Thailand Civil and Commercial Code Sections-898-981
TITLE XXI
BILLS
CHAPTER I
GENERAL PROVISIONS
Section 898 Bills, within the meaning of this Code, are of three kinds, namely: bills of exchange, promissory notes, and cheques.
Section 899 If matters not provided for in this Title are inserted in a bill, they have no effect under the bill.
Section 900 A person who puts his signature on a bill is liable according to the tenor of such bill. A mere mark, such as a cross or a fingerprint purporting to be a signature on a bill, even if certified by witnesses, has no specific effect under the bill.
Section 901 If any person signs their name on a bill without stating that they are acting on behalf of another person, that person shall be liable according to the bill.
Section 902 If a bill is signed by several persons, including those who are not parties to the bill or whose signature does not have full effect, this does not affect the liability of other persons who are liable according to the bill.
Section 903 No vacation days shall be granted in the use of funds according to bills.
Section 904 A person holding a bill means someone who possesses the bill after receiving it as payment or as an endorser. If the bill is payable to the bearer, the bearer is considered the holder.
Section 905 Subject to Section 1008, a person who holds a bill of money in their possession and can demonstrate their right through continuous endorsement, even if the latest endorsement is in blank, is considered the legal owner. When an endorsement appears to be made by another person, the person who made the last endorsement is considered the recipient of the bill through endorsement. Additionally, when an endorsement is canceled, it is treated as if it never existed.
If any person lacks possession of a bill, the person who demonstrates their rights in the manner described in the preceding paragraph is not required to present the bill, unless it was obtained dishonestly or through gross negligence. This provision also applies to the holder of a bill payable to the bearer.
Section 906 The term “previous contracting party” includes the payer, previous issuers of the bill, and endorsers.
Section 907 When there is no space left on a bill for further endorsements, a separate piece of paper may be attached to the bill, referred to as a rider, and considered part of the bill.
For the first endorsement, it must be written directly on the original bill, not on a separate sheet of paper.
CHAPTER II
BILLS OF EXCHANGE
PART I
DRAWING ENDORSEMENT
Section 908 A bill of exchange is a written instrument where one person, known as the drawer, orders another person, the payer, to pay a specified amount of money to a person or to the order of a person called the payee.
Section 909 A bill of exchange must contain the following items:
- A statement indicating that it is a bill of exchange.
- An unconditional order to pay a fixed amount of money.
- Name or brand of the payer.
- Due date of the payment.
- Place where the payment is to be made.
- Name or brand of the payee, or a notice stating that the money is to be given to the bearer.
- Date and place of issuance of the bill.
- Signature of the payer.
Section 910 An instrument missing any of the items specified in the preceding section is not considered a valid bill of exchange, except in the following cases:
If the bill of exchange does not specify the time for the payment, it is deemed to be payable on demand.
If the place of payment is not stated, the domicile of the payer is considered the place of payment.
If the place of issuance is not indicated, it is considered to be issued at the domicile of the payer.
If the date of issuance is not stated, any lawful person acting in good faith may insert the correct date.
Section 911 The drawer may include a statement allowing the amount to accrue interest. In such cases, unless otherwise stated, interest accrues only from the date of the bill’s issuance.
Section 912 A bill of exchange may be issued for payment by the drawer’s order. Payment can be made by the payer themselves or ordered to a third party.
Section 913 The due date of a bill of exchange may be:
- On a specific day.
- At the end of a specified period from the date of the bill.
- On demand.
- At the end of a specified period after sight.
Section 914 The payer or endorser of a bill of exchange promises that upon proper presentation, they will certify and pay the amount as per the bill’s contents. They may decline to accept the bill or refuse payment, in which case they must pay the amount to the holder or subsequent endorser who has acted correctly in not guaranteeing or paying the money.
Section 915 The drawer of the bill of exchange and any endorser may explicitly include terms on the bill:
- Removing or limiting their liability to the holder.
- Requiring the holder to waive some or all duties they must fulfill.
Section 916 Persons sued regarding a bill of exchange cannot use defenses based on personal relationships with the drawer or previous holders, unless the transfer was made fraudulently or in conspiracy.
Section 917 Every bill of exchange, even if not made payable to the person it is ordered for, may be transferred by endorsement and delivery. If the drawer writes on the front that it is non-negotiable or uses similar words, it can only be transferred formally, with the effect of an ordinary transfer. The bill may be endorsed by the payer, whether certified or not, to any other party, allowing further endorsement.
Section 918 A bill of exchange ordering payment to the holder is transferred only by delivery.
Section 919 Endorsements must be written on the bill or on an allonge and must be signed by the endorser. An endorsement is valid even without naming the endorsee or if the endorser merely signs their name on the back of the bill or an allonge. Such an endorsement is termed a “Floating Endorsement.”
Section 920 An endorsement transfers all rights arising from a bill of exchange. If the endorsement is blank, the endorser can:
- Fill in the blank by writing their own name or the name of any other person.
- Further endorse the bill in blank or endorse it to another person.
- Transfer the bill to a third person without filling in the blank and without endorsing anything.
Section 921 Endorsing a bill of exchange that orders the payment to the holder serves only as a guarantee (aval) for the payer.
Section 922 The endorsement must be an unconditional statement. If any conditions are imposed, they are considered void as if they were not written at all. If an endorsement partially transfers, it is also void.
Section 923 Any endorser who explicitly prohibits further endorsements is not liable to any subsequent endorsee of the bill of exchange.
Section 924 If a bill of exchange is endorsed after the time limit to challenge non-endorsement or non-payment has expired, the endorsee has the right of recourse against endorsers who endorsed the bill after the expiration. However, if the bill was previously challenged for non-endorsement or non-payment, the endorsee is entitled only to the rights of the endorser who endorsed it and the payer, as well as those who endorsed the bill up to the time of objection.
Section 925 If an endorsement specifies terms like “for collection,” “as agent on behalf of,” or any similar expressions indicating agency, the holder of the bill of exchange can exercise all rights arising from the bill but only as an agent. In such cases, parties liable under the contract can only defend themselves against the holder with defenses available to the endorser.
Section 926 If an endorsement specifies terms like “as security,” “as pledge,” or similar terms implying a pledge, the holder of the bill of exchange can exercise all rights arising from the bill but only as a pledgee. Contracting parties liable under the bill cannot defend themselves against the holder based on personal relationships unless the endorsement was part of a conspiracy to defraud.
PART II
ACCEPTANCE
Section 927 The bill of exchange must be presented to the payer at the payer’s address for certification at any time until the specified date for payment, and only the person possessing the bill may present it.
The payer can stipulate that the bill must be presented for certification within a limited time frame or with no time limit. The drawer may prohibit certification except for bills issued for payment at a place other than the payer’s domicile or ordered to be paid upon sight.
Additionally, the payer may specify a minimum date for certification. Each endorser shall include terms requiring the bill’s certification within a limited or unlimited time frame, unless certification is prohibited by the payer.
Section 928 If a bill of exchange is due at sight, it must be presented for certification within six months of issuance or later as specified by the payer.
Section 929 Subject to Section 927, the holder of a bill of exchange has the right to promptly present it to the payer for certification. If the payer does not certify within twenty-four hours, the holder has the right to object.
Section 930 When submitting a bill of exchange for certification, the presenter is not required to leave the bill with the payer. Moreover, the payer may request a second submission the next day, and failure to comply cannot be used as a defense unless specified in the objection.
Section 931 Certification should be indicated by writing “certified” or similar on the front of the bill of exchange, followed by the payer’s signature. Only the payer’s signature on the front of the bill classifies it as guaranteed.
Section 932 Any bill of exchange specifying a time period from issuance or sight for payment is valid even without a specified date. If certification is undated, the bill may record the actual issuance or certification date for payment accordingly.
Furthermore, in cases of good faith mistakes in dates, if the bill later reaches a lawful holder, it remains valid, and payment should proceed as if the recorded date were correct.
Section 933 If certification is undated, the last day of the specified certification period is considered the certification day.
Section 934 If the payer initially certifies the bill but crosses it out before it leaves their possession, it is considered rejected or uncertified. If the payer notifies the holder or another signatory in writing of initial certification followed by cancellation, they are bound by the initially certified contents.
Section 935 Certification can be either absolute or conditional.
Absolute certification means agreeing without contradiction to the payer’s order.
Conditional certification refers to certifying only parts of the bill or with conditions.
Section 936 Conditional certification allows the holder to reject it. If certification is evasive and lacks absolute assurance, the bill may be considered unreliable and not guaranteed.
If the drawer or endorser did not explicitly or implicitly authorize the holder to accept evasive certification or later disagrees, the payer or endorser is released from liability under the bill, except for prior notified partial certifications.
If the drawer or endorser receives notification of acceptance and does not object within a reasonable time, their consent to payment is implied.
Section 937 The payer who certifies a bill of exchange is obligated to pay the certified amount as per their certification.
PART III
AVAL
Section 938 A bill of exchange may have a guarantor who guarantees the full or partial payment, known as “Aval.” Aval can be obtained by any third party or even by one of the parties to the bill.
Section 939 Aval is established by writing it directly on the bill or on an annexed slip. The expression “Can be used as an aval” or similar must be used, along with the signature of the aval provider. Simply signing the name of the aval provider on the front of the bill constitutes an aval, except if it is signed by the payer or drawer. The aval statement must specify the guarantor; if not specified, the guarantor will be considered to be the payer.
Section 940 The aval provider is bound in the same manner as the person they guarantee. Even if the liability for the money guaranteed by the aval becomes unusable for reasons other than rule violations, the terms of the aval contract remain valid. The aval provider has the right to seek recourse against the person they guaranteed and all other liable parties when the money is used according to the bill of exchange.
PART IV
PATMENT
Section 941 A bill of exchange must specify the exact date when the money will be used and the deadline for submitting the bill to use the money on that day.
Section 942 The holder of the bill of exchange cannot compel payment before the due date. Moreover, any payer who pays before the bill is due does so at their own risk.
Section 943 For bills of exchange that stipulate payment within a specified period from the date of seeing it, specify from the date of acceptance or objection. If there is no objection and the certification is undated, certification is deemed to have occurred on the last day of the legally stipulated time period or as per the contract for bill submission.
Section 944 A bill of exchange allowing payment upon seeing it should be paid on the day the bill is submitted. However, submission must occur within the required timeframe for submitting and certifying bills for payment within a specified period after seeing them.
Section 945 Payment can only be claimed after surrendering the bill of exchange. The recipient of the payment must be the person who signed and certified the bill.
Section 946 If a bill of exchange allows only partial payment, the recipient must indicate this in the bill and provide a receipt to the payer.
Section 947 If a bill of exchange is not submitted for payment on the due date, the guarantor may release themselves from liability by depositing the outstanding amount under the bill.
Section 948 If the holder of the bill of exchange agrees to extend the payment period for the payer, they lose the right to seek recourse against previous parties who did not consent to the extension.
Section 949 Subject to Section 1009, a person who pays on time is released from liability unless they committed fraud or were grossly negligent. The person must also prove they received continuous and uninterrupted endorsements, but verification of the endorsers’ signatures is unnecessary.
PART V
INTERVENTION FOR HONOR
Section 950 The drawer or endorser may designate any person to endorse or use the money as intended at the place where the money is to be spent. Further conditions will be discussed. Any person may accept or use money according to a bill of exchange by intervening before any person who signs the bill. The person inserting the face can be an outsider, even if they are the payer or already liable for the bill, except for certifiers. The person intervening must promptly give notice so that the contracting party with whom they have acted is aware of their actions.
Section 951 Certification to Correct Face
Certification by insertion into the face allows the holder, who has the right of recourse before the bill expires, to accept it. The person who offers to accept it can reject certification by inserting to fix that page, even if the person is identified as the certifier or intends to use the money. The one allowing certification forfeits the right of recourse before the due date against all contracting parties liable to them.
Section 952 Certification by Inserting and Altering the Face
Certification by inserting and altering the face involves writing the contents on the bill of exchange, with the signature of the person inserting the face being crucial. It must be specified for whom the certification is intended; if unspecified, it is deemed intended for the payer.
Section 953 Liability of the Person Accepting the Bill
The person accepting the bill is liable to the holder and to all endorsers subsequent to the contracting party on whose behalf they acted, in the same manner as that contracting party is liable themselves.
Section 954 Using Money to Fix Face
Using money to amend is permissible when the holder has recourse rights either at or before the bill’s due date. The use of such money must occur by the following day at the latest, but no later than the final day of the objection period for non-use of money.
Section 955 Using Money to Rectify Face
If the bill of exchange is certified for rectification purposes, or a person is designated to use the money as desired, the bill must be presented to that person at the place of intended expenditure. If necessary, objections to non-use of money must be raised no later than the next day but one day before the deadline for objections. If no objections are raised within this timeframe, the identified party who used the money as intended, or the certified party and subsequent endorsers, will be released from liability.
Section 956 Using Money to Rectify Face
When using money for rectification, the full amount obligated by the party must be used, except for discounts as outlined in Section 968(4). Any refusal to accept the money provided will result in the person losing recourse rights against those who could have been relieved from liability due to the money’s use.
Section 957 Evidence of Using Money to Rectify Face
Using money to rectify must be evidenced by a receipt written on the bill of exchange, specifying the recipient of the funds. If unspecified, it will be presumed that the money was used for the payer. If objections have been made to the bill of exchange, it must be sent to the party who used the money for rectification.
Section 958 Rights of the Person Using Money to Rectify Face
A person using money to rectify inherits all rights of the holder against the contracting party on whose behalf the money was spent, as well as against all liable contracting parties. However, they forfeit the right to endorse the bill of exchange further. Subsequent endorsers of the contracting party on whose behalf the money was spent will also be released from liability.
PART VI
RECOURSE FOR NON-ACCEPTANCE OR NON-PAYMENT
Section 959 Right of Recourse Due to Non-Guarantee or Non-Use of Money
The holder of a bill of exchange may exercise the right of recourse against endorsers, the drawer, and other liable parties under the bill in the following cases:
- a) Recourse is available upon maturity of the bill in cases of non-payment of money.
- b) Recourse is available even if the entire bill has not matured in the following circumstances:
(1) Refusal to accept the bill.
(2) Bankruptcy of the payer, whether certified or not, or failure to pay debts, even without a judgment as evidence, or ineffective seizure of the payer.
(3) Bankruptcy of the drawer of an uncertified bill.
Section 960 Evidence of Lack of Certification or Use of the Bill
Evidence of lack of certification or non-use of the bill of exchange must be documented with an objection. Objections to non-use of money must be made on the day specified for money use according to the bill, or within the next three days thereafter. Objections to lack of certification must be made within the specified time limit for submission of bills for certification, or within three days from that time. Once an objection to lack of certification has been made, there is no need to submit it for money use or to object to non-use of the money. In all cases mentioned in Section 959(b)(2), the holder may not exercise the right of recourse until the bill has been submitted to the payer for money use and an objection has been made. In all cases mentioned in Section 959(b)(3), presentation of a judgment ordering the drawer bankrupt is sufficient to enable the holder to exercise the right of recourse.
Section 961 Submission of Objection
The objection must be submitted to the District Chief or a representative thereof, or to a lawyer licensed for this purpose. The Minister of Justice has the authority to issue regulations for the implementation of this Code, including issuing licenses and making objections, and determining court fees related to such matters.
Section 962 Content of Objection
In addition to the name, position, and signature of the objecting person, the objection must include a copy of the bill with all endorsements exactly as specified, containing:
(1) Name or brand of the objecting person and the objective.
(2) Basis or grounds for the objection to the bill, demands and responses, if any, or information that the payer or guarantor cannot be located.
(3) If there is certification or use of money for face rectification, the nature of the facial enhancement must be stated, including the name or brand of the guarantor or person using the money for facial enhancement, and the name of the person whose face is being altered.
(4) Place and date of the objection.
The objector must promptly deliver the objection to the party requesting it, and send notice of the objection to the objected person. If the domicile of the objectee is known, send it by registered mail or deliver it there. If the domicile is unknown, post a copy of the objection in a conspicuous place at the local district office where the objector last resided.
Section 963 Notice of Non-Acceptance of the Bill or Non-Use of Money
The person obligated to provide notice of non-acceptance of the bill of exchange or non-use of the money must do so within four days following the objection date or the date of bill submission in cases where “no objection” is stipulated. Each endorser must notify the subsequent endorser within two days of receiving notice, acknowledging receipt and noting the name and position of the person from whom they received notice, and continue this succession until reaching the payer. The time limits mentioned above start from when each person receives notice from the previous person.
If an endorser does not specify their position or if it is illegible, notice sent to the preceding endorser alone is sufficient. Notice can be given in any form, including simply sending the bill of exchange for endorsement. It must be proven that notice was sent within the specified time. If sent by registered mail, the notice is considered sent within the required time limit.
Failure to give notice within the specified time does not forfeit the right of recourse but may result in liability for damages caused by negligence, not exceeding the amount in the bill of exchange.
Section 964 Regulations on Objections to Non-Acceptance or Non-Use of Money
With regulations stating “No objections necessary,” “No objections required,” or similar expressions, the drawer or endorser may release the holder from making objections to non-recognition or non-use of money, thereby allowing the holder to exercise their rights of recourse.
This specification does not release the guarantor from the obligation to submit the bill within the specified time or from the duty to notify the previous endorser or drawer of the lack of trust in the bill. Additionally, the burden of proving non-compliance with the time limit falls on the party seeking to use this argument against the bill holder.
If the payer has recorded such terms, it will affect all contracting parties who have signed the bill. In such cases, any persisting objections must cover the associated expenses. If these terms are stipulated by the endorser and objections are made, the costs of objections may be recovered from the other parties who signed the bill.
Section 965 Domestic Bills – Notification of Refusal to Accept or Use Money
In the case of domestic bills, if the payer records a message in the bill of exchange refusing acceptance or use of the money, it must include the date of refusal, the payer’s signature, and specify that no objection is necessary. The payer must send a notice of lack of confidence to the person against whom they intend to take recourse within four days after the date of refusal to provide such assurance.
Section 966 Notice of Lack of Confidence for Non-Guarantee or Non-Use of Money
Notice of lack of credibility in cases of non-guarantee or non-use of money must include:
Date entered in the bill of exchange
Name or brand of the payer
Amount on the bill
Due date of the money
Name or brand and office of the bill holder
Date of objection or date of refusal to accept or use the money
Statement indicating that the payer did not guarantee or use the money according to the bill
Section 967 Rights Against Contracting Parties
Regarding bills of exchange, those who make payment, guarantee it, endorse it, or guarantee it with an aval must collectively bear responsibility to those who have the right to bring charges against any of these persons, arranged or combined, without interruption, proceeding in the order in which they were bound.
The same rights apply to every person who signs the bill and takes possession of it, in order to enforce these rights against those who were previously bound.
A claim against one contracting party who must be held liable does not prevent legal action against other contracting parties, even those who entered into the contract later.
Section 968 Demands from the Person with Right of Recourse
The person with the right of recourse may demand from the person against whom they have the right:
The amount of money on the bill of exchange that was not accepted or applied, including interest if interest is stipulated.
Interest at a rate of five percent per annum from the due date.
Expenses for objection and sending notices to the next endorser and the payer, along with any other expenses.
Discounted fees, calculated at 1/6 percent of the principal amount as per Section 968(4). No charges exceeding this rate are permissible.
If the right of recourse is exercised before the due date, the bill amount is reduced by five percent.
Section 969 Demands by the Contracting Party Using the Money
The contracting party who takes possession and uses the money according to the bill of exchange may demand from all liable contracting parties:
The full amount of money spent.
Interest on that amount, calculated at five percent per year from the date the money is used.
Various expenses incurred.
Deductions from the principal amount of the bill of exchange as specified in Section 968(4).
Section 970 Rights of Recourse and Endorsement Cancellation
All parties to the contract who are liable and have recourse, or are in a position to have recourse, may use the money and demand the bills for themselves, including objections and accounts of money received.
All endorsers who have taken possession and used the money according to the bill of exchange may cancel their own endorsements and those of endorsers subsequent to them.
Section 971 Limitation on Right of Recourse
The payer, the certifier, and the previous endorser who endorses or transfers the bill of exchange to another person do not have the right to recourse against the contracting party to which they are already liable under the bill.
Section 972 Right of Recourse after Partial Certification
In cases where the right of recourse is exercised after partial certification, the contracting party who used the money without guaranteeing it may be required to annotate the use of this money on the bill and issue a receipt for themselves. Additionally, the bill holder must provide a certified copy of the bill, including objections, to that party so they can continue to exercise their rights of recourse later.
Section 973 Loss of Right to Recourse
When the following time limits have expired:
Specifying the time for submitting a bill of exchange for the use of money upon seeing it or within a specified period after seeing it.
Setting a time limit for making objections to non-recognition or non-use of money.
Specifying the time for submitting a bill for the use of money in cases where there is a stipulation that “No objections necessary.”
The holder loses the right to recourse against the endorser, payer, and other liable contracting parties, except the certifier. Furthermore, if the bill of exchange is not submitted for certification within the time limit specified by the drawer, the person would lose the right to recourse both for non-use of the money and lack of guarantee, unless the regulations indicate that the payer intended only to release themselves from certification liability. If the time limit for submitting the bill of exchange is stipulated in the endorsement, only the endorser can take advantage of that provision.
Section 974 Submission of Bills and Objections
Submitting a bill of exchange and making objections are essential. However, if there is an unavoidable necessity that prevents this within the specified time limit, the deadline may be extended.
If an unavoidable necessity exists, the person must promptly notify the next endorser, and this notice must be written on the bill or registration form, dated, and signed by someone other than the endorser. The provisions of Section 963 must be adhered to.
Once the necessity ceases, the person must promptly present the bill for certification or use of the money and, if necessary, make objections. If the unavoidable necessity persists beyond thirty days after the bill is due, the right of recourse may be exercised, and the submission of bills and objections becomes unnecessary.
For bills that allow money to be used upon seeing or within a certain period after seeing, if a thirty-day period is specified, it starts from the day the notice of unavoidable necessity is given to the endorser, even if it is before the bill submission deadline.
PART VII
BILLS OF EXCHANGE IN A SET
Section 975 Deck of Bills of Exchange
A bill of exchange, in addition to being payable to the holder, may also be issued in pairs or multiple copies. These pairs must be numbered within the instrument itself. If not specified, each bill of exchange can be treated as a single bill, even if separated into different copies.
Any holder of a bill not specified as issued in a single copy may request delivery of two or more copies to themselves, covering the expenses. In this case, they must address the next endorser, who must continue this process down the line until it reaches the payer. Furthermore, all endorsers must endorse their respective copies of the bill.
Section 976 Endorsement of Multiple Copies
If a holder of a bill of exchange endorses two or more copies to different persons, each endorser is liable for the copy they endorsed. It is as if each pair of copies were treated as separate bills.
Section 977 Ownership of Multiple Copies
If two or more copies of a bill have been transferred to different legal holders, the person who first acquired the bill is considered the true owner. However, this section does not affect the rights of a person who lawfully accepted or used the money according to the first bill presented to them.
Section 978 Certification of Copies
Certification can be written in any form but must be done only once, regardless of the number of copies.
If a payer certifies more than one version and these certified copies are held by different lawful holders, the payer is liable for each certified copy as if they were separate bills.
Section 979 Liability for Certified Copies
If a person certifies a bill but does not require delivery of the certified copy to themselves, and a certified copy falls into the hands of a lawful holder when due, the certifier is liable to the holder of that copy.
Section 980 Treatment of Torn Copies
Unless otherwise specified, if any copy of a bill is torn into pieces and one piece is used to spend money or otherwise, the entire bill is considered to be invalidated.
Section 981 Surrender of Certified Copies
When a contracting party sends a copy to be certified, they must write a statement in another copy stating that the copy is in the possession of the sender. The sender must surrender the original bill to the legal holder of the certified copy.
If the sender refuses to surrender the bill, the holder cannot exercise their right of recourse until they object, stating:
- That the certified copy requested was not surrendered.
- That it is not possible to have it certified or use the money with another party.
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