Book II Thailand Civil and Commercial Code: (contract law) Obligations: under Thai law the requirement to do what is imposed by law, promise, or contract; a duty or the generic term for any type of legal duty or liability.
BOOK II
OBLIGATIONS
TITLE
GENERAL PROVISIONS
CHAPTER I
SUBJECT OF OBLIGATIONS
Section 194. by virtue of an obligation the creditor is entitled to claim performance from the debtor. The performance may consist in a forbearance.
Section 195. When the thing which forms the subject of an obligation is described only in kind, if its quality cannot be determined by the nature of the juristic act or the intention of the parties, the debtor must deliver a thing of medium quality.
If the debtor has done every thing required on his part for the delivery of such thing, or if he on obtaining the consent of the creditor has designated a thing for delivery, such thing becomes from that time the subject of the obligation.
Section 196. If a money debt is expressed in a foreign currency, payment may be made in Thai currency.
The commutation is made according to the rate of exchange current in the place of payment at the time of payment.
Section 197. If a money debt is payable in a specific kind of money which is no longer current at the time of payment, the payment shall be as if the kind of money were not specified.
Section 198. If several acts of performance are due in such manner that only one of them is to be done, the right to elect belongs to the debtor unless otherwise stipulated.
Section 199. The election is made by a declaration of intention to the other party. The performance elected is deemed to be the only one due from the beginning.
Section 200. If the election is to be made within a period of time, and the party who has the right of election does not exercise it within such period, the right of election passes to the other party.
If no period of time was fixed, when the obligation becomes due, the party who has not the right of election can notify the other party to exercise his right of election within a reasonable time to be fixed in such notice.
Section 201. If a third person is to make the election, it is done by a declaration of intention made to the debtor, who must inform the creditor.
If such third person cannot make the election or is unwilling to do so, the right of election passes to the debtor.
Section 202. If one of the acts of performance is impossible from the beginning, or if it subsequently becomes impossible, the obligation is limited to the other act of performance. This limitation does not arise if the performance becomes impossible in consequence of a circumstance for which the party not entitled to elect is responsible.
CHAPTER II
EFFECT OF OBLIGATIONS
PART I
Non-Performance
Section 203. If a time for performance is neither fixed nor to be inferred from the circumstances, the creditor may demand the performance forthwith, and the debtor may perform his part forthwith.
If a time is fixed, it is to be presumed, in case of doubt, that the creditor may not demand the performance before that time; the debtor, however, may perform earlier.
Section 204. If the debtor does not perform after warning given by the creditor after maturity, he is in default through the warning.
If a time by calendar is fixed for the performance, the debtor is in default without warning if he does not perform at the fixed time. The same rule applies if a notice is required to precede the performance, and the time is fixed in such manner that it may be reckoned by the calendar from the time of notice.
Section 205. The debtor is not in default so long as the performance is not effected in consequence of a circumstance of a circumstance for which he is not responsible.
Section 206. In obligations arising from an unlawful act, the debtor is in default from the time when he committed it.
Section 207. a creditor is in default if, without legal ground, he does not accept the performance tendered to him.
Section 208. The performance must be actually tendered to the creditor in the manner which it is to be effected.
But if the creditor has declared to the debtor that he will not accept performance, or if for effecting the performance an act of the creditor is necessary, it is sufficient for the debtor to give him notice that all preparations for performance have been made and that it is for him to accept it. In such cases the notice by the debtor is equivalent to a tender.
Section 209. If a time certain is fixed for the act to be done by the creditor, tender is required only if the creditor does the act in due time.
Section 210. If the debtor is bound to perform his part only upon counter performance by the creditor, the creditor is in default if, though prepared to accept the performance tendered, he does not offer the required counter-performance.
Section 211. A creditor is not in default if the debtor is not in a position to effect the performance at the time of tender, or, in the case provided by Section 209, at the time fixed for the act of the creditor.
Section 212. If the time of performance is not fixed, or if the debtor is entitled to perform before the fixed time, the creditor is not in default by reason of the fact that he is temporarily prevented from accepting the tendered performance, unless the debtor has given him notice of this intended performance a reasonable time beforehand.
Section 213. If a debtor fails to perform his obligation, the creditor may make a demand to the Court for compulsory performance, except where the nature of the obligation does not permit it.
When the nature of an obligation does not permit of compulsory performance, if the subject of the obligation is the doing of an act, the creditor may apply to the court to have it done by a third person at the debtor's expense; but if the subject of the obligation is doing of a juristic act, a judgment may be substituted for a declaration of intention by the debtor.
As to an obligation whose subject is the performance from an act, the creditor may demand the removal of what has been done at the expense of the debtor and have proper measures adopted for the future.
The provisions of the foregoing paragraphs do not affect the right to claim damages.
Section 214. Subject to the provisions of Section 733, the creditor is entitled to have his obligation performed out of the whole of the property of his debtor including any money and other property due to the debtor by third person.
Section 215. When the debtor does not perform the obligation in accordance with the true intent and purpose of the same, the creditor may claim compensation for any damages caused thereby.
Section 216. If by a reason of default, the performance becomes useless to the creditor, he may refuse to accept it and claim compensation for non-performance.
Section 217. A debtor is responsible for all negligence during his default. He is also responsible for impossibility of performance arising accidentally during the default, unless the injury would have arises even if he had performed in due time.
Section 218. When the performance becomes impossible in consequence of a circumstance for which the debtor is responsible, the debtor shall compensate the creditor for any damage arising from the non-performance.
In case of partial impossibility the creditor may, by declining the still possible part of the performance, demand compensation for non-performance of the entire obligation, if the still possible part of performance is useless to him.
Section 219. The debtor is relieved from his obligation to perform if the performance becomes impossible in consequence of a circumstance, for which he is not responsible, occurring after the creation of the obligation.
If the debtor, after the creation of the obligation, becomes unable to perform, it is equivalent to a circumstance rendering the performance impossible.
Section 220. A debtor is responsible for the fault of his agent, and of person whom he employs in performing his obligation, to the same extent as for his own fault. In such case the provisions of Section 373 have no application.
Section 221. A money debt bearing interest ceases to bear interest during the default of the creditor.
Section 222. The claim of damages is for compensation for all such damage as usually arises from non performance.
The creditor may demand compensation even for such damage as has arisen from special circumstances, if the party concerned foresaw or ought to have foreseen such circumstances.
Section 223. If any fault of the injured party has continued in causing the injury, the obligation to compensate the injured party and the extent of the compensation to be made depends upon the circumstances, especially upon how far the injury has been caused chiefly by the one or the other party.
This applies also even if the fault of the injured party consisted only in an omission to call the attention of the debtor to the danger of an unusually serious injury which the debtor neither knew not ought to have known, or in an omission to avert or mitigate the injury. The provisions of Section 220 apply mutatis mtandis.
Section 224. A money dent bears interest during default seven and half percent per annum. If the creditor can demand higher interest on any other legitimate ground, this shall continue to be paid.
Interest for default shall not be paid upon interest.
Proof of further damage is admissible.
Section 225. If the debtor is bound to make compensation for the value of an object which has perished during the default, or which cannot be delivered for a reason which has arisen during the default, the creditor may demand interest on the amount to be paid as compensation, from the time which serves as the basis for the estimate of the value. The same rule applies if the debtor is bound to make compensation for the diminution in value of an object which has deteriorated during the default.
PART II
Subrogation
Section 226. A person is subrogated to the rights of a creditor is entitled to exercise in his own name all the rights which the creditor had in respect of the obligation including any security for it.
By real subrogation, a property is substituted for another property in the same juristic position as the previous one.
Section 227. When a creditor has received as compensation for damage the full value of the thing or right which is the subject of the obligation, the debtor is, by operation of law, subrogated into the position of the creditor with regard to such thing or right.
Section 228. If, in consequence of the circumstance which makes the performance impossible, the debtor acquires a substitute or a claim for compensation for the object owed, the creditor may demand delivery of the substitute received or may claim for compensation by himself.
If the creditor has a claim for compensation on account of non-performance, the compensation to be made to him is diminished, if he exercises the right specified in the foregoing paragraph, by the value of the substitute received or of the claim for compensation.
Section 229. Subrogation takes place by operation of law and ensues to the benefit of the following persons:
- The person who, being himself a creditor, pays another creditor who has priority to him owing to such other creditor having a preferential right, pledge or mortgage.
- When acquires an immovable property, the person who uses the purchase price in paying off the persons who have mortgages thereon.
- The person who, being bound with other or for others to pay a debt and was interested in paying the same, has paid it.
Section 230. If the creditor levies compulsory execution upon an object belonging to the debtor, any person who through the execution incurs danger of losing a right in the object is entitled to satisfying the creditor. The same right belongs to the possessor of a thing if he incurs danger of losing possession through the execution.
If a third person satisfies the creditor he is subrogated of the claim of the latter. Such claim may not be enforced to the detriment of the creditor.
Section 231. If properties mortgaged, pledged or otherwise subject to a preferential right, are insured, the mortgage, pledge or other preferential right extends to the claim against the insurer.
In case of immovable property, the insurer shall not pay the indemnity to the assured until he has given notice of his intention to do so to the mortgagee or other preferred creditor, and has not within one month from such notice received any objection to the payment, provided always that the insurer knew or ought to have known of the mortgage or other preferential right; however, any right registered in the Land Registry is deemed to be known to the insurer.
The same rule shall apply to mortgage of movables allowed by law. In case of movable property, the insurer may pay the indemnity to the assured directly, unless he knew or ought to have known of the pledge or other preferential right.
The insurer is not liable to the creditor if the insured property is restored or a substitute for it is provided.
The same rule shall be applied mutatis mutandis in case of expropriation as well as in case of indemnity due to the owner of the property for destruction or damage.
Section 232. If under the foregoing section a sum of money is being substituted for the property destroyed or damaged, such sum shall in no case be delivered to the mortgage, pledge or other preferred creditor before the obligation secured is due,and if the parties cannot come to an agreement with the debtor, each of them is entitled to demand that the said sum be deposited at the Deposit Office their common benefit unless the debtor gives proper security.
PART III
Exercising Debtor’s Claims
Section 233. If, to the prejudice of the creditor, the debtor refuses or neglects to exercise a claim the creditor may, in order to protect his obligation, exercise such claim in his own name of behalf of the debtor, except those which are purely personal to the debtor.
Section 234. The creditor who exercises a claim belonging to his debtor must summon the debtor to appear in the action.
Section 235. A creditor may exercise a claim belonging to the debtor for the whole amount due to the debtor, without regard to the amount due to him. But the defendant may satisfy the creditor by paying the amount due to him alone, provided that if the original debtor has joined as a plaintiff he may proceed to judgment for the balance.
In any case the creditor cannot obtain more than what is due to him.
Section 236. The defendant may set up against the creditor all defenses which he may have against the debtor, excepting those which arose after the entry of the action.
PART IV
Cancellation of fraudulent acts
Section 237. The creditor is entitled to claim cancellation by the Court of any juristic act done by the debtor with knowledge that it would prejudice his creditor; but this does not apply if the person enriched by such act did not know, at the time of the act, or the facts which could make it prejudicial to the creditor, provided, however, that in case of gratuitous act the knowledge on the part of the debtor alone is sufficient.
The provisions of the foregoing paragraph do not apply to a juristic act whose subject is not a property right.
Section 238. The cancellation under the foregoing section cannot affect the right of a third person acquired in good faith.
The foregoing paragraph does not apply if the right is acquired gratuitously.
Section 239. Cancellation operates in favour of all the creditors.
Section 240. A claim for cancellation cannot be brought later than one year from the time when the creditor knew of the cause of cancellation, or later than ten years since the act was done.
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