A Sales Contract is a legally binding agreement between a buyer and a seller that outlines the terms and conditions of a transaction. In Thailand, reviewing a sales contract is a crucial step in any real estate, business, or goods transaction. Whether purchasing a property, vehicle, or business assets, ensuring that the contract is fair, clear, and legally enforceable is essential to avoid future disputes.
A well-drafted contract protects both parties, defining their rights, responsibilities, and obligations. However, without proper review, buyers and sellers risk legal complications, hidden clauses, and unfair terms. This guide covers everything you need to know about Sales Contract Review in Thailand, including key elements, common pitfalls, and best practices.
1. Why Sales Contract Review is Important in Thailand
✔ Legal Protection
- A well-reviewed contract protects buyers and sellers from fraud and misrepresentation.
- Ensures all terms and conditions comply with Thai law.
✔ Avoiding Hidden Risks
- Some contracts contain unfair clauses that favor one party over the other.
- Without proper review, a buyer may be stuck with unfavorable terms.
✔ Preventing Future Disputes
- A clear contract reduces the chances of legal disputes.
- If issues arise, a properly reviewed contract ensures easier enforcement in court.
💡 Tip: Hiring a lawyer or legal expert to review your contract is a smart investment that can save significant money and trouble in the future.
2. Key Elements of a Sales Contract in Thailand
A Sales Contract should include the following essential elements:
2.1 Identification of the Parties
✔ Full legal names of both the buyer and seller.
✔ ID numbers or company registration details (for business transactions).
2.2 Description of the Item Being Sold
✔ Full details of the property, business, or goods being sold.
✔ If it is real estate, the contract should include:
- Title deed number
- Property size and location
- Land Office details
✔ If it is a vehicle, the contract should include: - Registration number
- Make, model, and year
2.3 Purchase Price and Payment Terms
✔ Total agreed price (in Thai Baht or foreign currency).
✔ Breakdown of down payments, deposits, and installment payments (if applicable).
✔ Penalties for late payment or non-payment.
💡 Tip: If you are buying property in Thailand, ensure the payment structure follows Thai laws regarding foreign currency transfers.
2.4 Deposit and Refund Conditions
✔ Specify the amount of deposit required.
✔ Clearly define conditions under which the deposit is refundable or non-refundable.
2.5 Property Transfer and Ownership Rights
✔ When the ownership transfer will take place.
✔ The legal process for transferring title deeds, vehicle registration, or business shares.
✔ Any restrictions on the transfer of ownership.
💡 Tip: For real estate transactions, confirm that the property is free from mortgages, liens, or legal disputes.
2.6 Taxes and Fees
✔ Who will pay the transfer fees, stamp duty, and withholding tax.
✔ Tax responsibilities for both buyer and seller.
💡 Tip: If not clearly stated, the buyer may unexpectedly have to pay extra fees.
2.7 Warranties and Guarantees
✔ Seller’s guarantee that the property, vehicle, or goods are free from defects.
✔ If applicable, include a warranty period and conditions for return or repair.
2.8 Dispute Resolution Clause
✔ Specifies how disputes will be resolved (e.g., mediation, arbitration, or Thai courts).
✔ Defines the jurisdiction (court location) in case of legal action.
2.9 Signatures and Witnesses
✔ Both parties must sign the contract.
✔ Some contracts require witnesses or notarization (e.g., real estate transactions).
3. Common Pitfalls in Thai Sales Contracts
🚨 1. Unclear Payment Terms – Some contracts lack clarity on payment due dates, penalties, or refund conditions.
🚨 2. Hidden Fees – Some sellers add extra costs that buyers are unaware of.
🚨 3. Missing Property Details – Real estate contracts must include the correct title deed number.
🚨 4. Unfair Termination Clauses – Some contracts favor the seller, making it difficult for the buyer to cancel.
🚨 5. Lack of Legal Compliance – Some contracts do not comply with Thai contract law, making them unenforceable.
💡 Tip: Always review every clause carefully to avoid unexpected obligations.
4. How to Review a Sales Contract Effectively
Step 1: Read the Contract in Detail
✔ Go through every section to ensure clarity and fairness.
✔ Check if the terms are realistic and legally sound.
Step 2: Verify Ownership & Legal Status
✔ For property: Verify the title deed and confirm ownership at the Land Office.
✔ For business sales: Confirm the company’s legal status and financial health.
Step 3: Cross-Check Payment and Fee Responsibilities
✔ Confirm who pays transfer fees, taxes, and additional costs.
✔ Make sure there are no unexpected hidden charges.
Step 4: Ensure Proper Dispute Resolution Terms
✔ A fair contract should allow for mediation or arbitration before court action.
Step 5: Consult a Lawyer Before Signing
✔ Thai laws are complex; having a lawyer review the contract can prevent legal troubles.
💡 Tip: If you do not speak Thai, request an official English translation of the contract.
5. Legal Aspects of Sales Contracts in Thailand
- Thai Civil and Commercial Code governs contracts in Thailand.
- Contracts must be in writing for real estate transactions.
- Some contracts require witnesses or notarization.
- If a contract violates Thai law, it may be declared void by the court.
💡 Tip: Make sure your contract is drafted according to Thai contract law to be legally enforceable.
6. Costs Involved in Sales Contract Review
| Service | Estimated Cost (THB) |
|---|---|
| Lawyer’s Contract Review | 5,000 – 50,000 |
| Official English Translation | 2,000 – 10,000 |
| Title Deed Verification | 3,000 – 10,000 |
💡 Tip: The cost of legal review is minor compared to potential losses from a bad contract.
7. Conclusion
Reviewing a sales contract in Thailand is a critical step in any transaction. Without proper review, buyers and sellers risk legal disputes, financial losses, and hidden obligations.
✔ Key Takeaways:
- Always verify ownership details and contract terms.
- Ensure payment and fee responsibilities are clearly defined.
- Dispute resolution clauses should be fair for both parties.
- Consult a lawyer before signing any major contract.
