Contracts are a vital part of doing business in Thailand. Whether it’s a property transaction, a joint venture agreement, a service engagement, or an employment deal, the legal framework surrounding a contract can have long-term implications. Contract review is a legal process that examines the terms and conditions of a contract before it is signed, ensuring that the agreement is legally sound, fair, and aligned with the parties’ intentions.
In Thailand, contract review services are widely used by individuals, businesses, and foreign investors to avoid legal pitfalls and ensure compliance with local laws. Different types of contracts require different review strategies, depending on the complexity, legal implications, and subject matter. Below is an overview of the key types of contract review in Thailand, along with why each one matters.
1. Real Estate Contract Review
Real estate transactions in Thailand involve significant legal and financial commitments. Whether purchasing land, condominiums, or commercial property, a detailed review of the sales contract is essential.
Key elements reviewed include:
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Verification of land title deed and seller’s ownership rights
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Payment terms, deposits, and penalties
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Clauses regarding transfer of ownership at the Land Office
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Tax and fee responsibilities
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Zoning laws and building permits
For foreigners, specific legal restrictions apply to land ownership. Lawyers can suggest legal alternatives such as leasehold agreements or setting up a Thai company (with caution). A bilingual (Thai-English) review is also crucial to avoid translation discrepancies.
2. Business Sale and Share Purchase Agreements
When buying or selling a business in Thailand, contracts related to share transfers or asset sales must be carefully reviewed to prevent future disputes or liabilities.
Key areas of review include:
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Valuation and payment structure
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Shareholder rights and obligations
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Representations and warranties about company assets, debts, and licenses
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Conditions for closing and post-sale obligations
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Non-compete and confidentiality clauses
A business contract review ensures proper transfer of control, protection against hidden debts, and compliance with Thai company law.
3. Joint Venture and Partnership Agreements
Joint ventures are common in Thailand, especially when foreign companies team up with Thai partners to enter the local market. These agreements require in-depth review to ensure fair terms and clear division of roles.
What lawyers focus on:
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Capital contribution and ownership structure
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Profit and loss sharing
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Management and voting rights
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Dispute resolution mechanisms
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Exit and termination clauses
A properly reviewed joint venture agreement can protect foreign investors from unfair practices, especially in cases where Thai law limits foreign ownership.
4. Employment Contract Review
Employment contracts are essential for defining the relationship between employer and employee. In Thailand, labor laws are quite protective of employee rights, so contracts must comply with the Thai Labor Protection Act.
Contract review addresses:
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Working hours and wages
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Benefits, holidays, and bonuses
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Probation period and termination conditions
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Confidentiality and non-compete clauses
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Dispute resolution processes
For foreign employers hiring Thai nationals or expatriates, a legal review ensures the contract is not only fair but also compliant with Thai labor laws, avoiding potential labor disputes.
5. Franchise and Licensing Agreements
Franchising is a popular business model in Thailand, especially in food, retail, and service industries. Franchise contracts can be complex and are usually drafted by the franchisor, which may leave little room for negotiation.
Legal review includes:
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Fee structure and royalty payments
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Brand usage rights and restrictions
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Franchise territory and exclusivity
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Termination and renewal conditions
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Intellectual property protection
A contract review helps franchisees understand their rights and obligations and prevents excessive restrictions or hidden liabilities.
6. Construction and Service Contracts
Construction projects and large service agreements require detailed contracts that cover all technical, financial, and legal aspects. These agreements often involve multiple parties and substantial risks.
Key points in the review:
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Project scope, deliverables, and deadlines
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Payment milestones and penalties
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Force majeure clauses
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Quality control and inspection terms
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Termination rights and liability clauses
Legal professionals help ensure the contract balances responsibilities fairly between the client, contractor, and subcontractors.
7. Lease Agreements (Residential and Commercial)
Lease agreements in Thailand must be in writing and registered (if exceeding 3 years) to be enforceable. Contract review is vital to protect both landlords and tenants, especially in high-value leases.
Review aspects include:
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Lease term and renewal conditions
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Rent structure and increases
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Maintenance obligations
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Subletting rights and restrictions
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Security deposit and refund terms
For foreigners, leases are often the only legal way to occupy land or buildings, making the review even more essential.
8. Supplier and Distribution Agreements
For companies engaging in manufacturing, import/export, or wholesale activities, supplier and distribution agreements govern how goods and services are exchanged.
A contract review covers:
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Delivery obligations and logistics
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Pricing terms and adjustments
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Minimum order quantities
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Exclusivity or territory arrangements
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Termination and breach conditions
Proper review ensures both sides meet performance expectations and prevents supply chain disruptions.
9. Memorandum of Understanding (MOU) and Letters of Intent
MOUs and LOIs are often signed before entering into a formal agreement. While not always binding, they can set the tone for the relationship and create legal implications.
A legal review checks for:
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Clarity on whether terms are binding
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Confidentiality clauses
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Good faith obligations
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Non-binding disclaimers
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Timeline for entering the final contract
Reviewing an MOU helps avoid misunderstandings and ensures it aligns with your future goals.
Importance of Contract Review for Foreigners
Foreigners doing business or entering into agreements in Thailand must be particularly cautious. Most contracts are drafted in Thai, and even bilingual contracts are legally interpreted based on the Thai version. A thorough review by a qualified Thai lawyer:
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Ensures enforceability under Thai law
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Clarifies foreign ownership or visa-related clauses
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Prevents contractual obligations that conflict with local regulations
Whether you’re buying a property, starting a business, or forming a partnership, contract review is essential for informed decision-making.
Conclusion
Contracts are the foundation of every legal relationship in Thailand, and having them properly reviewed protects your rights, avoids disputes, and ensures compliance with local laws. The types of contract review in Thailand span across real estate, employment, business, franchising, and more—each with its own complexities and legal nuances. For both Thais and foreigners, investing in professional contract review services offers peace of mind and a strong foundation for success in the Thai legal environment.