When engaging in sales transactions in Thailand—whether in real estate, goods, services, or business acquisitions—one of the most important legal steps is the sales contract review. A sales contract is a binding agreement between a buyer and a seller that outlines the terms and conditions of a transaction. Reviewing such contracts ensures that the terms are fair, enforceable under Thai law, and protect the interests of all parties involved. In Thailand, different types of sales contracts require different review approaches, depending on the nature of the asset or service being sold. This article explores the major types of sales contract review in Thailand, their purposes, and why they are essential for both local and foreign parties.

1. Real Estate Sales Contract Review

One of the most common types of contract reviews in Thailand involves the sale of real property such as land, condominiums, or commercial buildings. A real estate sales contract review ensures that:

• The seller has legal ownership of the property (verified through a title deed check).
• The property is free from encumbrances (mortgages, liens, or legal disputes).
• The land or property use complies with zoning regulations.
• Payment terms, transfer of title, and responsibilities for taxes and fees are clearly defined.

Buyers, particularly foreigners, should be aware that ownership of land is generally restricted, and leasehold or company ownership structures may be required. Legal review ensures compliance with these rules and that no illegal or unenforceable clauses exist in the contract.

2. Movable Property Sales Contract Review

Sales of movable property—such as vehicles, machinery, or equipment—also require proper documentation. A movable property sales contract review checks:

• Accurate description of the item (model, serial number, condition).
• Proof of ownership and transferability.
• Clear payment terms and delivery obligations.
• Clauses on warranty, liability for damage, and dispute resolution.

This type of review is crucial in both private and commercial transactions. For example, a Thai company purchasing imported industrial equipment must ensure the terms cover installation support, liability for defects, and import duties.

3. Goods and Merchandise Sales Contract Review

This type of review is especially relevant in commercial trade or import-export transactions. A goods sales contract review in Thailand should address:

• Product specifications and quality standards.
• Delivery schedule (Incoterms, shipping responsibility, and risk transfer).
• Payment method (e.g., letter of credit, bank transfer).
• Penalties for delays, defective products, or breach of terms.

Reviewing such contracts helps businesses avoid misunderstandings with suppliers or buyers, especially when dealing with cross-border logistics and international trade regulations.

4. Service Sales Contract Review

A service contract involves the provision of professional or labor services, such as consulting, software development, maintenance, or construction. In Thailand, service contracts are governed by both civil law and specific sector regulations. A service sales contract review includes:

• Scope of services and deliverables.
• Project milestones, deadlines, and performance indicators.
• Fees, payment schedule, and applicable taxes (such as VAT or withholding tax).
• Termination clauses and liability for breach of contract.

Whether engaging a Thai contractor or outsourcing services to a foreign firm, service agreements must be reviewed to ensure clarity, enforceability, and compliance with Thai labor and tax laws.

5. Business or Asset Acquisition Contract Review

In mergers and acquisitions or asset purchases, reviewing the sales agreement for a business or its assets is complex and multifaceted. A comprehensive review includes:

• Asset list (equipment, inventory, IP rights, goodwill).
• Representations and warranties by the seller.
• Liabilities and debts transferred (if any).
• Conditions precedent and post-closing obligations.

Legal experts also ensure that the transaction structure complies with Thailand’s Foreign Business Act and sector-specific regulations. This type of review is vital to protect buyers from hidden liabilities and legal complications post-acquisition.

6. Franchise and Distribution Agreement Review

Although not strictly a "sales" contract in the traditional sense, franchise and distribution agreements involve the sale of goods or brand usage rights. A review ensures:

• Intellectual property rights are clearly transferred or licensed.
• Roles, obligations, and territories of the distributor or franchisee are clearly defined.
• Compliance with the Thai Trade Competition Act and consumer protection laws.
• Provisions for termination, renewal, and dispute settlement are enforceable under Thai law.

In the case of international franchises, Thai translations and adaptation to local law are often necessary.

7. Installment Sale Contract Review

Installment sales (hire purchase agreements) are common in Thailand for real estate, vehicles, and electronics. An installment sales contract review focuses on:

• Accurate terms of installment payments and interest (if applicable).
• Default clauses and repossession rights.
• Ownership transfer conditions (typically after final payment).
• Consumer protection compliance, particularly in consumer goods.

This review protects buyers from hidden fees or unfair terms and ensures that sellers can enforce their rights in the event of buyer default.

8. Custom or Tailored Contract Review

In certain cases, contracts may be custom-drafted to meet unique business needs, such as software licensing, joint development projects, or manufacturing agreements. These contracts may involve hybrid elements—goods, services, IP rights, and royalties. Legal review focuses on:

• Definitions and interpretation of terms.
• Risk allocation and indemnification clauses.
• Force majeure and dispute resolution mechanisms.
• Applicable law and jurisdiction clauses (especially for cross-border contracts).

Such reviews often require a multidisciplinary approach involving legal, financial, and technical professionals.

Conclusion

A thorough review of a sales contract in Thailand is critical to ensuring legality, fairness, and enforceability. The type of review required depends largely on the nature of the transaction—real estate, goods, services, or business assets. Whether you are a local entrepreneur or a foreign investor, engaging qualified Thai legal counsel to conduct a proper contract review can safeguard your interests, avoid costly disputes, and help ensure a smooth transaction.