Sales contracts in Thailand play a crucial role in governing transactions between parties, especially in real estate, commercial, and cross-border deals. These contracts legally bind the buyer and the seller to agreed-upon terms and conditions, making it vital to ensure that all provisions are fair, enforceable, and compliant with Thai laws. To mitigate legal risks and protect the interests of both parties, conducting a comprehensive contract review is essential. In Thailand, various types of sales contract reviews cater to different types of transactions and client needs. Below is a breakdown of the common types of sales contract review and their importance in the Thai legal and business context.
1. Standard Contract Review
This is the most common type of contract review used in routine sales transactions such as property sales, business asset transfers, or commercial sales agreements. It focuses on ensuring that the contract complies with Thai law and clearly defines key terms such as price, payment terms, product description, delivery, and dispute resolution mechanisms.
A standard review checks for:
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Completeness of contract clauses
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Clarity and enforceability
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Compliance with the Thai Civil and Commercial Code
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Validity of signatures and legal capacity of the parties
This review is ideal for individuals or businesses entering typical purchase agreements and seeking legal assurance that the terms are fair and legally sound.
2. Due Diligence Contract Review
A due diligence review goes beyond the content of the sales contract to examine related documents and the background of the transaction. This is especially critical in property and company acquisitions in Thailand.
Key aspects include:
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Verification of the seller’s ownership or legal rights
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Checking encumbrances or liens on property or assets
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Reviewing title deeds and company registration documents
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Validating zoning and land use restrictions (in real estate)
Due diligence reviews are essential when the buyer is unfamiliar with Thai law or purchasing high-value assets, and they help avoid fraud or future disputes.
3. Cross-Border Contract Review
For international transactions where at least one party is foreign, a cross-border contract review ensures that the agreement meets the legal requirements of Thai law while aligning with international standards and applicable foreign laws.
This review addresses:
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Currency regulations and exchange controls
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Language translation accuracy (Thai-English contracts)
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Dispute resolution across jurisdictions
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Enforcement of foreign judgments or arbitral awards
These reviews are often required in import-export deals, multinational joint ventures, and foreign investments in Thailand. They reduce legal uncertainty when different legal systems are involved.
4. Real Estate Sales Contract Review
In Thailand, real estate transactions are highly regulated and often complex, particularly when foreigners are involved. A real estate sales contract review focuses on land laws, ownership limitations, and transfer procedures.
It includes:
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Verification of land title deed and land office records
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Assessment of land zoning, environmental, or building restrictions
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Review of payment terms, taxes, and transfer fees
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Lease agreements or usufruct clauses (especially for foreign buyers)
Such a review ensures legal compliance and prevents costly errors in buying land, houses, or condominiums.
5. Commercial Sales Agreement Review
This review is applied to business-to-business (B2B) sales, such as contracts for the sale of goods, machinery, software, or bulk inventory. These agreements often include technical terms, warranties, and performance benchmarks.
Areas covered include:
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Delivery terms (Incoterms, timelines)
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Liability and indemnity clauses
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Warranty and service terms
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Cancellation and termination rights
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Penalties for breach or non-performance
Commercial reviews help businesses avoid loopholes and ensure that supplier or buyer obligations are enforceable in Thailand.
6. Customized Contract Review
Not all contracts fit neatly into standard categories. Some transactions involve specialized agreements, such as intellectual property in Thailand sales, franchise sales, or digital asset transfers. A customized review is tailored to the nature of the asset or deal.
Typical features:
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Review of intellectual property rights transfers
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Inclusion of confidentiality or non-compete clauses
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Adherence to industry-specific regulations
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Compliance with BOI (Board of Investment) conditions, if applicable
This type of review is ideal for startup founders, tech entrepreneurs, or companies dealing in intangible assets or government-regulated sectors.
7. Litigation Risk Review
This type of review is conducted with a focus on potential future disputes. Lawyers assess the contract for ambiguous language or clauses that may be interpreted differently by courts. It’s often requested when a transaction involves a high risk of non-performance or disagreement.
Focus areas:
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Jurisdiction and governing law clauses
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Dispute resolution mechanisms (arbitration or litigation)
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Evidence requirements for enforcement
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Precedents and case law interpretation in Thailand
Litigation risk reviews help parties prepare in advance for potential legal challenges and include terms that strengthen their position in court.
8. Foreign Ownership Compliance Review
This review is particularly important for foreign nationals or companies purchasing property, shares, or assets in Thailand. Thai law imposes restrictions on foreign ownership, especially in land and certain businesses.
Key compliance checks include:
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Foreign Business Act compliance
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Land ownership limitations for foreigners
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Use of Thai nominee structures (and legality)
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Condominium quota rules
Such reviews protect foreign investors from violating Thai law and help structure the transaction legally through alternatives like leases or BOI-promoted businesses.
Conclusion
In Thailand, the type of sales contract review needed depends on the complexity, nature, and parties involved in the transaction. Whether you’re a Thai national, a foreign investor, or a business owner, having a tailored legal review helps mitigate risks, ensure compliance, and promote successful deal execution. Working with a qualified Thai lawyer who understands both the legal framework and business culture is essential in ensuring your interests are protected and your transaction is legally enforceable.
A well-reviewed contract is not just a formality—it’s your first and best defense against future disputes, misunderstandings, or legal setbacks. Choosing the right type of sales contract review can be the difference between a smooth transaction and costly litigation down the road.
