. While we always encourage our clients to avoid a legal fight, when necessary we are able to assist them with the collection of debts based on both local and international breach of contract cases such as real estate agreements, loan contracts, supplier failure or purchasing disputes.

In Thai law, contract terms are interpreted based on good faith and common commercial practice rather than strict literal meaning. However, some terms are considered unfair and not enforceable by the courts including those that violate public policy or good morals. Furthermore, a clause deeming force majeure may excuse parties from their contractual obligations if the event is qualified as such under the specific terms of the agreement and can be proven to have hindered performance.

Rescission

A contract can be rescinded if it is found that the party which signed the agreement did not intend to fulfill its obligations. In this situation, the injured party can get compensation for its losses.

In Thailand, contractual terms are interpreted based on good faith and good commercial practice. They can also be construed by looking at common intention and literal meaning.

At Ratchada Law Firm we have a lot of experience dealing with local and international breach of contracts cases. We have a team of English speaking business attorneys who can assist you in all types of contract disputes, including breach of confidentiality agreements (NDAs). NDAs are essential for protecting your sensitive information when working in Thailand. However, they can be difficult to enforce.

Damages

Depending on the severity of a contract breach, damages are awarded to compensate the victim for their loss. This is the most common remedy, and is intended to reimburse victims for any costs incurred as a result of the breach.

In addition to compensatory damages, individuals can also seek rescission. Rescission is a legal remedy that cancels the contract and returns both parties to their pre-contractual positions.

Disputes over breaches of contracts are common, and it is important to involve an experienced law firm early on so that proper steps can be taken to protect your interests. Our team of lawyers is ready to help. Contact us today to discuss your situation. Our fees are competitive and transparent. We look forward to hearing from you.

Indemnification

Indemnification clauses are common contract provisions, but their enforceability is uncertain under Thai law. Essentially, the indemnitor agrees to hold another party free from responsibility for a potential loss or injury.

A non-disclosure agreement (NDA) is a legally binding contract that protects confidential information, like trade secrets or customer lists, from being disclosed. Generally, NDAs have explicit definitions of what constitutes confidential information, specify the duration of the agreement, and detail the obligations of the receiving party.

Most disputes arising from contracts in Thailand are settled through direct communication between the parties before legal action is formally taken. However, in some cases it is necessary to initiate legal proceedings in order to retrieve debts or damages. Our English speaking business attorneys at Ratchada Law Firm have a wealth of experience in handling these local and international disputes.

Enforcement

When one party does not follow the terms of a contract in Thailand, this can have serious consequences for everyone involved. Depending on the severity of the breach and the contract terms, it may lead to financial compensation for the damages caused, or even termination of employment or the business relationship.

Unlike English contract law, where express contractual terms are clearly set out in writing, Thai courts tend to rely on implied terms and custom or commercial practice when interpreting a contract. This is especially true in cases involving confidentiality clauses and the disclosure of confidential information.

We often receive requests to collect debts based on both international and local breach of contract disputes including service and labor agreements, loan contracts, property leases, and even business related disputes such as when suppliers do not send contracted goods or Purchasers do not pay for their purchases. In many cases, before filing a lawsuit it is best to try to resolve the dispute through informal methods.