This page is an English summary of our Thai article on the basics of contract law. It brings together the Civil and Commercial Code rules on juristic acts and contracts, together with unfair contract terms legislation and electronic transaction principles.
How a contract is formed
Thai law treats a contract as a two-sided juristic act. The core idea is that one party makes an offer and the other party accepts it. Section 361 of the Civil and Commercial Code is important for parties dealing at a distance, because it states that the contract is formed when the acceptance reaches the offeror. In practice, this means business communications by email, messaging platforms, or other remote channels can create binding obligations even without a paper document.
What makes a contract legally effective
- The parties must have legal capacity to act.
- Their intention must be genuine and voluntary.
- The objective of the contract must be lawful, possible, and not contrary to public order or good morals.
- If the law requires a particular form, such as writing or registration, that form must be satisfied.
Void and voidable acts
The Thai article explains the practical difference between void and voidable acts. A void act is ineffective from the beginning. Common examples include unlawful objectives, failure to comply with a mandatory legal form, sham declarations, or certain mistakes on essential matters. A voidable act is different. It is initially effective, but the party protected by law may later rescind or affirm it. This usually arises in cases involving incapacity, fraud, or duress.
Unfair contract terms
Thailand also controls one-sided boilerplate clauses through the Unfair Contract Terms Act. A clause that imposes an excessive burden or unreasonably advantages one side may be enforced only to the extent that it is fair and reasonable. This is especially relevant for standard-form contracts, online service terms, and supplier or lease documents drafted entirely by one side.
Electronic contracts
The Thai article also notes that electronic contracts are recognized under Thai law. The Electronic Transactions Act prevents legal effect from being denied merely because the information is in electronic form. That said, some transactions still require formal steps beyond ordinary online agreement, especially where registration with an authority remains legally necessary.
Practical takeaway
Many contract disputes begin before a breach occurs. They come from unclear formation, defective legal form, overreaching standard clauses, or mistaken assumptions that a digital agreement is automatically ineffective. Businesses should review both the substance of the bargain and the formal legal requirements before signing.
Primary Thai sources used for this summary
- Civil and Commercial Code sections 149 to 181 and 354 to 394, as discussed in the Thai article.
- The Unfair Contract Terms Act B.E. 2540.
- The Electronic Transactions Act B.E. 2544.