Services / Civil and commercial litigation
Breach of sale, and the form the law requires
A great many sale disputes begin not with the quality of the goods but with the form of the contract, because the law prescribes a form for certain property and the consequence of ignoring it is that the contract is void, not merely disadvantageous.
The form the law prescribes
The first paragraph of section 456 of the Civil and Commercial Code provides that a sale of immovable property is void unless made in writing and registered with the competent official, and extends that to vessels of five tons or more, houseboats and draught animals. Void means of no effect from the outset, not something the parties can cure afterwards by agreeing to treat it as valid.
An agreement to sell is a different thing
The second paragraph deals with agreements to sell or buy, and options over the property in the first paragraph: without some writing signed by the party to be charged, or earnest money given, or part performance, no action lies. That is why a deposit and a first instalment carry more legal weight than most people realise.
Movables of twenty thousand baht or more
The third paragraph extends the second to contracts for the sale of movables at an agreed price of twenty thousand baht or more. A verbal deal for machinery, a vehicle or a large consignment, with nothing in writing, therefore has an enforcement problem from the start, unless earnest money was given or part of the price was paid.
Short or excess delivery
Section 467 sets a notably short period: on liability for property delivered short or in excess, no action may be brought after one year from delivery. A buyer who finds the delivery incomplete and then negotiates on and on without suing risks running past that date without noticing.
Claiming for goods already delivered
Sellers have their own clock. Section 193/34(1) gives a trader or manufacturer two years to claim the price of goods delivered or work done, unless the work was for the debtor's own business. A seller who lets a customer's balance run on across years should always check the limitation position first.
PREPARE
What to bring
- The contract or purchase order with every attachment
- Delivery notes, receipts and proof of delivery
- Invoices and the record of every payment
- Evidence of any deposit or earnest money
- Notices and the correspondence between the parties
QUESTIONS
Questions this raises
We wrote a land sale between ourselves without going to the land office. Is it valid?
If it was an outright sale, the first paragraph of section 456 makes it void for want of writing and registration. The document may however be read as an agreement to sell, which falls under the second paragraph instead and produces a very different result. The document itself has to be read before anything is concluded.
I only noticed the shortfall more than a year after delivery.
Section 467 bars an action after one year from delivery specifically on liability for short or excess delivery. A dispute about quality, or about breach in some other respect, may fall under a different period. How the claim is characterised matters a great deal here.
LAW
The legislation
- Civil and Commercial Code, sections 456, 467 and 193/34(1)
ENQUIRIES
