Thailand Civil and Commercial Code

TITLE II
PERSONS
CHAPTER II
JURISTIC PERSONS

General Provisions

Section 65. Law Created Person

A juristic person can come into existence only by virtue of this Code or of other law.

Section 66. Juristic Person’s Rights and Duties

A juristic person has rights and duties conformity with the provisions of this Code or of other law within the scope of its power and duties, or its object as provided by or defined in the law, regulation or constitutive act.

Section 67. Juristic Person has the same rights and duties as a natural person.

Subject to Section 66, a juristic person enjoys the same rights and is subject to the same duties as a natural person, by reason of their nature, may only be enjoyed or incurred only by a natural person.

Section 68. Domicile of Juristic Person

The domicile of a juristic person is the place where it has its principal office or establishment, or which has been selected as a special domicile in its regulation or constitutive.

Section 69. Branch of Juristic Person can be a Domicile

In the case where a juristic person has several establishments or has its branch office, the place of its branch office may also be considered its domicile as to acts there performed.

Section 70. Company Directors

A juristic person must have one or several representatives as prescribed by the law, regulations or its constitutive act, decisions as to the affairs of juristic persons are made by a majority of the representatives.

Section 71. If no Directors, then decisions made by voting shares.

In the case where a juristic person has several representatives, if it is not otherwise provided by the law, or defined in regulations or constitutive act, decisions as to the affairs of juristic person are made by a majority of representatives.

Section 72. Changes in Directors or Shareholders cannot impede the Rights of Third Parties

The change of representatives of juristic person or of any restriction, or modification of the power of representatives shall be effective after having complied with the law, regulations or its constitutive act, but cannot be set up against third person acting in good faith.

Section 73. Temporary Replacement Representative if there is a Vacancy

If a vacancy occurs among the representatives of juristic person, and there is reason to believe that damage might ensue from delay, the Court may, on the application of any interested person or of the Public Prosecutor, appoint a temporary representative.

Section 74. Representative must represent the interest of the Juristic Person

In a matter in which the interested of a juristic person conflict with those of the representative of juristic person, the latter has no representative power.

Section 75. Appointment of Special Representatives

If, in the case under Section 74, it causes a non-existence of the representatives of juristic person, or number of the remaining representatives cannot constitute quorum of the meeting or is sufficient to execute such matter, if it is not otherwise provided by the law, or defined in its regulations or constitutive act, the provisions of Section 73 shall apply to the appointment of special representatives, ‘mutatis mutandis’.

Section 76. Juristic Person responsible for actions of its Representatives

A juristic person is bound to make compensation for any damage done to other persons by its representatives or the person empowered to act on behalf of the juristic person in the exercise of their functions, saving its right of recourse against the causers of the damage.

If damage is done to other persons by an act which is not within the scope of the object or power and duties of the juristic person, all the persons as mentioned in paragraph one who agreed such act or executed it, are jointly liable to make compensation.

Section 77. Application of Agency

The provisions on Agency of this Code shall apply to the relationship between the juristic persons and its representatives, and between the juristic person or its representative and third persons, ‘mutatis mutandis’.

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TITLE IV
JURISTIC ACTS

General Provisions

Section 149. Juristic Acts

Juristic act are voluntary lawful acts, the immediate purpose of which is to establish between persons relations, to create, modify, transfer, preserve or extinguish rights.

Section 150. Void Acts

An act is void if its object is expressly prohibited by law or is impossible, or is contrary to public order or good morals.

Section 151. Not Automatically Voidable if not against Public Order or Good Morals

An act is not void on account of its differing from a provision of any law if such law does not relate to public order or good moral.

Section 152. Wrong Form – Act Void

An act which is not in the form prescribed by law is void.

Section 153. Act by a Person without Capacity to Act

An act which does not comply with the requirements concerning capacity of person is voidable.

Declaration of Intention

Section 154. Hidden Intention

A declaration of intention is not void on the ground that the declarant in the recesses of his mind does not intended to be bound by his expressed intention, unless this hidden intention was known to the other party.

Section 155. Fictitious Intent cannot be used against Innocent Third Party

A declaration of intention made with the connivance (wrongdoing) of the other party which is fictitious is void; but its invalidity cannot be set up against third persons injured by the fictitious declaration of intention and acting in good faith.

If a declaration of fictitious intention under paragraph one is made to conceal another juristic act, the provisions of law relating to the concealed act shall apply.

Section 156. Intention based on Mistake

A declaration of intention is void if made under a mistake as to an essential element of the juristic act.

The mistake as to an essential element of the juristic act under paragraph one are for instance a mistake as to a character of the juristic act, a mistake as to a person to be a partner of the juristic act and a mistake as to a property being an object of the juristic act.

Section 157. Intent based on a Mistake on the Quality of a Person

A declaration of intention is voidable if made under a mistake as to a quality of the person.

Mistake under paragraph one must be a mistake as to the quality of the person which is considered as essential in the ordinary dealings, and without which such juristic act would have not been made.

Section 158. Mistake based on Gross Negligence

If the mistake under Section 156 or Section 157 was due to the gross negligence of the person making such declaration, he cannot avail himself of such invalidity.

Section 159. Intent Produced by Fraud

A declaration of intention produced by fraud is voidable.

An act under paragraph one is voidable on account of fraud only when it is such that without which such juristic act would not have been made.

When a party has made a declaration of intention owing to a fraud committed by a third person, the act is voidable only if the other party knew or ought to have known of the fraud.

Section 160. Avoiding Declaring Intention

The avoidance of a declaration of intention produced by fraud cannot be set up against a third person acting in good faith.

Section 161. Incidental Fraud

If the fraud is only incidental that is to say it has merely induced a party to accept more onerous terms than would otherwise have done, such party can only claim compensation for damage resulting from such fraud.

Section 162. Hiding Material Information

In bilateral juristic acts, the intentional silence of one of the parties in respect to a fact or quality of which the other party is ignorant, is deemed to be a fraud if it is proved that, without it, the act would not have been made.

Section 163. Both Parties Acted with Fraud

If both parties acted with fraud, neither of them can allege it to void the act or to claim compensation.

Section 164. Declaration Made Under Distress

Duress, in order to make an act voidable, must be imminent and so severe that makes him fear and without it, the act would not have been made.

Section 165. Threat of a use of a right is not duress

The threat of the normal exercise of a right is not considered duress. Any act made owning to reverential fear is not considered an act made under duress.

Section 166. Duress spoils a Juristic Act

Duress vitiates the juristic act, even when it is exercised by a third person.

Section 167. Determining the True Intent

In determining a case of mistake, fraud or duress, the sex, age, position health, temperament of the person made the intention and all other circumstances and environment which may relate to that act shall be taken into consideration.

Section 168. Declaration is Active when Received

A declaration of intention made to a person in his presence takes effect from the time when it becomes known to the receiver of the intention. This also apply to the declaration of intention made by one person to the other through telephone, other communication devices, or other means through which similar communication can be made.

Section 169. Declaration is active after it reaches the receiver, not previously or simultaneously

A declaration of intention made to a person not in his presence takes effect from the time when it reached the receiver of the intention. If does not become effective if a revocation reaches him previously or simultaneously.

Even though the person who made a declaration of intention dies, becomes incompetent or quasi-incompetent by an order of the Court after it has been sent, the validity of declaration is not impaired thereby.

Section 170. A Declaration of Intention made to a person without capacity is not legally binding

If the declaration of intention is made to a minor or a person adjudged incompetent or quasi-incompetent, it cannot be set up against him unless his legal representative, guardian or curator, as the case may be, has knowledge of it or has given prior consent to it.

The provisions of paragraph one do not apply to the declaration of intention concerning any matter that the minor or the incompetent is required by law to make by himself.

Section 171. True Intention is more important words

In the interpretation of a declaration of intention, the true intention is to be sought rather than the literal meaning of the words or expressions.

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OBLIGATIONS
TITLE IV

Undue Enrichment

Section 406. Undue Enrichment

Any person who, through an act of performance made by another person or in any other manner, obtains something to the prejudice of such other person without legal ground, must return it to the latter. The acknowledgment of the existence or non-existence of a debt is deemed to be an act of performance.

The same provision shall apply if something has been obtained on account of a cause which has not been realized or of a ceased to exist.

Section 407. Freely Done knowing it won’t effect Performance

A person who has freely done an act as if in performance of an obligation, knowing that he was not bound to effect the performance, is not entitled to restitution.

Section 408. The following persons are not entitled to restitution:

• A person who performs an obligation subject to a time clause before the time has arrived
• A person who performs an obligation which has been barred by prescription
• A person who performs an obligation in compliance with a moral duty or with the requirements of social propriety.

Section 409. Non-Debtor Performs Obligation

When a person who is not a debtor has performed an obligation by mistake and the creditor, in consequence thereof, has in good faith destroyed or obliterated the documentary evidence of the obligation or given up any security or lost his right by prescription, the creditor is not bound to make restitution.

The provisions of the foregoing paragraph do not prevent the person who has performed from exercising a right of recourse against the debtor and his surety, if any.

Section 410. Knowledge that Performance would not Produce Results

A person who had made a performance for an intended result which is not produced is not entitled to restitution, if, from the beginning, it was known to him that the production of the result was impossible or if he was prevented the result in violation of good faith.

Section 411. Legal Prohibition for Performance

A person who has made an act of performance, the purpose of which is contrary to legal prohibition or good morals, cannot claim restitution.

Section 412. Restitution

If the property which was unduly received is a sum of money, restitution must be made in full, unless the person who received it was in good faith in which case he is only bound to return such part of his enrichment as still exists at the time when restitution is demanded.

Section 413. Receiving Property in Good Faith

When the property which must be returned is other than a sum of money and the person who received it was in good faith, such person is only bound to return it in such condition as it is and is not responsible for less or damage to such thing, but he must return whatever he has acquired as compensation for such loss or damage. If the person who received the property was in bad faith he is fully responsible for the loss or damage even caused by force majeur, unless he proves that the loss or damage would have happened in any case.

Section 414. Impossibility of Returning Property

If restitution is impossible on account of the nature of the property received or for any other reason, and the person who received the property was in good faith, such person is bound only to return such part of his enrichment as still exists at the time when restitution is demanded. If a person who received the property was in bad faith, he is bound to pay the full value of the property.

Section 415. Fruits of Property

A person who has received the property in good faith acquires the fruits thereon as long as such good faith continues.

In case where he has to return such thing, he is deemed to be in bad faith from the time when restitution is demanded.

Section 416. Expenses to Preserve Property

Expenses which were necessary for the preservation of the property or for its maintenance or repair must be reimbursed in full to the person who returns such property.

However such person cannot claim reimbursement of the ordinary expenses for maintenance, repairs or charges made within the time during which he has acquired the fruits.

Section 417. Increase in Value after Returning Property

For expenses other than those provided in paragraph 1 of the foregoing section the person who returns the property can claim reimbursement only if they were made while he was in good faith and if the value of the property is increased by such expenses at the time of restitution, and only to the extent of such increase.

The provisions of Section 415 paragraph 2 apply correspondingly.

Section 418. Restoration of Alterations Made to Property

If the person who has in bad faith unduly received a property has made alternations in, or additions to it, he must return the property after having put it in its former condition at his own expense, unless the owner of the property chooses to have it returned in its present condition, in which case the owner must pay at his option either the cost of alterations or additions, or a sum representing the increased value of the property.

When restitution is to be made, if it is impossible to put it in its former condition or the property would be damaged thereby, the person who received the property must return it in such condition as it is and he is not entitled to compensation for any increase of value accruing to the property from such alterations or additions.

Section 419. Statute of Limitations for Undue Enrichment Claims

No action on account of undue enrichment can be entered later than one year from the time when the injured party became aware of his right to restitution or later than 10 years from the time when the right accrued.

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SPECIFIC CONTRACTS
TITLE I
SALE
CHAPTER I
NATURE AND ESSENTIALS OF THE CONTRACT OF SALE

General Provisions

Section 453. Sale

Sale is a contract whereby a person, called the seller, transfers to another person, called the buyer, the ownership of property, and the buyer agrees to pay to the seller a price for it.

Section 454. Reasonable Time to Respond to Sale

A previous promise of sale made by one party has the effect of a sale only when the other party has given notice of his intention to complete the sale and such notice has reached the person who made the promise.

If no time has been fixed in the promise for such notification, the person who made the promise may fix a reasonable time and notify the other party to give a definite answer within that time whether he will complete the sale or not. If within that time he does not give a definite answer, the previous promise loses its effect.

Section 455. Time of Sale

The time of the completion of the contract of sale is referred to hereafter as the time of sale.

Section 456. Sales of Immovable Property Requirements

A sale of immovable property is void unless it is made in writing and registered by the competent official. The same rule applies to ships or vessels of six tons and over, to steam launches or motor boats of five tons and over, to floating houses and to beasts of burden. (Car sales, homes, farm animals)

An agreement to sell or to buy any of the aforesaid property, or a promise of sale of such property is not enforceable by action unless there is some written evidence signed by the party liable or unless earnest is given, or there is part performance.

The provisions of the foregoing paragraph shall apply to a contract of sale of movable property where the agreed price is five hundred baht or upwards.

Section 457. Cost of Sale

The costs of a contract of sale are borne by both parties equally.

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SPECIFIC CONTRACTS
TITLE I
SALE
CHAPTER III

Section 486. Buyer’s Duties

The buyer is bound to take delivery of the property sold and to pay the price in accordance with the terms of the contract of sale.

Section 487. Price

The price of the property sold may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.

When the price is not determined as aforesaid, the buyer must pay a reasonable price.

Section 488. Defect

If the buyer has discovered defects in the property sold, he is entitled to withhold the price or part of it still unpaid, unless the seller gives proper security.

Section 489. Withholding Payment

The buyer is also entitled to withhold the price wholly or partly, if he is threatened, or has good reason to believe that he is about to be threatened, with an action by a mortgagee or by a person claiming the property sold, until the seller has caused the danger with which he is threatened to cease, or until the seller has given proper security.

Section 490. Fixed Payment Time

If a time is fixed for the delivery of the property sold, it is presumed that the same time is fixed for the payment of the price.

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SPECIFIC CONTRACTS
TITLE III
GIFT

Section 521. Gift

A gift is a contract whereby a person. Called the donor, transfers gratuitously a property of his own to another person, called the donee, and the donee accepts such property.

Section 522. Gift by Release of Obligation or Performance

A gift may be made by granting to the donee the release of an obligation or by performing an obligation due from the donee.

Section 523. Validity

A gift is valid only on delivery of the property given.

Section 524. Rights in Written Format

If a right represented by a written instrument is given, the gift is not valid unless such instrument is delivered to the donee and the gift is notified in writing to the debtor of the right.

Section 525. Gift of Property must be Registered

The gift of a property the sale of which must be made in writing and registered by such competent official is valid only when so made and registered by the competent official. In such case it is valid without delivery.

Section 526. Limit of Claim

If a gift or a promise for a gift has been made in writing and registered by the competent official and the donor does not deliver to the donee the property given, the donee is entitled to claim the delivery of it or its value, but he is not entitled to any additional compensation.

Section 527. Periodical Performance Extinguished upon Death

If a donor binds himself to make periodical performance the obligation is extinguished on the death either of the donor or the donee unless a contrary intention appears from the obligation.

Section 528. Demand for Return of Gift for Non-Performance

If the gift is encumbered with a charge and the donee fails to perform the charge, the donor may, under the conditions specified for the right of rescission in the case of reciprocal contracts, demand the return of the gift under the provisions relating to the return of undue enrichment in so far as the gift ought to have been applied to the performance of the change.

This claim is barred if a third party is entitled to require the performance of the charge.

Section 529. Insufficient Property Value

If the property given is not sufficient to satisfy the charge, the donee has to perform only to the extent of the value of the property.

Section 530. Liability for Encumbrances

If the gift encumbered with a charge, the donor is liable for defect or eviction in the same manner as the seller but only to the extent of the charge.

Section 531. Revocation of Gift for Ingratitude

The donor can claim revocation of a gift for an act of ingratitude only in the following cases.

1. If the donee committed a serious criminal offence punishable under the Penal Code against the donor, or
2. If the donee seriously defamed or insulted the donor, or
3. If the donee refused the donor who is in need of the necessaries of life while he was able to supply them.

Section. 532. Heir Revocation if Donee Killed Donor

The heir of the donor can claim revocation only if the donee has intentionally and unlawfully killed the donor or prevented him from revoking the gift.

However, the heir may continue an action which has been duly entered by the donor.

Section 533. Statute of Limitation for Revocation

A gift cannot be revoked if the donor has forgiven the donee, or if six months have elapsed since the time when the act of ingratitude came to knowledge of the person entitled to claim revocation.

No action can be claimed later than ten years after such act.

Section 534. Revocation = Undue enrichment

If the gift is revoked, the property shall be returned under the provisions of this Code concerning Undue Enrichment.

Section 535. Irrevocable Gifts

The following gifts are not revocable for ingratitude:

1. Gifts purely remuneration
2. Gifts encumbered with a charge
3. Gifts made in compliance with a moral duty
4. Gifts made in consideration of marriage

Section 536. Inheritance and Wills

A gift to take effect at the death of the donor is governed by the provisions of Law concerning Inheritance and Wills.

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Chapter 5: Extinction of Agency

Section 826. Revoking or Renouncing Agency

Agency is extinguished by the principal revoking or by the agent renouncing the agency.

It is also extinguished when either party dies or becomes incapacitated or bankrupt, unless the contrary appears from the terms of the agreement or the nature of the business.

Section 827. Revocation at any Time

The principal may revoke the authority and the agent may renounce the agency at any time.

Except in case of unavoidable necessity, the party who revokes or renounces the agency at a time which is inconvenient to the other party is liable to such party for any injury resulting therefrom.

Section 828. Death or Incapacity of the Principal

When agency is extinguished by the death of the principal or by the principal becoming incapacitated or bankrupt, the agent must take all reasonable steps to protect the interest entrusted to him until the heirs or representatives of the principal can protect such interest.

Section 829. Protecting the Interests of the Principal

When agency is extinguished by the death of the agent or the agent becoming incapacitated or bankrupt, the heir or the person having lawful charge of the agent’s estate must notify the principal and take steps to protect the interest of the principal as may be reasonable under the circumstances until the principal can protect such interest.

Section 830. Notification Requirements

The causes for extinction of agency, whether arising from the principal or agent, cannot be set up against the other party, until they have been notified to the other party or the latter has knowledge of them.

Section 831. Good Faith Third Parties

The extinction of agency cannot be set up against a third person acting in good faith, unless the third person is ignorant of the fact through his own negligence.

Section 832. Demand for Surrender of Written Authority

On extinction of agency, the principal is entitled to demand the surrender of any written authority given to the agent.

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Chapter 2: Realization of Assets, Payment of Debts and Distribution of an Estate

Section 1734. Payment of Creditors

The creditors of an estate are entitled to be paid only out of the property of an estate.

Section 1735. Disclosure of All Properties and Debts

The heir is bound to disclose to the administrator all the properties and debts of the deceased known to him.

Section 1736. Satisfaction of Creditors and Legatees

So long as all the known creditors of the estate or legatees have not been satisfied by the performance or distribution, the succession is deemed to be under management.

During such period the administrator is entitled as such to do the necessary acts of management such as to enter actions or to submit answers in Court and so on. He shall take all necessary steps to collect the debts due to estate within the shortest possible time. After the creditors of the estate have been satisfied he shall divide the estate.

Section 1737. Summoning Administrator for a Claim

A creditor of the estate may enforce his claim against any heir. However, where there is an administrator of the estate, he must be summoned by the creditor to appear in the action.

Section 1738. Enforcement of Payment of a Claim

Before the division of the estate the creditor of the estate may enforce full payment of his claim from the estate. In such case each heir may, up to the time of division inclusively, require that the performance be made out of the de cujus’ estate or secured there from.

After the division of the estate, any other place this is found other than then this is copied, the creditor may claim performance from any heir up to the extent of the property received by him. In such case an heir who has made performance to the creditor in excess of his proportionate share in the obligation has a right of recourse against other heirs.

Section 1739. Preferential Rights of Claims

Without prejudice to the creditors having special preferential rights under the provisions of this Code or other law and to the creditors secured by pledge or mortgage, the debt due by the estate shall be paid in the following order and in accordance with the provisions of this Code concerning preferential rights:

1. expenses incurred for the common benefit of the estate;
2. expenses incurred for the funeral of the de cujus;
3. taxes and rates due by the estate;
4. wages due by the de cujus to any clerk, servant or workman;
5. supplies of daily necessaries made to the de cujus;
6. remuneration to the administrator.

Section 1740. Appropriated Property for Payment of Debts

Unless otherwise provided by the de cujus or by law, his property shall be appropriated to the payment of debts in the following order:

1. property other than immovable property
2. immovable property expressly appropriated to that purpose by will, if any;
3. immovable property to which the statutory heirs are entitled as such;
4. immovable property bequeathed to a person upon the condition that he shall pay the debts of the de cujus;
5. immovable property bequeathed under general title as provided by Section 1651;
6. any specific property bequeathed under a particular title as provided by Section 1651.

Any property appropriated under the foregoing provisions shall be sold by way of public auction, but any heir may prevent such sale by paying, to the extent required for the satisfaction of the creditors, the value of the whole or part of the property as may be determined by an appraiser appointed by the Court.

Section 1741. Creditor Raising Objections to an Auction or Appraisement

Any creditor of the estate may, at his own expense, raise an objection to the auction or appraisement of the property specified in the foregoing section. If, notwithstanding such objection having been raised by the creditor, an auction or appraisement is effected the auction or appraisement cannot be set up against the creditor who has raised such objection.

Section 1742. Creditor Designated as Beneficiary of Insurance

If, during the lifetime of the deceased, a creditor has been designated as the beneficiary of an insurance on the life in payment of a debt due to him, he is entitled to receive the whole sum agreed with the insurer. He shall have to return to the estate of the deceased the amount of the premiums only if proved by other creditors:

1. That by paying his debt in such manner, the deceased and such creditor have acted in contravention of the provisions of Section 237 of this Code; and
2. That such premiums were out of proportion to the income or station in life of the deceased. In no case shall the amount of premiums to be returned in such manner exceed the sum paid by the insurer.

Section 1743. Execution of Legacies

A statutory heir or a legatee under a general title is not bound to execute legacies under a particular title for more than the amount of property received by him.

Section 1744. Delivery before Death without notice to Creditors

The administrator is not bound to deliver the estate or any part thereof to the heirs before one year has elapsed from the death of the de cujus, unless all the known creditors of the estate and legatees have been satisfied by the performance and distribution.

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Note: English translations of the original Thai law texts are prepared for reference purposes only.
Only the Thai script versions, as published in the royal Thai government gazette (ราชกิจจานุเบกษา), shall have legal force in Thailand.