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How to Draft a Contract

It is not an exaggeration: a contract in a liberalistic (legally speaking) country as Thailand, is a real Majesty. The law, since immemorial time, in any 'corpus lex' (body of laws), whose origins lay as far in time as the ancient Romans, literally recites: "A contract has force and effect of law between the parts". If it is true that in most western countries, this principle of 'freedom of contract' has been eroded over time by an overwhelming bureaucracy and unnumbered laws that 'de facto' limit the real "contractual freedom", in Thailand this liberty is still quite relevant. Consequently, and for this very reason, before signing any contracts, we should use double cautiousness.

General principles in drafting agreements:

- Place of signing, date of agreement, names and addresses of parties

- Objective

- Scope of work / details of goods

- Fees / prices

- Period of Agreement

- Language

- Breaches / termination / damages

- Confidentiality

- Fees, taxes, duties

- Applicable law

- Court / Arbitration

- Duplicate

- Witnesses

Essential Points


 - make sure to clearly indicate all parts and to include a signed copy of their passports or ID cards and addresses*.

 - always demand to sign a contract at the presence of two witnesses and to include signed copies of 'their' documents as well.

 - The parts must sign all pages of the agreement not just the last one.*

 - always specify all the dates, including the "limits" of time within the contract should be respected.

 - Clearly specify the penalties or the consequences should one of the parts do not respected all the clauses of the contract within the agreed dates.

 - Always specify as many details as you can.


Competent Authority


- Specify the competent court in case of litigation, which should preferably be the one where the contract has been signed or where the assets or activities are located.

 - The arbitration clause. 'arbitration' is generally advisable to protect the interest of big corporations (usually in order to avoid never-ending court cases), but I would not suggest to private people to subscribe to such a clause for it can become a real double-edge sword The Thai courts of Justice are more then fine to protect you and they always seek compromises and agreements before commencing a court litigation




Remember that, if a contract is written in two languages, English and Thai for example, the Thai language will prevail by law. This is, in fact, a very essential point:  a contract well written in Thai, will avoid ambiguities and safe you further costs of translations, but you should always demand a certified translation in English or in the language that you fully understand.


Methods of Payment


Better paying any sum of money with traceable methods:
 bank transfers or checks, not cash.


  • Remember that stop paying the sums requested or expected as specified in a contract without any reason (for instance stop paying a rent because your landlord doesn't take good care of the garden or stop corresponding the agreed installments for the purchase of a condo or, even worse, the alimony to a wife, children etc.) such a behavior will put you in the wrong, even if you are right, and you will be in most cases considered the part in default.

  • In other words a good contract will establish your right, but to have them accomplished by the counterpart in case of litigation or in case should one of the part miss to comply with one or more points, only a tribunal can enforce it and order a constraining action. Not you!

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