Thailand Breach of Contract and Collection Issues

Breach of Contract

Thailand is a hub of international trade and business. As a result, disputes regarding payment obligations often occur. Disputes can arise as a result of financial irresponsibility or willful misconduct. Breach of contract cases occur when a party to an agreement (a debtor) fails to perform on this part of a contract. We are often requested to collect debts based on international and local breach of contract disputes. These disputes can be caused when a supplier fails to send contracted goods, or when a Purchaser fails to pay.  Other types of breach of contract cases include service and labor agreements, loan agreements and leases and real estate agreements.

Complaint in Thailand Courts

Thailand courts provide for a number of actions against parties that fail to perform. In practice, most attorneys will attempt to recover the debt through informal methods. In other words, most lawyers will first send a ‘demand letter’ to a debtor requesting voluntary payment. However, Court action is often necessary. Thailand Courts also provide methods to seize and action assets of debtor after a Court judgment is obtained and in the event that payment is not made on the judgment. Interest and costs are also recoverable through the Thailand Court.

Demand Letter or Notice

Prior to filing a  court complaint, most attorneys will send a demand letter (termed “notice” in Thailand) to the Debtor and request compliance or payment within s specified period of time.  If a settlement plan can be reached, or payment can be made by the Debtor, a court action may not be necessary.