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Important Points of Contract Review in Thailand

Contract Review in Thailand

Entering into purchase agreements is not as simple or safe as it may sound. The seller will present a contract of sale and/or purchase agreement after the buyer makes an initial deposit. It may be written in Thai or in English that both of them understand. But the buyer must scrutinize its details before signing the agreement. If the contract is in Thai and the buyer is a foreigner, it and other related documents must be clearly translated into English. Very likely, it will provide the exact description of the property, the location, the current person or persons with rights to it, the purchase date, and the terms and conditions. A Thai contract lists only the basic documents and the rights of the buyer and is thus not exhaustive, unlike those of other countries. The buyer then should take caution and secure professional assistance in reviewing the details of the contract before he or she signs it.

What a Contract Review Does

It makes sure that the sales negotiation proceeds properly and smoothly. It may add, remove or change applicable or desirable conditions to which both parties agree to be included in the contract. It may include a safety provision in anticipation of probable issues in the future such as tax payments when the property is sold. It may add provisions for completion if the property is not yet completed and for penalties to be imposed on the developer for delays. In case the development of the property is not yet complete, the contract should include a schedule and standard for it as well as development needs.

Ideal Contents of a Contract Review

A careful review of a contract presumes due diligence and sagacious scrutiny. This is to reduce risks to a maximum for either an organization or person. The professional legal practitioner who will review the contract should consider undertaking certain steps in order to achieve this goal. It should negotiate the most desirable terms agreeable to both parties. It should avoid refusal by the seller as far as possible. It should include the identities of all parties and stakeholders, fill out all blanks completely, clearly, and completely list all the rights and responsibilities of everyone involved in anticipation of future liabilities and eventualities. These rights and responsibilities must be thoroughly known and understood. They are often not in one place in the contract.

Provisions for confidentiality should be clear and open to the parties as in limiting or denying access to personal information of either or both or other parties involved in the agreement. The provisions should be lawful. Provisions for remedies must be set forth despite the repulsion for them. The review should extend its reach to the farthest possible adversities of all kinds in order to limit liability, especially when the other or one of the parties is unable or unwilling to provide the remedy.

Allocating for risks determines the way risks will be handled in the future. This is the responsibility of the party who is most capable of preventing loss. Adding or making sure that the insurance being provided is prevention. Special care must be exercised with provisions for seemingly harmless provisions for indemnification. Limit these provisions as far as possible or include a clause where the buyer may claim indemnity for himself or herself. A legal practitioner who is conducting the contract review will be a great help specifically for this detail. The contract should also include causes for terminating it in order to avoid terminating it without any cause or for the convenience or detriment of either party or side.

Resolving disputes should be clearly described and understood. Arbitration and mediation will save everyone time, energy, and money. But experience says there are times when court action is needed. Even then, the contract should adopt flexibility in dealing with disputes. Always read and review incorporated documents and make no assumptions about them. And only the proper signatories should sign the contract or it will not be valid or enforceable.

A legal practitioner conducting the contract review should review other contracts already in existence as reference. Comparisons will enable him to discover what else needs to be in the contract or what changes must be made. The seller’s contract reviewer should do the same. It cannot be overstated that due diligence and efficient handling of the contract will do more than reduce risks. It will also realize large savings, especially for large organizations.

Benefits of Contract Review

Besides the above-mentioned already beneficial functions of a contract review, there are five reasons why experienced legal officers and law firms recommend this action. Top officials may always be in a hurry or have too much on their minds to take notice of details. This makes the contract review by a specialist or legal practitioner indispensable to the business.

Prevention is always easier and cheaper than remedying

A lawyer who is experienced in litigation and managing documents with due diligence will save a lot of cost and trouble by reviewing a contract before it is signed. Failing to do so and resorting to remedies like lawsuits can be very expensive and stressful without solid assurance of winning.

Applying a New Perspective Maybe Advantageous

A seasoned legal practitioner who has done contract review with due diligence is better able to see through a contract in a way that can be more advantageous to the business than the owner is accustomed to. The legal practitioner who has long experience in contract reviews can innovate a new slant without being limited to businessmen’s dogged focus on profit that will work better in achieving it.

Avoiding Mistakes. The lawyer who drafted the business contract can be sued if he makes a mistake, which the business owner cannot do if he conducts the contract review himself.

Lack of Expertise. It is simple and necessary for business owners or buyers to let an expert do the scrutiny of a contract for which the latter was trained. There is no arguing on this need.

Leveling off with the Other Party or Parties

The lawyer of the seller will always draft the contract with the interest of the seller in mind. Only an equally experienced lawyer who reviews the contract can make the deal fair for the other party by careful scrutiny.


When purchasing property or running a business, the person must be as certain as possible about all the details of the contract that he or she will sign. It is a false economy to avoid legal advice or service and a very unwise decision to sign an agreement without being prepared for the worst.


Legal Advisors
Legal Advisors
Siam Legal is an international law firm composed of experienced lawyers, attorneys, and solicitors both in Thailand law and international laws. The law firm offers comprehensive legal services in Thailand to both local and foreign clients for civil & criminal litigation cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug-related cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration and Thailand BOI, family law, property law, and private investigation.

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