Thailand Civil and Commercial Code Sections-982-1011

CHAPTER III

PROMISSORY NOTES

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Section 982 Promissory Note

A promissory note is a written instrument in which one person, called the issuer of the note, promises to pay a certain amount of money to another person, or as directed by another person called the payee.

Section 983 Requirements of a Promissory Note

A promissory note must include the following items:

1. A statement indicating that it is a promissory note.
2. An unconditional promise to pay a definite amount of money.
3. The due date of the money.
4. Place where the money is to be used.
5. Name or brand of the recipient of the money.
6. Date and place of issuance of the promissory note.
7. Signature of the issuer of the note.

Section 984 Imperfect Promissory Note

An instrument missing any of the items specified in the previous section is not considered a perfect promissory note, except in the following cases:

If the promissory note does not specify when the money will be paid, it is considered payable on demand.

If the place where the money is to be paid is not stated, the domicile of the issuer is considered the place of payment.

If the promissory note does not specify the place of issuance, it is considered issued at the domicile of the issuer.

If the date of issuance is missing, any lawful person acting in good faith may insert the correct date.

Section 985 Application of Bill of Exchange Provisions

All provisions of Chapter 2 regarding bills of exchange apply to promissory notes to the extent that they do not conflict with the nature of this type of instrument, namely Sections 911, 913, 916, 917, 919, 920, and 922 to 926, 938 to 947, 949, 950, and 954 to 959, and 967 to 971.

Section 986 Liability of Promissory Note Issuer

The issuer of the promissory note is bound in the same manner as the certifier of a bill of exchange.

A promissory note that allows payment at a certain time after being presented must be submitted to the issuer of the note for acknowledgment within the time limit specified in Section 928. This time limit starts from the date when the note is acknowledged by the issuer with a signature. If the issuer rejects the note and refuses to acknowledge or date it, this rejection must be evidenced by a statement of objection. The date of objection is considered the starting day for counting the time limit.

CHAPTER IV

CHEQUES

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Section 987 Cheque

A Cheque is a written instrument in which one person, called the drawer, orders the bank to pay a certain amount of money on demand to another person, or as directed by another person called the payee.

Section 988 Requirements of a Cheque

The Cheque must contain the following items:

1. A statement indicating that it is a Cheque.
2. An unconditional order to pay a fixed amount of money.
3. Name or brand and office of the bank.
4. Name or brand of the recipient of the money, or a notice stating that the money is to be paid to the bearer.Place where the money is to be used.
5. Date and place of issuance of the Cheque.
6. Signature of the payer.

Section 989 Application of Bill of Exchange Provisions

All provisions of Chapter 2 regarding bills of exchange apply to Cheques to the extent that they do not conflict with the nature of this type of instrument, namely Sections 910, and 914 to 923, 925, 926, and 938 to 940, 945, 946, 959, 967, and 971.

If it is a Cheque issued from abroad, the following provisions shall also apply: Sections 924, and 960 to 964, and 973 to 977, and 980.

Section 990 Submission of the Cheque

The holder of the Cheque must present the Cheque to the bank for payment. If the Cheque is to be used in the same city where it was issued, it must be submitted within one month from the date of issuance. If the Cheque is to be used elsewhere, it must be submitted within three months. Otherwise, the holder loses the right to seek recourse against all endorsers and also forfeits rights against the payer, except to the extent that the payer can prove damage due to negligence in not presenting the Cheque. Furthermore, the drawer of the Cheque is released from liability, and the holder inherits the payer’s rights against the bank.

Section 991 Bank’s Obligation to Honor the Cheque

The bank is obligated to withdraw money from an account for a Cheque issued by a person who previously transacted with the bank, except in the following cases:

1. Insufficient funds in the account of the previous transact or to cover the Cheque.
2. The Cheque is presented for payment after six months from the date of issuance.
3. Notice that the Cheque was lost or stolen has been received.

Section 992 Bank’s Duties and Powers

The duties and powers of the bank to pay the Cheque are final under the following circumstances:

1. There is a notice prohibiting the payment of money.
2. Knowledge that the payer has passed away.
3. Knowledge that a court has issued a temporary protective order or declared the drawer bankrupt, or an announcement of such an order has been made.

Section 993 Bank Certification and Crossing of Cheques

If the bank endorses a Cheque with words such as “can be used” or “money can be used” or any equivalent expression, the bank is bound as the primary debtor to pay the money to the holder of the Cheque.

If the holder of the Cheque is the manager, the bank must endorse a certification to that effect, releasing the drawer and all endorsers from liability under the Cheque.

If the bank endorses a certification message at the request of the payer, the payer and all endorsers are not released from liability.

Section 994 Types of Crossed Cheques

A Cheque with two parallel lines drawn across its face, with or without the words “and company” or any abbreviation between these lines, is known as a general crossed Cheque. The money according to such a Cheque can only be used through a bank.

If a specific bank’s name is filled in between the parallel lines, it is called a special crossed Cheque, and the money according to that Cheque can only be used through that specific bank.

Section 995 Crossing of Cheques

1. If a Cheque does not have crossed lines, the drawer or any holder may draw them across, either as a general crossing or a specific crossing.
2. A general crossed Cheque may be converted into a special crossed Cheque.
3. A general crossed Cheque with the addition of the words “Do not negotiate” is valid.
4. A crossed Cheque can only be presented to any bank, and that bank may further present it to other banks for collection.
5. A Cheque without crossed lines or a general crossed Cheque can be sent for collection to any bank, and that bank may draw lines only for itself.

Section 996 Importance of Crossing

Crossing a Cheque as permitted in the preceding section is a crucial aspect of the Cheque. Any attempt to erase it would be unlawful.

Section 997 Responsibility of Banks with Crossed Cheques

A crossed Cheque, specifically drawn for one or more banks, must not be cashed by any other bank for its own use unless acting as a collection agent for the named bank.

If any bank cashes a crossed Cheque contrary to its instructions and not in good faith, it shall be liable to the true owner of the Cheque for any damages incurred.

However, if a Cheque is presented for payment without appearing to be crossed or showing signs of alteration, and the bank uses the funds in good faith and without negligence, the bank shall not be liable and has no duty to return the funds.

Section 998 Use of Funds with Crossed Cheques

A bank that uses funds from a crossed Cheque honestly and without negligence, either as a general crossed Cheque to any bank or a specific crossed Cheque to a named bank or its collection agent, is party to the transaction. When the Cheque reaches the payee, the payer has the same rights and obligations as if the Cheque were used to directly pay the true owner.

Section 999 Rights and Obligations of Recipients

Any person receiving a crossed Cheque marked with “Do not negotiate” has no rights to the Cheque and cannot transfer greater rights than those held by the person from whom it was received.

Section 1000 Bank Liability for Cheques

A bank that receives funds for its former customer in accordance with a general crossed Cheque drawn specifically to it is liable only to itself. However, if it turns out that the former customer has no or defective rights to the Cheque, the bank’s receipt of the funds makes it liable to the true owner of the Cheque in any event.

CHAPTER V

PRESCRIPTION

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Section 1001 Limitation Period for Certifiers of Bills of Exchange and Issuers of Promissory Notes

In cases against the certifier of a bill of exchange or the issuer of a promissory note, you are prohibited from filing a lawsuit after three years have elapsed from the date on which the money became due.

Section 1002 Limitation Period for Holders Suing Endorsers and Drawers

In cases where the holder of the bill sues the endorser and the drawer, you are prohibited from filing a lawsuit after one year has elapsed from the date of objection made within the specified time period, or from the date the bill is due in cases where there is no need for objection.

Section 1003 Limitation Period for Endorsers Suing Each Other and Taking Recourse Against Payers

In cases where endorsers sue each other and take recourse against the payer of the bill, you are prohibited from filing a lawsuit after six months have elapsed from the date the endorser took the bill and used the money, or from the date the endorser himself was sued.

Section 1004 Interruption of Statute of Limitations

When the statute of limitations is interrupted due to any action taken by one of the parties to the bill, it will only affect that contracting party.

Section 1005 Preservation of Original Debt

If a bill has been made, transferred, or endorsed for any debt and the rights under the bill have been lost due to the statute of limitations or failure to proceed as required, the original debt still exists according to prevailing legal principles. This is to the extent that the debtor is not prejudiced by it, unless otherwise agreed upon.

CHAPTER VI

FORGED, STOLEN AND LOSR BILLS

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Section 1006 Forgery of Signatures

If a signature on a bill is forged, it does not affect the validity of the other signatures on the bill.

Section 1007 Alterations to Bills

If someone makes a significant alteration to the contents of any bill or certificate of bills without the consent of all liable parties under the bill, the bill becomes invalid. This is unless the party who made the change or those who subsequently endorsed it agree to the change. However, if a bill has undergone a significant alteration that is not apparent and it falls into lawful hands, the holder may enforce the bill as if no changes were made. Significant changes include alterations to the posting date, the amount of money, the time or place of spending the money, or filling in the place where money is spent when it was not specified by the guarantor.

Section 1008 Forgery of Signatures (continued)

Subject to this Code, a signature on a bill is considered forged if it is signed without the authorization of the person purported to be the signer. Such a forged or unauthorized signature is invalid. Anyone seeking to rely on such a signature to retain possession of the bill or to enforce the payment of money against any party to the bill cannot do so, unless the party whose money is to be withheld or enforced against is estopped from denying the forged or unauthorized signature as a defense. However, this section does not affect the validation of a signature made without authority if it is not forged.

Section 1009 Banks and Cheques with Unauthorized Endorsements

If a person presents a Cheque for payment to any bank, directing that the money be paid as per the person’s instructions, and the bank uses the money in the ordinary course of business honestly and without negligence, the bank is not obligated to verify the authenticity of endorsements by subsequent parties claiming to have authority over the endorsements. Even if such endorsements are fake or unauthorized, the bank is deemed to have used the money properly.

Section 1010 Lost or Stolen Bills

Upon becoming aware that a bill has been lost or stolen, the holder must immediately notify in writing the issuer of the bill, the payer, and any endorsers, guarantors, or aval providers, as applicable, to prevent the use of the money according to the bill.

Section 1011 Replacement of Lost Bills

If a bill is lost before its specified time for use has elapsed, the holder may request the drawer to issue another bill of the same terms. In this case, the holder may offer security to the payer to indemnify against any damage if the lost bill is later found. If the payer refuses to issue a replacement bill under these conditions, the payer may be compelled to do so.

 

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