Contracts are important tools to protect the interests of businesses and individuals. When a contract is breached it can lead to severe consequences.
Understanding the legal framework, types of breaches and available remedies is crucial to ensuring fairness and accountability in business relationships. Alternative dispute resolution methods such as mediation and arbitration are often faster and less expensive than litigation.
Damages
Although it is not very common, contract disputes do occasionally see the inside of Thai courts. This usually happens after all of the informal methods like a demand letter or an arbitration dispute resolution have failed to resolve the matter.
The Civil and Commercial Code of Thailand sets out a legal framework for enforcing contracts. Remedies available to non-breaching parties include:
Damages – this is a monetary award designed to compensate the non-breaching party for losses incurred as a result of the breach. The type of damages awarded depends on the nature of the breach.
Specific Performance – this involves a court order ordering the breaching party to fulfill their contractual obligations as originally agreed. This remedy is usually granted when monetary damages are not sufficient.
Cancellation/Recission – in certain circumstances the non-breaching party can cancel or rescind the contract, relieving them of their obligation to perform. This is often available when there is a fundamental breach of the contract.
Specific Performance
Specific performance is a legal remedy that obligates the breaching party to fulfill their contractual duties as originally agreed upon. This remedy can result when monetary compensation would not adequately remedy the breach.
The law of Thailand outlines various remedies for breach of contract, including damages and specific performance. However, individuals may also wish to explore alternative dispute resolution methods, such as mediation or arbitration.
Non-Disclosure Agreements (NDA) are legal contracts that protect sensitive information, such as customer lists or proprietary data, from disclosure or use without the disclosing party’s consent. NDAs are generally enforceable in Thailand if they are fair, reasonable, and do not conflict with public policy or good morals.
Disputes over NDAs can arise for a number of reasons, including misunderstandings and ambiguities in the language used. Additionally, NDAs can be subject to different enforcement regimes depending on the jurisdiction and dispute resolution methods stipulated in the contract. Ultimately, it is important for individuals and businesses to understand the legal framework surrounding contracts, breaches, and remedies in order to ensure that their business relationships are protected.
Rescission
Our English speaking business lawyers in Thailand have a great deal of experience dealing with both local and international breach of contract cases. These cases can range from debt collection cases on property leases or loan contracts to disputes between businesses on the supply of goods or services.
Generally, the main remedy for breach of contract is damages, which are monetary awards meant to compensate a party for losses incurred due to the breach. Another option is specific performance, which involves a court order requiring the breaching party to fulfill their contractual obligations.
NDAs, or Non-Disclosure Agreements, are important contracts that help protect sensitive information like customer lists or intellectual property from being shared without consent. Although Thai law doesn’t have explicit legislation on NDAs, courts will typically respect their terms if they are fair and reasonable and don’t conflict with public policy or good morals. However, sometimes a NDA may be broken and rescission is necessary.
Concurrent Liability
In some cases, a breach of contract will also constitute a tort. While most lawyers will try to resolve disputes involving contractual breaches through informal methods such as a demand letter or arbitration, legal action in Thailand courts does occasionally become necessary.
In these situations, concurrent liability can result in both a tort and a breach of contract being brought against a party. As noted in Henderson, however, concurrent contract-tort duty is not an automatic consequence of legal taxonomy: there are principled justifications for so defining the breadth of legal categories that happen to overlap on particular facts. That, in turn, makes it difficult to rely on arguments such as instrumental need for extended limitation periods or the apparent success of other jurisdictions embracing concurrent claims.
