We would like to highlight a unique law in Thailand which, under certain circumstances, can become a safeguard in disputes with an unfair seller, landlord, or service provider.
What does the law regulate?
This law protects the rights of the party in a weaker bargaining position due to differences in social status, financial standing, lack of alternatives, or other factors.
If the terms of a contract between a consumer (weaker party) — such as a buyer, tenant, or client — and a business operator (stronger party) — such as a seller, landlord, or service provider — provide unreasonable advantages to the latter, such terms may be deemed unfair.
In such cases, the contract remains enforceable only to the extent that it is fair and reasonable under the circumstances.
What terms are considered unfair?
- If the weaker party bears greater liability than предусмотрено законом, or if the stronger party’s liability is limited or excluded
- If the stronger party has the right to unilaterally terminate the contract without valid grounds
- If the stronger party is allowed not to perform obligations or to violate deadlines
- If the contract allows the stronger party to require obligations from the weaker party that are not предусмотрены договором
How are unfair terms determined?
When assessing contract terms, the court takes into account:
- good faith of the parties
- their bargaining positions
- level of knowledge and understanding of the terms
- availability of alternatives
- other relevant circumstances
Important:
A contract term can only be officially recognized as unfair by a court decision.
We recommend identifying and addressing potential risks before signing the contract, as legal proceedings in Thailand are typically time-consuming and costly.
Author: Alexandra Agapitova.
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