The law grants parties the freedom to agree on various terms in a contract within the limits of legal authority. Regardless of nationality, whether they are legal entities or individuals, they can enter into contracts. Therefore, a contract is a legal act that arises from the mutual intention of two parties with a shared objective, binding themselves according to the contract. When drafting a contract, one must consider the type and purpose of the contract to be made.
In the present time, there is an increasing number of business contracts with parties of different nationalities or countries. Therefore, it is necessary to agree on the terms of dispute resolution and the applicable law for enforcing the contract.
When drafting business/trade contracts under Thai law, specifying a particular court with jurisdiction in case of disputes is void and cannot be done. Broadly defining the jurisdiction of courts not only complies with Thai law but also provides the contracting parties with options for bringing the case to a competent court. Furthermore, if the contract specifies the use of foreign law but the court with jurisdiction is Thai, the party bringing the case before the court has the burden of proving the applicable foreign law to the court. Otherwise, the court will apply Thai law according to the principles of conflict of laws in Thailand.
Another option is settling the dispute by Arbitration. This method is not only faster than court proceedings but also reduces costs for the contracting parties and saves time for both parties.
if it is agreed to resolve disputes through arbitration, the parties must follow it. They cannot immediately bring the case to court. If the other party does not comply with the arbitration’s judgement within three years, the case can be brought to court to enforce the arbitration’s judgement within three years. The documents required to petition the court include:
In most cases, the court will enforce the arbitration’s judgement. The court will only refuse enforcement if there are legal reasons, such as if one of the parties is legally incompetent or unable to make decisions for themselves.