Thailand Civil and Commercial Code Sections-354-394
TITLE II
CONTRACT
CHAPTER I
FORMATION OF CONTRACT
Section 354 A person who, without specifying a period for acceptance, makes an offer to another at a distance cannot withdraw his offer within a time during which notice of acceptance might reasonably be expected.
Section 355 An offer made to a person who is present without specifying a period for acceptance may be accepted only there and then. This also applies to an offer made by one person to another on the telephone.
Section 356 An offer ceases to be binding if it is refused by the offeror or if it is not accepted in due time according to the three preceding sections.
Section 357 If the notice of acceptance arrives late, but it is apparent that it was sent in such a manner that in the ordinary course of things it ought to have arrived in due time, the offeror, unless he has already acted otherwise, must without delay give notice to the other party of the delayed arrival.
Section 358 If the offeror fails to give the notice mentioned in the foregoing paragraph, the notice of acceptance is deemed to have been given in due time.
Section 359 If the acceptance of an offer arrives late, it is deemed to be a new offer. An acceptance with additions, restrictions, or other modifications is deemed to be a refusal coupled with a new offer.
Section 360 The provisions of Section 169, paragraph 2, do not apply if the offeror has declared a contrary intention or if, before accepting, the other party had notice of the offeror’s death or loss of capacity.
Section 361 A contract between persons at a distance comes into existence at the time when the notice of acceptance reaches the offeror. If, according to the declared intention of the offeror or ordinary usage, no notice of acceptance is necessary, the contract comes into existence at the time of the occurrence of an act considered as a declaration of acceptance.
Section 362 A person who, by advertisement, promises to give a reward to anyone who performs a certain act is bound to give such a reward to any person who performs the act, even if the person did not act with a view to receiving the reward. The decision on whether any competitor fulfills the conditions of the promise within the period, or which competitor deserves preference, shall be made by the umpire named in the advertisement or, in the absence of such, by the promisor of the reward. The decision is binding on the parties concerned.
In the case of equality of merit, the provisions of Section 364, paragraph 3, apply correspondingly. The transfer of ownership of the thing produced may be demanded by the promisor only if the advertisement specified that such a transfer would be made.
Section 366 So long as the parties have not agreed upon all points of a contract on which, according to the declaration of even one party, agreement is essential, the contract is, in case of doubt, not concluded. An understanding concerning particular points is not binding, even if they have been noted down.
If it is agreed that the contemplated contract shall be put into writing, in case of doubt, the contract is not concluded until it is put in writing.
Section 367 If the parties to a contract, which they regarded as concluded, have in fact not agreed on one point upon which an agreement was to be settled, the parts that were agreed upon are valid if it can be inferred that the contract would have been concluded even without settling this point.
Section 368 Contracts shall be interpreted according to the requirements of good faith, with ordinary usage being taken into consideration.
CHAPTER II
EFFECT OF CONTRACT
Section 369 A party to a reciprocal contract may refuse to perform their obligation until the other party performs or tenders performance of their obligation. However, this does not apply if the other party’s obligation is not yet due.
Section 370 If the object of a reciprocal contract is the creation or transfer of a real right in a specific thing, and such a thing is lost or damaged due to a cause not attributable to the debtor, the loss or damage falls upon the creditor.
For a non-specific thing, the provisions of the foregoing paragraph apply from the time when the thing has become specific in accordance with the provisions of Section 195, paragraph 2.
Section 371 The provisions of the foregoing section do not apply if the thing which forms the subject of a reciprocal contract, depending upon a condition precedent, is lost or destroyed while the condition is pending. If the thing is damaged due to a cause not attributable to the creditor, the latter, when the condition is fulfilled, may at their option either demand performance with a reduction of their counter-performance or rescind the contract, provided that in the case where the cause of the damage is attributable to the debtor, the creditor’s right to compensation is not affected thereby.
Section 372 Except in the cases mentioned in the two foregoing sections, if an obligation becomes impossible to perform due to a cause not attributable to either party, the debtor has no right to receive the counter-performance. If performance becomes impossible due to a cause attributable to the creditor, the debtor does not lose their right to the counter-performance. However, the debtor must deduct what they save as a result of the release from performance, or what they acquire or maliciously omit to acquire by a different application of their faculties. The same rule applies if performance due from one party becomes impossible due to a circumstance for which they are not responsible at the time when the other party is in default of acceptance.
Section 373 An agreement made in advance exonerating a debtor from their own fraud or gross negligence is void.
Section 374 If a party agrees by contract to make a performance to a third person, the third person has the right to claim such performance directly from the debtor. In this case, the third person’s right comes into existence when they declare their intention to take the benefit of the contract to the debtor.
Section 375 After the right of the third person has come into existence in accordance with the provisions of the foregoing section, it cannot be charged or extinguished by the parties to the contract.
Section 378 Defenses arising from the contract mentioned in Section 374 can be set up by the debtor against the third person who receives the benefit of the contract.
CHAPTER III
EARNEST AND STIPULATED PENALTY
Section 377 If, upon entering into a contract, something is given as earnest, this is deemed to be proof of the conclusion of the contract. It also serves as security for the performance of the contract.
Section 378 In the absence of an agreement to the contrary, earnest is:
- To be returned or treated as part-payment upon performance.
- To be forfeited if the party giving it fails to perform, or if the performance becomes impossible due to circumstances for which the party is responsible, or if the contract is rescinded due to the party’s fault.
- To be returned if the party receiving it fails to perform, or if the performance becomes impossible due to circumstances for which the party receiving it is responsible.
Section 379 If the debtor promises the creditor the payment of a sum of money as a penalty in case of non-performance, the penalty is forfeited if the debtor is in default. If the performance due consists of forbearance, the penalty is forfeited as soon as any act contrary to the obligation is committed.
Section 380 If the debtor has promised a penalty for failing to perform the obligation, the creditor may demand the forfeited penalty in lieu of performance. If the creditor declares to the debtor that they are demanding the penalty, the claim for performance is barred.
If the creditor has a claim for compensation for non-performance, they may demand the forfeited penalty as the minimum amount of the damage. Proof of further damage is admissible.
Section 381 If the debtor has promised a penalty for failing to perform the obligation properly, such as not performing at the fixed time, the creditor may demand the forfeited penalty in addition to the performance.
If the creditor has a claim for compensation for improper performance, the provisions of Section 380, paragraph 2, apply. If the creditor accepts the performance, they may demand the penalty only if they reserve the right to do so at the time of acceptance.
Section 382 If something other than the payment of a sum of money is promised as a penalty, the provisions of Sections 379 to 381 apply. The claim for compensation is barred if the creditor demands the penalty.
Section 383 If the forfeited penalty is disproportionately high, it may be reduced to a reasonable amount by the Court. In determining reasonableness, every legitimate interest of the creditor, not merely their property interest, shall be taken into consideration. After payment of the penalty, the claim for reduction is barred.
The same rule applies to cases apart from those provided for by Sections 379 and 382, if a person promises a penalty for doing or forbearing to do an act.
Section 384 If the promise is invalid, an agreement for a penalty for non-performance of the promise is also invalid, even if the parties knew of the promise’s invalidity.
Section 385 If the debtor contests the forfeiture of the penalty on the grounds of having performed the obligation, they must prove the performance, unless the performance due from them consisted of forbearance.
CHAPTER IV
RESCISSION OF CONTRACT
Section 386 If, by contract or by the provisions of law, one party has the right of rescission, such rescission is made by a declaration of intention to the other party. The declaration of intention in this paragraph cannot be revoked.
Section 387 If one party does not perform their obligation, the other party may fix a reasonable period and notify the first party to perform within that period. If the first party does not perform within that period, the other party may rescind the contract.
Section 388 If the object of a contract, according to its nature or to an intention declared by the parties, can be accomplished only by performance at a fixed time or within a fixed period, and such time or period has passed without one of the parties having performed, the other party may rescind the contract without the notification mentioned in the foregoing section.
Section 389 If performance becomes wholly or partially impossible due to a cause attributable to the debtor, the creditor may rescind the contract.
Section 390 If there are several persons on one side or the other in a contract, the right of rescission may be exercised only by all and against all. If the right of rescission is extinguished with respect to one of those entitled, it is also extinguished with respect to the others.
Section 391 If one party has exercised their right of rescission, each party is bound to restore the other to their former condition; however, the rights of third persons cannot be impaired.
Any money that is to be repaid in the case of rescission shall accrue interest from the time it was received.
For services rendered and for the use of a thing, restitution shall be made by paying the value, or, if the contract stipulated a counter-payment in money, that shall be paid.
The exercise of the right of rescission does not affect a claim for damages.
Section 392 The obligations of the parties resulting from rescission shall be performed according to the provisions of Section 369.
Section 393 If no period is fixed for the exercise of the right of rescission, the other party may fix a reasonable period and notify the party having the right of rescission to declare within such period whether they will rescind the contract. If notice of rescission is not received within that period, the right of rescission is extinguished.
Section 394 The right of rescission is extinguished if the person entitled to it has, by their own act or fault, essentially damaged the thing which is the subject of the contract, rendered restitution thereof impossible, or altered it into a different kind of thing by working it up or remodeling it. If the thing which is the subject of the contract has been lost or damaged without the act or fault of the person entitled to rescission, the right of rescission is not extinguished.
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