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The Thailand Civil and Commercial Code

Civil and Commercial Code

(ประมวลกฎหมายแพ่งและพาณิชย์)

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Sections
General Provisions Sections 1 - 14
Persons (natural) Sections 15 - 36
Domicile and disappearance Sections 37 - 64
Juristic Persons Sections 65 - 79
Associations Sections 78 - 109
Foundations Sections 110 - 136
Things Sections 137 - 148
Juristic Acts (declaration/ void/ voidable/ conditions) Sections 149 - 193
Periods of Time Sections 193 - 193
Prescription Sections 193 - 193
Obligations (subject and effect of obligations) Sections 194 - 226
Subrogation Sections 226 - 240
Right of Retention Sections 241 - 250
Preferential Rights Sections 251 - 289
Plurality of debtors and creditors (and transfer of claims) Sections 290 - 313
Extinction of Obligations Sections 314 - 340
Set-off Sections 341 - 348
Novation Sections 349 - 354
Contract (formation, effect, penalty, rescission) Sections 355 - 394
Management of Affairs (without mandate) Sections 395 - 405
Undue Enrichment Sections 406 - 419
Wrongful Acts Sections 420 - 452
Sale (specific contracts - transfer/ liabilities/ redemption/ exchange/ auction) Sections 453 - 520
Gift Sections 521 - 536
Hire of Property (general/ duties/ liabilities/ extinction) Sections 537 - 574
Hire of Service Sections 575 - 586
Hire of Work Sections 587 - 607
Loan Sections 640 - 656
Mortgage Sections 702 - 746
Pledge Sections747 - 769
Agency Sections 797 - 844
Brokerage Sections 845 - 849
Compromise Sections 850 - 852
Gambling and Betting Sections 853 - 855
Partnerships and Companies (general provisions) Sections 1012 - 1024
Ordinary Partnerships (dissolution, registration) Sections 1025 - 1076
Limited Partnerships Sections 1077 - 1095
Limited Companies (nature and formation/ shares/ meetings/ directors, etc.) Sections 1096 - 1195
Balance sheet (dividend/ books/ dissolution/ removal Sections 1196 - 1297
Property (general provisions) Sections 1298 - 1307
Ownership (acquisition/ extent and exercise/ co-owner) Sections 1308 - 1366
Possession Sections 1367 - 1386
Servitudes Sections 1387 - 1401
Habitation Sections 1402 - 1409
Superficies Sections 1410 - 1416
Usufruct Sections 1417 - 1428
Charge on immovable property Sections 1429 - 1434
Marriage (conditions) Sections 1435 - 1500
Property of husband and wife Sections 1465 - 1493
Void and termination of marriage Sections 1494 - 1535
Termination of Marriage Sections 1501 - 1535
Parent and Child Sections 1536 - 1585
Guardianship Sections 1585 - 1598
Adoption Sections 1598 - 1598
Succession (heirship, disinheritance) Sections 1599 - 1619
Statutory right of inheritance (division, classes, spouses) Sections 1620 - 1645
Wills (general/ forms/ revocation/ nullity) Sections 1646 - 1710
Administration of an estate Sections 1711 - 1744
Partition of an estate Sections 1745 - 1755

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Garuda Symbol: Civil and Commercial Code

PRELIMINARY

Section 1 . This law shall be called the Civil and Commercial Code (ประมวลกฎหมายแพ่งและพาณิชย์).

Section 2. It shall come into force on the 1 st date of January B.E. 2468.

Section 3. On and from the day of operation of this Code, all other laws, bye laws and regulations in so far as they deal with matters governed by this Code or are inconsistent with its provisions shall be repealed.

BOOK I

GENERAL PRINCIPLES

TITLE I

GENERAL PROVISIONS

Section 4. The law must be applied in all cases which comes within the letter and spirit of any of its provisions.

Where no provision is applicable, the case shall be decided by analogy to the provision most nearly applicable, and, in default of such provision, by the general principles of law.

Section 5. Every person must, in the exercise of his rights and in the performance of his obligations, act in good faith.

Section 6. Every person is presumed to be acting in good faith.

Section 7. Whenever interest is to be paid, and the rate is not fixed by a juristic act or by an express provision in the law, it shall be seven and a half per cent per year.

Section 8. "Force majeure" denotes any event the happening or pernicious result of which could not be prevented even though a person against whom it happened or threatened to happen were to take such appropriate care as might be expected from him in his situation and in such condition.

Section 9. Whenever a writing is required by law, it is not necessary that it be written by the person from whom it is required, but it must bear his signature.

A finger print, cross, seal or other such mark affixed to a document is equivalent to a signature if it is certified by the signature of two witnesses.

The provisions of paragraph two shall not apply to a finger print, cross, seal or other such mark affixed to a document before the competent authorities.

Section 10. When a clause in a document can be interpreted in two senses, that sense is to be preferred which gives some effect rather than that which would give no effect.

Section 11. In case of doubt, the interpretation shall be in favour of the party who incurs the obligation.

Section 12. Whenever a sum or quantity is expresses in letters and in figures, and the two expressions do not agree, and the real intention cannot be ascertained, the expressin in letters shall be held good.

Section 13. Whenever a sum or quantity is expressed several times in letters or several times in figures, and the several expressions do not agree, and the real intention cannot be ascertained, the lowest expression shall be held good.

Section 14. Whenever a document is executed in two versions, one in the Thai language , the other in another language, and there are discrepancies between the two versions, and it cannot be ascertained which version was intended to govern, the document executed in the Thai language shall govern.

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TITLE II

PERSONS

CHAPTER I

NATURAL PERSONS

PART I

Personality

Section 15. Personality begins with the full completion of birth as a living child and ends with death.

A child en ventre sa mere is capable of rights provided that it is thereafter born alive.

Section 16. In calculating the age of a person, the birth day shall be counted. If only the month of birth is known, the first day of such month shall be counted as the birthday but if it is not possible to ascertain the date of birth of a person, his age is calculated from the first day of the official year during which such birth took place.

Section 17. When several persons have perished in a common peril, and it is not possible to determine which of them perished first, they will be presumed to have died simultaneously.

Section 18. If the right to use of a name by a person entitled to it is disputed by another, or if the interest of the person entitled is injured by the fact that another uses the same name without authority, then the person entitled may demand from the other abatement of the injury. If a continuance of the injury is to be apprehended, he may apply for an injunction. 

PART II

CAPACITY

Section 19. A person, on completion of twenty years of age ceases to be a minor and becomes sui juris.

Section 20. A minor becomes sui juris upon marriage, provided that the marriage is made in accordance with the provisions of Section 1448.

Section 21. For the doing of a juristic act, a minor must obtain the consent of his legal representative. All acts done by him without such consent are voidable unless otherwise provided.

Section 22. A minor can do all acts by which he merely acquires a right or is freed from a duty.

Section 23. A minor can do all acts which are strictly personal.

Section 24. A minor can do all acts which are suitable to his condition in life, and actually required for his reasonable needs.

Section 25. A minor, after completing fifteen years of age, can make a will.

Section 26. When the legal representative permits a minor to dispose of property for a purpose specified by him, the minor may, within the limits of such purpose, dispose of it at his pleasure. He may do the same as to property which he has been permitted to dispose of without any purpose being specified.

Section 27.The legal representative may permit a minor to carry on a commercial business or other business, or to enter into a hire of services contract as an employee. In case of refusal by the former without reasonable ground, the minor may apply in the Court for granting permission.

The minor shall, in relation to the carrying on of business or the hire of services under paragraph one, have the same capacity as a person sui juris.

If the carrying on of a business of service so permitted under paragraph one causes a serious damage or injury to a minor, the legal representative may terminate the permission granted to the minor or may, in case of having been granted by the Court, apply to the Court for revocation of the permission granted. therefore

If the permission is unreasonably terminated by the legal representative, the minor may apply to the Court for revoking the termination of permission of the legal representative.

The termination of permission may by the legal representative or the revocation of permission by the Court would make the minor's capacity of a person sui juris cease to exist, but does not affect any acts done by the minor before the termination or revocation of the permission.

Section 28. A person of unsound mind may be adjudged incompetent by the Court on the application of any spouse, ascendants, descendants, guardian or curator, a person taking care of the person or the Public Prosecutor.

The person adjudged incompetent under paragraph one must be placed under guardianship. The appointment of guardian, power and duties of guardian, and termination of guardianship shall be in accordance with provisions of Book V of this Code.

The order of the Court under this Section shall be published in the Government Gazette.

Section 29. An act done by a person adjudged incompetent is voidable.

Section 30. An act done by a person of unsound mind but not adjudged incompetent is voidable only when the act was done at a time he was actually of unsound mind, and the other party had knowledge of such unsoundness.

Section 31. If the cause of the incompetence ceases to exist, the Court shall, on the application of the person himself or of any of the persons mentioned in Section 28, revoke the adjudication.

The order of the Court revoking the adjudication under the Section shall be published in the Government Gazette.

Section 32. A person who has physical or mental infirmity, habitual prodigality or habitual intoxication or other similar causes that make him incapable of managing his own affairs, or whose management is likely to cause detriment to his own property or family, may be adjudged as quasi incompetent by the Court upon application by any of the persons specified in Section 28.

The person adjudged quasi-incompetent under paragraph one must be placed under curatorship.

The appointment of curator shall be in accordance with the provisions of Book V of the Code.

The order of the Court under the Section shall be published in the Government Gazette.

Section 33. If it is found by the Court in trial of the case for a person to be adjudged incompetent on account of unsound mind that he is not a person of unsound mind but has mental infirmity, he may, if is deemed suitable by the Court or upon the application of the party or the persons specified in Section 28, be adjudged as quasi-incompetent. The same shall apply if it is found by the Court in trial of the case for a person to be adjudged quasi-incompetent on account of mental infirmity that he is a person of unsound mind, he may, if it is deemed suitable by the Court or upon the application of the party or the person specified in Section 28, be adjudged as incompetent.

Section 34. A quasi incompetent person must obtain the consent of his curator for doing the following acts:

(1) Investing his property.
(2) Accepting the return of the invested property, principal or other capital.
(3) Contracting a loan or lending money, borrowing or leasing value movable.
(4) Giving security by any means whatever that effects him to make a forced payment.
(5)
Hiring or letting property longer than six months if the property is movable or three years if the property is immovable.
(6)
Making a gift, except the gift made suitable for situation in his life, for philanthropy, social or moral obligations.
(7) Accepting a gift encumbered with a charge or refusing a gift.
(8)
Doing any act whose object is the acquiring of, or parting with, a right in an immovable or a valuable movable.
(9) Constructing, modifying building or other structures, or making extensive repairs.
(10)
Entering an action in Court or doing any legal proceedings except the application made under Section 35 and the application for removal of his curator.
(11) Making a compromise or submitting a dispute to arbitration

For acts other than those mentioned in paragraph one, the conduct of which by a quasi-incompetent may detriment to his own property or family, the Court is empowered, in giving and order effecting any person to be quasi-incompetent or upon the application made subsequently by the curator, to instruct the quasi-incompetent to obtain consent of the curator prior to conduct of such acts.

If the quasi-incompetent cannot do any act as mentioned in paragraph one or paragraph two by himself because of his physical or mental infirmity, the Court may give an order empowering the curator to act on behalf of the quasi incompetent, and the provisions relating to guardian shall apply mutatis mutandis.

The order of the Court under this Section shall be published in the Government Gazette. Any act contrary to the provisions of this Section is voidable.

Section 35. If the curator does not give consent to the quasi-incompetent for doing any acts under Section 34 with unreasonable ground, the Court may, upon the application of the quasi-incompetent, permit him to do the act without having to obtain consent of his curator, should the act will be beneficial to the quasi-incompetent.

Section 36. If the cause for the Court adjustment of the quasi-incompetent ceases to exist, the provisions of Section 33 shall apply, mutatis mutandis

PART III

Domicile

Section 37. The domicile of a natural person is the place where he has his principal residence.

Section 38. If a natural person has several residences where he lives alternately, or various centers of habitual occupation, either one shall be considered his domicile.

Section 39. If the domicile is not known, the place of residence is deemed to be his domicile.

Section 40. The domicile of a natural person who has no habitual residence, or employs his life in voyages without a central place of business shall be held to be the place where is found.

Section 41. The domicile is changed by transferring the residences with manifest intention of changing.

Section 42. If a person selects any place with manifest intention of making it a special domicile for any act, which is deemed to be the domicile in respect to such act.

Section 43. The domicile of husband and wife is the place where husband and wife cohabit as a couple unless either husband or wife expresses his/her intention to have a separate domicile.

Section 44. The domicile of a minor is that of his legal representative who is the person exercising parental power or the guardian.
In the case where the minor is under parental power of his parents and the parents have separate domiciles, the minor shall have domicile of his father or mother with whom he lives.

Section 45. The domicile of an incompetent person is that of his guardian.

Section 46. The domicile of a public official is the place where he exercises his function, provided that such function is not temporary, periodical or mere commission.

Section 47. The domicile of a convict by a final judgment of the court or by a lawful order is the prison or correctional institution where he is imprisoned until his release. 

PART V

Disappearance

Section 48. If a person has left his domicile or residence without having appointed an agent with general authority and it is uncertain whether he is living or death, the Court may, on the application of any interested person or of the Public Prosector, order such provisional measures to be taken as may be necessary for the management of property of such person.

The Court may appoint a amanager of the property after one year has elapsed from the day when he has left his domicile or residence if no news of him has ever been received, or from the day when he ahs last been seen or heard of.

Section 49. If an agent with general authority has been appointed by the absent person but his authority comes to an end, or it appears that his management is likely to cause injury to the absent person, the provisions of Section 48 shall apply mutatis mutandis.

Section 50. The court may, on the application of any interested person or of the public prosecutor, order an inventory of the property to be made by the agent with general authority, incompliance with an injunction to be given by the court.

Section 51. Subject to the provisions of Section 802, if it is necessary for the agent with general authority to do any act beyond the scope of his authority, he must apply for court’s permission and may do so on obtaining such permission.

Section 52. The manager who appointed by the court must finish making the inventory of the property of the absent person within three months as from the day on which the appointment order of the court comes to his knowledge.

However, the manager may apply to the court for the extension of the time.

Section 53. The inventory under Section 50 and Section 52 must be made in the presence of, and signed by two witnesses. Such two witnesses must be a spouse or a relative being of age of the absent person. If neither spouse nor relatives is found, or the spouses and relative refuse to be witnesses, other persons being of age may act as witnesses.

Section 54. The manager has such power of an agent with general authority as provided in Section 801 and Section 802. If the manager deems it necessary to do any acts beyond the scope of his authority, he must apply for the court’s permission and may do so on obtaining such permission.

Section 55. If the absent person has appointed an agent with special authority, the manager cannot interfere with such special agency, but he can apply to the court for an order removing the agent if it appears that his management is likely to cause injury to the absent person.

Section 56. The court may, on the application of any interested person or of the public prosecutor or of its own motion;

(1) Require the manager to give proper management security and return of the property entrusted to him.
(2) Require him to give information as to the property condition of the absent person.
(3) Remove him and appoint another manager in his stead.

Section 57. The court may, in the order appointing the property manager, determine a remuneration to be paid to the manager out of the property of the absent person; in default of which the manager may afterwards applies to the court for determining such remuneration.

The court may, on the application of the manager or of an interested person or the public prosecutor, or of its own motion when it appears that circumstances on the property management have changed, give an order effecting the determination, suspension, decrease or increase of the remuneration, or anew remuneration payment to be made to the manager.

Section 58. The authority of the manager comes to an end upon:

  1. The return of the absent person.
  2. No return of the absent person but the property having been managed or an agent for managing his property having been appointed.
  3. The death of the absent person or adjudication of disappearance having been given.
  4. The resignation or the death of the manager.
  5. The manager becoming an incompetent or quasi-incompetent person.
  6. The manager becoming bankrupt.
  7. Removal of the manager by the court.

Section 59. When the authority of the manager comes to an end under Section 58 (4) (5) or (6), the manager or his heir, administrator, guardian, curator, official receiver of the person charged with the duty to take care of the property manager, as the case may be, must inform the court without delay of such ending for the court will give an order concerning the property manager as it deems proper.

During such period of time, the said person must take all reasonable steps compatible with circumstances to protect the interest of the absent person until the property of the absent person is delivered to any person as to be ordered by the court.

Section 60. The provisions concerning Agency of this Code shall be applied to the property management of the absent person mutatis mutandis .

Section 61. If a person has left his domicile or residence and it has been uncertain for five years whether he is living or dead, the court may, on the application of any interested person or of the public prosecutor, adjudge that such person has disappeared.

The period of time under paragraph one shall be reduced to two years;

  1. As from the day when the battle or war comes to an end and the person who had been engaged in such battle or war has been disappeared therein;
  2. As from the day when the vehicle on which the person had been traveling was lost or destroyed;
  3. As from the day when any peril of his life other than those mentioned in (1) or (2) has passed and the person had been in such peril.

Section 62. A person against whom an adjudication of disappearance has been made is deemed to have died at the completion of the period specified in Section 61.

Section 63. If it is proved by the person adjudged disappearance, any interested person or of the public prosecutor that the person who disappeared is living, or that he died at a time different from that specified in Section 62, the court must, upon the application of the said person, revoke the adjudication; but this does not affect the validity of acts done in good faith between the adjudication and the revocation.

Section 64. The adjudication of disappearance and its revocation shall be published in the Government Gazette.

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CHAPTER II

JURISTIC PERSONS

PART I

General Provisions

Section 65. A juristic person can come into existence only by virtue of this Code or of other law.

Section 66. A juristic person has rights and duties conformity with the provisions of this Code or of other law within the scope of its power and duties, or its object as provided by or defined in the law, regulation or constitutive act.

Section 67. Subject to Section 66, a juristic person enjoys the same rights and is subject to the same duties as a natural person, by reason of their nature , may only be enjoyed or incurred only by a natural person.

Section 68. The domicile of a juristic person is the place where it has its principal office or establishment, or which has been selected as a special domicile in its regulation or constitutive.

Section 69. In the case where a juristic person has several establishments or has its branch office, the place of its branch office may also be considered its domicile as to acts there performed.

Section 70. A juristic person must have one or several representatives as prescribed by the law, regulations or its constitutive act, decisions as to the affairs of juristic persons are made by a majority of the representatives.

Section 71. In the case where a juristic person has several representatives, if it is not otherwise provided by the law, or defined in regulations or constitutive act, decisions as to the affairs of juristic person are made by a majority of representatives.

Section 72. The change of representatives of juristic person or of any restriction, or modification of the power of representatives shall be effective after having complied with the law, regulations or its constitutive act, but cannot be set up against third person acting in good faith.

Section 73. If a vacancy occurs among the representatives of juristic person, and there is reason to believe that damage might ensue from delay, the Court may, on the application of any interested person or of the Public Prosecutor, appoint a temporary representative.

Section 74. In a matter in which the interested of a juristic person conflict with those of the representative of juristic person, the latter has no representative power.

Section 75. If, in the case under Section 74, it causes a non-existence of the representatives of juristic person, or number of the remaining representatives cannot constitute quorum of the meeting or is sufficient to execute such matter, if it is not otherwise provided by the law, or defined in its regulations or constitutive act, the provisions of Section 73 shall apply to the appointment of special representatives, 'mutatis mutandis'.

Section 76. A juristic person is bound to make compensation for any damage done to other persons by its representatives or the person empowered to act on behalf of the juristic person in the exercise of their functions, saving its right of recourse against the causers of the damage.

If damage is done to other persons by an act which is not within the scope of the object or power and duties of the juristic person, all the persons as mentioned in paragraph one who agreed such act or executed it, are jointly liable to make compensation.

Section 77. The provisions on Agency of this Code shall apply to the relationship between the juristic persons and its representatives, and between the juristic person or its representative and third persons, ‘mutatis mutandis'.

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PART II

Association

Section 78. An association created for conducting any activity which, according to its nature, is to be done continuously and collectively by persons other than that of sharing profits or incomes earned, must have its regulations and must be registered according to the provisions of this Code

Section 79. The regulations must at least have the following particulars:

(1) The name of the association.
(2) Its object.
(3) Address of its principal office and all its branches.
(4) Rules for admission of its members and conclusion of membership.
(5) Rates and member-fee.
(6) Rules for the Committee of association, i.e. number of the directors, appointment of the directors, term of office of the directors, retirement of office of the directors and meetings of the Committee.
(7) Rules for the management of the association, the keeping of accounts and the property of the association.
(8) The association must have the word ‘association' incorporated with its name.

Section 81. The application for registration of an association must be filed jointly in writing by at least three of the would-be members of the association with the Registrar of the area where the principal office of the association is situated, and regulations of the association, list of names, addresses and occupations of at least ten would-be members of the association are to be attached to the application.

Section 82. When the application for registration together with the regulations are received by the Registrar and the application is found correct under Section 81 and the regulations are correct under Section 79, the object of the association is not contrary to the law or good moral or endangering public order or national security and all particulars contained in the application or in the regulations conform the object of the association, or the would-be directors of the association have status or conduct suitable for implementing the object of the association, the Registrar shall make registration and issue a certificate of registration to the association. The registration shall be published in the Government Gazette.

It is found that the application or the regulations are not in conformity with Section 81 or Section 79, the particulars contained in the application or in the regulations do not conform to the object of the association, or would-be directors of the association do not have the status and conduct suitable for implementing the object of the association, the Registrar shall instruct the applicant to make correction or alteration, and shall, after the correction or alteration having been made, make registration and issue a certificate of registration to the association.

If it is considered by the Registrar that the registration cannot be made because the object of the association is contrary to the law or good moral or likely to endanger public order or national security, or the applicant fails to make correction or alteration as such within thirty days from the day of which the instruction of the Registrar came to his knowledge, the Registrar shall give and order refusing the registration and inform the applicant without delay of reasons for such refusal.

The applicant is entitled to appeal in writing against the order of refusal for registration to the Minister of Interior through the Registrar within thirty days from the date of receipt of the refusal order.

The Minister of Interior shall decide the appeal and inform the appellant of the decision within thirty days from the date of receipt of the written appeal by the Registrar. The decision of the Minister of Interior shall be final.

Section 83. The association so registered is a juristic person.

Section 84. No alterations of and additions to the regulations of an association may be made, except by a resolution of the general meeting. Such alterations and additions must be deposited for registration at the Registrar Office where the principal office of the association is situated within fourteen days from the date of the resolution, and the provisions of Section 82 shall apply, mutatis mutandis. It shall become effective after the registration thereof by the Registrar.

Section 85. The appointment of new directors of the association of the alteration thereof shall be made in accordance with the regulations of the association and must be registered by the Registrar at the Registrar Office where the principal office of the association is situated within thirty days from the date of such appointment or alteration of the directors of the association.

If it is considered by the Registrar that any of the directors under paragraph one does not have status or conduct suitable for implementing the object of the association, the Registrar may refuse the registration of that director of the association. In case of refusal, the Registrar shall notify the association of reason for such refusal within sixty days from the date of application, and the provisions of Section 82 paragraph four and paragraph five shall apply, mutatis mutandis.

If the registration of new directors of the association has not yet been made, the old directors of the association shall further perform the functions of the directors of the association until the registration of the new directors of the association is made, unless otherwise provided in the regulations of the association.

Section 86. The directors of the association is to carry on the activities of the association under the law and the regulations of the association, and under supervision of the general meetings.

Section 87. An association is represented in its relations with third persons by its committee.

Section 88. All activities performed by the Committee of the association are valid even though it appears afterwards that there is any fault concerning the appointment or qualification of the directors of the association.

Section 89. A member of an association is entitled during working hours of the association inspect the business and property of the association.

Section 90. A member of the association has to pay total subscription on the day when he applies for being member or at the beginning of the period for payment of subscription, unless otherwise provided in the regulations.

Section 91. A member of the association is entitled to withdraw at any time from the association, unless otherwise provided in the regulations.

Section 92. Each member of an association is liable to the debt of the association for not more than the amount of the subscription due by him.

Section 93. A general meeting shall be called by the directors of the association at least once a year.

Section 94. The Committee of the association may summon extraordinary meetings as they think fit.

A requisition for summoning an extraordinary meeting may be made in writing by members of not less than one-fifth of the whole members of the association, or of not less than one hundred, or of not less than the number set forth in the regulations to the Committee of the association. The requisition must specify the object for which the meeting is required to be summoned.

When the Committee of the association have received the requisition for the summoning of an extraordinary meeting under paragraph two, they shall summon such meeting within thirty days from the date of receipt of the requisition.

If the meeting is not summoned within the period of time under paragraph three, the members who have made the requisition for summoning such extraordinary meeting or other members of not less that the number set forth in paragraph to may summon the meeting by themselves.

Section 95. In summoning a general meeting, a notice for the meeting shall be sent not later than seven days before the date fixed for the meeting to every member whose name appears in the register of the association, or may be published at least twice in a prevailing local paper, not less than seven days before the date of the meeting.

The notice must specify the place, the day and the hour of the meeting as well as its agenda, and closely relevant details and documents shall also be sent. As for a summoning of the extraordinary meeting through a publication, the said details and documents must be provided and ready for distributing to the member who request therefore at the place fixed by the person summoning such meeting.

Section 96. In a general meeting of the association, members present at the meeting of not less than one-half of the total number of members shall constitute a quorum, unless provisions on a quorum of the meeting in the regulations of the association are otherwise provided.

If the quorum so provided is not present, the general meeting, if summoned upon requisition of members, shall be dissolved. But if the general meeting had not been summoned upon the requisition of members, another general meeting shall be summoned by the Committee within fourteen days from the date of the fist summoned meeting and at such later meeting no quorum shall be necessary.

Section 97. Decision of the meeting shall be by majority of votes, except in the case where a particular majority of votes is specially provided in the regulations of the association.

Each member shall have one vote. In case of an equally of votes, the chairman of the meeting shall have an additional vote as casting vote.

Section 98. Any member may vote by proxy, unless otherwise provided in the regulations of the association.

Section 99. Any director or any member of an association who has in a resolution an interest in conflict with an interest of the association cannot vote in such resolution.

Section 100. I any general meeting has been summoned or held or a resolution passed contrary to the regulations of the association or the provisions of this Title, any such member or the public Prosecutor may apply to the Court for cancellation of the resolution of such general meeting, provided that the application is entered within one month after the date of the resolution.

Section 101. An association is dissolve:

(1) In the cases provided in its regulations, or
(2) If formed for a definite period of time, by the expiration of such period, or
(3) If formed for any undertaking, by the termination of such undertaking, or
(4) By a resolution to dissolve passed in a general meeting, or
(5) By the association becoming bankrupt, or
(6) By having its name struck of the register by the Registrar under Section 102, or
(7) By an order of the Court under Section 104.

Section 102. The Registrar shall have the power to give an order to have the name of an association struck off the register in the following cases:

(1) If appears after registration that the object of the association is contrary to the law or public moral or is likely to endanger the public peace or national security and an order for alteration of such object has been given by the Registrar, but the association fails to comply therewith within period of time fixed by the Registrar.
(2) If appears that any activity conducted by the association is contrary to the law or public moral or is likely to endanger the public peace or national security.
(3) The association has stopped doing business for more than two consecutive years.
(4) It appears that the association allows or let other persons who are not members of the association to execute business of the association.
(5) The number of members of the association has been less than ten for more than two consecutive years.

Section 103. After the name of any association has been struck off the register by the order of the Registrar under Section 102, the Registrar shall send to order together with its reason to the association without delay, and shall publish such dissolution in the Government Gazette.

Any director or member of the association of not less than three in number are entitled to appeal against the order of the Registrar given under paragraph one to the Minister of Interior. The appeal must be in writing and sent to the Registrar within thirty days from the date of being informed of the order, and provisions of Section 82 paragraph five shall apply, mutatis mutandis.

Section 104. When a case under Section 102 happens, an interested person may request the Registrar to have the name of the association struck off the register. If the Registrar fails to comply with the request and does not inform the person who made the request of the reasons within a reasonable period of time, or the reason given by the Registrar are not satisfied by the person having made the request, he may apply to the Court for dissolution of the association.

Section 105. When an association is to be dissolved under Section 101 (1) (2) (3) or (4), the Committee of the association that holds the office at the time of dissolution of the association shall inform the Registrar of the dissolution within fourteen days from the date of such dissolution.

In case where an association is declared bankrupt by a final judgment or order of the Court under Section 101 (5), or is dissolved by a final order under Section 104, the Court shall notify the Registrar of the said judgment or order.

The Registrar shall publish such dissolution in the Government Gazette.

Section 106. Upon dissolution of an association, the liquidation of the association shall be made, and the provisions in Book III, Title 22 on Liquidation of Registered Partnerships, Limited Partnerships and Limited Companies shall apply to the liquidation of the association, mutatis mutandis.

Section 107. After liquidation, the remaining assets, if any, cannot be distributed among the members of the association. They shall be transferred to such other association or foundation, or any juristic person whose object is of charity purposes as may be designated in the regulations, by the resolution of the association in general meeting. If no transferee of the said assets has been designated, by the regulations or by the resolution of association in general meeting, or if designated but it is unable to comply therewith, the remaining assets shall belong to the State.

Section 108. Any person may, on application to the Registrar, inspect the documents relating to an association kept by the Registrar or request for certified copies of the said documents to be delivered to him by the Registrar, and Registrar, and the Registrar shall comply therewith after payment of such fee as may be prescribed by the Ministerial Regulations has been made.

Section 109. The Minister of Interior shall take charge and control of the execution of the provisions of this Part and have the power to appoint the Registrar and to issue Ministerial Regulations on:

(1) The application for registration and the making of registration.
(2) Fees for the registered, the inspection of documents and the copying of documents as well as the fee for any activities concerning the foundation to be performed by the Registrar, including the exemption of the said fees.
(3) The conduct of business of the association and its register.
(4) Any other matters for carrying out the provisions of this Title.

Such Ministerial Regulations Shall become effective upon their publication in the Government Gazette.

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PART III

Foundation

Section 110. A foundation consists of property specially appropriated to public charity, religious, art, scientific, education or other purpose for the public benefit and not for sharing profit, and has been registered under the provisions of this Code.

The property of a foundation must be managed for implementing the objects of that foundation, and not for seeking interest for any person.

Section 111. A foundation must have its regulations and must have a Committee, consisting of at least three persons, to conduct business of the foundation according to the law and regulations of the foundation.

Section 112. The regulations must have at least the following particulars:

(1) The name of the association
(2) Its objects
(3) Addresses of its principal office and all its branch offices.
(4) Its property at the time of creation.
(5)
Rules for the Committee of the foundation, i.e. number of the directors, appointment of the directors, term of office of the directors, retirement of office of the directors ad meetings of the Committee.
(6)
Rules for management of the foundation, the management of the property and keeping of accounts of the foundation.

Section 113. The foundation must have a word ‘foundation' incorporated with its name.

Section 114. The application for registration of a foundation must be filed in writing with the Registrar of the area where the principal office of the foundation is situated, and it must at least specify the owner of the property and the list of the property appropriated for the foundation together with the list of names, addresses and occupation of all the would-be directors of the foundation, including the regulations of the foundation.

Section 115. When the application for registration together with the regulations are received by the registrar, and the application is found correct under Section 114 and the regulations correct under Section 112, the objects of the foundation are not contrary to the law or good moral or endangering public order or national security and all particulars contained in the application or in the regulations conform to the objects of the foundation, or the would-be directors of the foundation have status or conduct suitable for implementing the objects of the foundation, the registrar shall make registration and issue a certificate of registration to the foundation The registration shall be published in the Government Gazette. If it is found that the application or the regulations are not in conformity with Section 114 or Section 112, the particulars contained in the application or in the regulations do not conform to the object of the foundation, or the would-be directors of the foundation do not have status and conduct suitable for implementing the object of the foundation, the registrar shall instruct the applicant to make correction or alteration, and shall, after the correction or alteration having bee made, make registration and issue a certificate of registration to the foundation.

If it is considered by the registrar that the registration cannot be made because the objects of the foundation are contrary or the law or good moral or likely to endanger public order or national security, or the applicant fails to make correction or alteration as such within thirty Thailand Civil and Commercial Code days counting from the day on which the instruction of the registrar came to his knowledge, the registrar shall give an order refusing the registration and inform the applicant without delay of reasons for such refusal.

The applicant is entitled to appeal in writing against the order of refusal for registration to the Minister of Interior through the registrar within thirty days from the date of receipt of the refusal order.

The Minister of Interior shall decide the appeal and inform the appellant of the decision within thirty days from the date of receipt of the written appeal by the registrar. The decision of the Minister of Interior shall be final.

Section 116. Before the registration of the foundation being made by the registrar, the applicant for creating a foundation is entitled to withdraw the application by submitting a written notice to the registrar. The right to withdraw the application does not devolve on the heirs. In the case where the application for establishment of the foundation is made by many persons, if it is withdrawn by any applicant, it shall become extinguished.

Section 117. If the applicant for creating t he foundation dies before the registration by the registrar, and the deceased does not make a will revoking the application for creation of such foundation, the application shall be effective and be proceeded on with the creation of such foundation by the heirs or administrator, or the person entrusted by the deceased. If the said person fails to proceed with the matter within one hundred and twenty days from the death of the applicant for creation of the foundation, any interested person or the public prosecutor may proceed with the matter in the capacity of the applicant.

If the foundation cannot be created in accordance with the objects set by the deceased and no testamentary disposition is provided otherwise, the provisions of Section 1679 paragraph two shall be applied mutatis mutandis.

If proceeding under Section 1679 paragraph two cannot be made or the foundation cannot be created under Section 115, the appropriated property shall be vested in the estate of the deceased.

Section 118. If there is a testamentary disposition to create a foundation under Section 1676, the person charged with the duty to create the foundation under Section 1677 paragraph one shall precede with the matter under Section 114 and under provisions of this Section.

If the person charged with the duty to create the foundation under paragraph one fails to apply for registration to effect the creation of the foundation within one hundred and twenty days from the date that the testamentary disposition to create the foundation came to or should have come to knowledge of the said person, any interested person or the public prosecutor may apply for such registration.

If the applicant for registration of the foundation fails to make modifications or alterations in compliance with the instruction, any interested person or the public prosecutor may apply for such registration again.

If a protest is made to the registrar on the ground that the w ill does not provide for creating the foundation, the registrar shall notify the protestor to make a request to the court within sixty days counting from the date he has been notified by the registrar, and the registrar shall not consider the registration but wait for the judgment or order of the court and comply therewith. If the protester fails to make the request to the court within the time limit, the registrar shall further consider the registration of the foundation.

Section 119. If the will that contains the testamentary disposition does not have such particulars as provided in Section 112 (1) (3) (5) or (6), the applicant under Section 118 can stipulate the said particulars. If any interested person makes a protest against the applicant, the registrar shall give an order as he thinks fit and notify the applicant and the protester of the order, he can file a protest with the court within sixty days count ing from the date of receipt of the notification from the registrar. The registrar shall not consider the registration but wait for the judgment or order of the court and comply therewith. If no protest is filed within the time limit, the registrar shall consider the registration according to the order given.

Section 120. If there are many applicants for registration of the foundation under the will of the same de cujus, and the applications contradict each other, the registrar shall summon the applicants for making an agreement. If the applicants do not show up or cannot come to an agreement within a period of time fixed by the registrar, the registrar shall give an order as he thinks fit, and the provisions of Section 119 shall be applied mutatis mutandis.

Section 121. After registration of the foundation, if the applicant for creating the foundation is still alive, the property appropriated therefore shall vest in the foundation from the date of registration of the foundation by the registrar.

If the applicant for creating a foundation dies before the registration of the foundation by the registrar, the property appropriated therefore shall vest in the foundation from the death of the applicant after the registration.

Section 122. The foundation so registered is a juristic person.

Section 123. A foundation is represented in its relations with third persons by its committee.

Section 124. All activities performed by the committee of the foundation are valid even though it appears afterwards that there is any fault concerning the appointment or qualification of directors of the foundation.

Section 125. The appointment of new directors of the foundation or the alteration thereof shall made in accordance with the regulations of the foundation and must be registered within thirty days counting from the date of such appointment or alteration of the directors of the foundation.

If it is considered by the registrar that any of the directors under paragraph one does not have status or conduct suitable for implementing the objects of the foundation, the registrar may refuse the registration of the director.

In case of refusal, the registrar shall notify reasons of the foundation for such refusal within sixty days counting from the date of application, and the provisions of Section 115 paragraph four and paragraph five shall be applied mutatis mutandis.

In the case where the directors of the foundation vacate their office and no director is remaining or the remaining directors are unable to perform their function, the director who has vacated his office shall, if no regulations of the foundation provides, perform further the function of director until the foundation is notified by the registrar of the registration of the new director.

The director who has vacated his office on dismissing account by the order of the court under Section 129 cannot perform his function under paragraph three.

Section 126. Subject to Section 127, the committee of the foundation is empowered to amend the regulations of the foundation.

If the rules and manners for the amendment have been provided in the regulations of the foundations, the amendment must be made according to those provided in the regulations and it shall be deposited for registration at the registrar office within thirty days counting from the date of amendment by the committee of the foundation, and the provision of Section 115 shall be applied mutatis mutandis.

Section 127. The amendment of any particulars in the regulations of the foundation under Section 112 (2) can be made only for the following purposes:

  1. To make the implementation of the object of the foundation possible; or
  2. The change of circumstance makes the object of the foundation become less benefit or makes it unable to carry on the activities to fulfill the object of the foundation, and the object of the foundation so amended are close to the original objects.

Section 128. The registrar shall has the power to inspect, control and supervise the carrying on of activities of the foundation t be in conformity with the law and the regulations of the foundation. For this purpose, the registrar or any competent officials entrusted by the registrar in writing shall have power;

  1. To give and order in writing to a director, officer, employee or agent of the foundation for giving explanation and presenting facts concerning the business of the foundation, or to summon the said person for enquiry or to instruct him to send or produce accounting books and other documents of the foundation for inspection.
  2. To enter the office of the foundation between sunrise and sunset for inspecting the business of the foundation.

In performing the duty under paragraph one, the registrar shall produce his identity card while the entrusted competent officials have to produce to any concerned person their identity cards and a letter of power of the registrar.

Section 129. Any director who causes an injury to the foundation through his wrongful performance of activities or performs the activities contrary to the law or the regulations of the foundation, may application of the registrar, the public prosecutor or of any interested person, be dismissed from being director of the foundation by the court.

If the performance of activities under paragraph one is of the committee of the foundation or the objects of the foundation are not implement without reasonable causes by the committee, the court may, on application of the registrar, the public prosecutor or of any interested person, give an order dismissing the committee from the office.

In case of dismissal of any director or of the committee of the foundation by the court under paragraph one or paragraph two, the court may appoint order or a committee in place of a director or the committee of the foundation so dismissed and registrar shall make registration of the person who has been appointed as director of the foundation by the court.

Section 130. A foundation is dissolved;

  1. Upon such cause as provided in the regulations, or
  2. If formed for definite period of time, by the expiration of such period, or
  3. If formed for any object, upon its object being fulfilled or becoming impossible, or
  4. Upon the foundation becoming bankrupt, or
  5. By an order of the court to dissolve the foundation under Section 131.

Section 131. On the application of the registrar, the public prosecutors or of any interested person, the court may order a foundation t o be dissolved in the following cases;

(1) It appears that the objects of the foundation are contrary to the law.
(2) It appears that the foundation has done the business contrary to the law and good moral, or may endanger the public peace or national security.
(3) It appears that the foundation cannot proceed on its activities by any cause whatsoever or has stopped doing business for more than two years.

Section 132. When a case under Section 130 (1) (2) or (3) happens, the committee of the foundation that holds the office at the time of dissolution of the foundation shall notify the registrar of the dissolution within forty days counting from the date of its dissolution. If the court passes a final judgment or gives a final order to effect to foundation to become bankrupt under Section 130 (4), or gives a final order to dissolve the foundation under Section 131, the court shall also notify the registrar of the said judgment or order. The registrar shall publish the dissolution of the foundation in the Government Gazette.

Section 133. Upon dissolution of the foundation, the liquidation of the foundation shall be made, and the provisions in Book III, Title 22 on Liquidation of Registered Partnerships, Limited Partnerships and Limited Companies shall be applied to the liquidation of the foundation mutatis mutandis.

To this effect, the report on the liquidation shall be submitted to the registrar by the liquidator and it shall be approved by the registrar.

Section 134. After liquidation, the remaining assets shall be transferred to such foundation or juristic person whose object is in conformity with Section 110 as specified in the regulations, the public prosecutor, the liquidator or any interested person may apply to the court for appropriating the assets to other foundation or juristic person whose object is closely similar to that of such foundation.

If the foundation is dissolved by the order of the court under Section 131 (1) or (2) or the appropriation of the assets under paragraph one cannot be made, the assets of the foundation shall vest in the State.

Section 135. On the application to the registrar, any person may access to the documents relating to a foundation kept by the registrar or request for certified copies of the said documents and the registrar shall comply therewith after payment of such fee as prescribed by the Ministerial Regulations.

Section 136. The Minister of Interior shall take charge and control of the execution of the provisions of this Part and have the power to appoint the registrar and issue Ministerial Regulations on;

  1. The application for registration and the making of registration.
  2. Fees for the registration, the inspection of documents and the copying of documents as well as the fee for any activities concerning the foundation to be performed by the registrar including the exemption of the said fees.
  3. Forms of the identity cards of the registrar and of a competent official.
  4. The conduct of business of the foundation and its register.
  5. Any other matters for carrying out the provisions of this Title.

Such Ministerial Regulations shall become effective upon their publication in the Government Gazette.

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TITLE III

THINGS

Section 137. Things are corporeal objects.

Section 138. Property includes things as well as incorporeal objects, susceptible of having a value and of being appropriated.

Section 139. Immovable property denotes land and things fixed permanently to land or forming a body therewith. It includes real rights connected with the land or things fixed to or forming a body with land.

Section 140. Movable property denotes things other than immovable property. It includes rights connected therewith.

Section 141. Divisible things are those which can be separated into real and distinct portions, each forming a perfect whole.

Section 142. Indivisible things are those which cannot be separated without alteration in its substance as well as those which are considered indivisible by law.

Section 143. Things outside of commerce are things incapable of appropriation, and those legally inalienable.

Section 144. A component part of a thing is that which, according to its nature or local custom, is essential to its existence and cannot be separated without destroying, damaging or altering its form or nature.

The owner of a thing has ownership in all its component parts.

Section 145. Trees when planted for an unlimited period of time are deemed to be component parts of the land on which they stand.

Trees which grow only for a limited period of time and crops which may be harvested one or more times a year are not component parts of the land.

Section 146. Things temporarily fixed to land or to a building do not become component parts of the land or building. The same rule applies to a building or other structure which, in thee exercise of a right over another person's land, has been fixed to the land by the person who has such right.

Section 147. Accessories are movable things, which are, according to the usual local conception or clear intention of the owner of the principal thing, attached to such thing permanently for its management, use or preservation, and, by connection, adjustment or otherwise, brought by the owner into the relation with the principal thing, in which it must serve the principal thing.

Even though an accessory is temporarily served from the principal thing, it does not cease to be an accessory.

Saving special disposition to the contrary, the accessory follows the principal thing.

Section 148. By fruit of a thing is a natural fruit and legal fruit.

Natural fruit denotes that which is a natural offspring of and is obtained from a thing in the normal possession or in the use thereof; and it is capable of acquisition at the time when it is severed from the thing.

Legal fruit denotes a thing or other interest obtained periodically by the owner from another person for the use of the thing; it is calculated and may be acquired day by day or according to a period of time fixed.

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TITLE VI

JURISTIC ACTS

CHAPTER I

GENERAL PROVISIONS

Section 149. Juristic act are voluntary lawful acts, the immediate purpose of which is to establish between persons relations, to create, modify, transfer, preserve or extinguish rights.

Section 150. An act is void if its object is expressly prohibited by law or is impossible, or is contrary to public order or good morals.

Section 151. An act is not void on account of its differing from a provision of any law if such law does not relate to public order or good moral.

Section 152. An act which is not in the form prescribed by law is void.

Section 153. An act which does not comply with the requirements concerning capacity of person is voidable. 

CHAPTER II

DECLARATION OF INTENTION

Section 154. A declaration of intention is not void on the ground that the declarant in the recesses of his mind does not intended to be bound by his expressed intention, unless this hidden intention was known to the other party.

Section 155. A declaration of intention made with the connivance of the other party which is fictitious is void; but its invalidity cannot be set up against third persons injured by the fictitious declaration of intention and acting in good faith.

If a declaration of fictitious intention under paragraph one is made to conceal another juristic act, the provisions of law relating to the concealed act shall apply.

Section 156. A declaration of intention is void if made under a mistake as to an essential element of the juristic act.

The mistake as to an essential element of the juristic act under paragraph one are for instance a mistake as to a character of the juristic act, a mistake as to a person to be a partner of the juristic act and a mistake as to a property being an object of the juristic act.

Section 157. A declaration of intention is voidable if made under a mistake as to a quality of the person.

Mistake under paragraph one must be a mistake as to the quality of the person which is considered as essential in the ordinary dealings, and without which such juristic act would have not been made.

Section 158. If the mistake under Section 156 or Section 157 was due to the gross negligence of the person making such declaration, he cannot avail himself of such invalidity.

Section 159. A declaration of intention produced by fraud is voidable.

An act under paragraph one is voidable on account of fraud only when it is such that without which such juristic act would not have been made.

When a party has made a declaration of intention owing to a fraud committed by a third person, the act is voidable only if the other party knew or ought to have known of the fraud.

Section 160. The avoidance of a declaration of intention produced by fraud cannot be set up against a third person acting in good faith.

Section 161. If the fraud is only incidental that is to say it has merely induced a party to accept more onerous terms than would otherwise have done, such party can only claim compensation for damage resulting from such fraud.

Section 162. In bilateral juristic acts, the intentional silence of one of the parties in respect to a fact or quality of which the other party is ignorant, is deemed to be a fraud if it is proved that, without it, the act would not have been made.

Section 163. If both parties acted with fraud, neither of them can allege it to void the act or to claim compensation.

Section 164. A declaration of intention is voidable if made under duress.

Duress, in order to make an act voidable, must be imminent and so severe that makes him fear and without it, the act would not have been made.

Section 165. The threat of the normal exercise of a right is not considered duress. Any act made owning to reverential fear is not considered an act made under duress.

Section 166. Duress vitiates the juristic act, even when it is exercised by a third person.

Section 167. In determining a case of mistake, fraud or duress, the sex, age, position health, temperament of the person made the intention and all other circumstances and environment which may relate to that act shall be taken into consideration.

Section 168. A declaration of intention made to a person in his presence takes effect from the time when it becomes known to the receiver of the intention. This also apply to the declaration of intention made by one person to the other through telephone, other communication devices, or other means through which similar communication can be made.

Section 169. A declaration of intention made to a person not in his presence takes effect from the time when it reached the receiver of the intention. If does not become effective if a revocation reaches him previously or simultaneously.

Even though the person who made a declaration of intention dies, becomes incompetent or quasi-incompetent by an order of the Court after it has been sent, the validity of declaration is not impaired thereby.

Section 170. If the declaration of intention is made to a minor or a person adjudged incompetent or quasi-incompetent, it cannot be set up against him unless his legal representative, guardian or curator, as the case may be, has knowledge of it or has given prior consent to it.

The provisions of paragraph one do not apply to the declaration of intention concerning any matter that the minor or the incompetent is required by law to make by himself.

Section 171. In the interpretation of a declaration of intention, the true intention is to be sought rather than the literal meaning of the words or expressions. 

CHAPTER III

VOID AND VOIDABLE ACTS

Section 172. A void act cannot be ratified, and its nullity may be alledged at any time by any interested person.

The return of a property arising from a void act shall be governed by the provisions on Undue Enrichment of the Code.

Section 173. If any part of an act is void the whole act is void, unless it may be assumed under the circumstances of the case that the parties intended the valid part of the act to be separable from the invalid part.

Section 174. If a void act complies with the requirements of another act which is not void, it is valid as the other act, if it may be assumed that such validity would have been intended by the parties, had they known of the invalidity of the intended act.

Section 175. A voidable act may be avoided by:

(1)
The legal representative or the minor after becoming sui juris, but the avoidance can be made by the minor minor before his becoming sui juris if a consent thereti has been given by his legal representative, or
(2)
The person adjudged incompetent or quasi-incompetent after he has recovered his capacity, or by the guardian or curator, as the case may be, but the avoidance can be made by the quasi-incompetent before recovery of his capacity if a consent thereto has been given by his curator, or
(3)
The person who has made the declaration of intention owning to mistake, fraud or duress, or
(4)
The person of unsound mind who did the voidable juristic act under Section 30 after he has recovered his capacity.

If the person who did the voidable juristic act dies before making the avoidance, it may be avoided by his heir.

Section 176. When a voidable act is avoided, it is deemed to have been void from the beginning; and the parties shall be restored to the condition in which they were previously, and if it is not possible to so restore them, they be indemnified with an equivalent.

If any person knew or ought to have known that an act is voidable, he, after making the avoidance, is deemed to have known that the act is void since the voidable act became known or ought to become known to him.

The claim resulting from restoring them to the previous condition under paragraph one cannot be exercised later than one year from the date of avoidance of the voidable act.

Section 177. If any person entitled to avoid a voidable act under Section 175 ratifies a voidable act, it is deemed to have been valid from the beginning; but the right of third persons cannot be affected thereby.

Section 178. The avoidance of or ratification to a voidable act could be made by a declaration of intention made to the other party who is a determinate person.

Section 179. A ratification is valid only if it is made after the state of facts forming the ground of voidability has ceased to exist.

When a person adjudged incompetent or quasi-incompetent or a person of unsound mind who did a voidable juristic act under Section 30 acquires knowledge of such act after he has recovered his capacity, he can ratify it only after acquiring knowledge.

The heir of the person having done the voidable juristic act can ratify such act after the death of such person unless the right to avoid the voidable juristic act of the deceased has extinguished.

The provisions of paragraph one and paragraph two shall not apply to a ratification to the voidable juristic act made by the legal representative, guardian or curator.

Section 180. If after the time when ratification according to Section 179 could be made, any of the following facts takes place in regard to a voidable act by an act of the person entitled to avoid the voidable act under Section 175, it is deemed to be ratified, unless a reservation is expresses, such as:

(1) The obligation has been fully or partially performed.
(2) The performance of the obligation has been demanded .
(3) A novation of the obligation has been effected.
(4) Security has given for the obligation.
(5) The whole or part of the right or liability has been transferred.
(6) Any other acts done which indicate the ratification.

Section 181. A voidable act cannot be avoided later than one year from the time when ratification could have been made, or later than ten years since the act was done.

CHAPTER IV

CONDITIONS AND TIME

Section 182. A clause which subordinates the effect or the end of the effect of a juristic act to a future and uncertain event, is considered a condition.

Section 183. A juristic act subject to a condition precedent takes effect when the condition is fulfilled.

A juristic act subject to a condition subsequent ceases to have effect when the condition in fulfilled.

If the parties to the act have declared an intention that the effect of the fulfillment of a condition shall relate back to a time before its fulfilled, such intention is to govern.

Section 184. Any party to a juristic act subject to a condition must not, while the condition is pending, do any thing by which the benefit which the other party might derive from the fulfillment of the condition impaired.

Section 185. The rights and duties which the parties have, while the condition is pending, may be disposed of, inherited, protected or secured according to law.

Section 186. If the fulfillment of a condition is prevented not in good faith by the party to whose disadvantage it would operate, the condition is deemed to have been fulfilled.

If the fulfillment of a condition is brought about in bad faith by the party to whose advantage it would operate, the condition is deemed not to have been fulfilled.

Section 187. When the condition is already fulfilled at the time of the juristic act, the latter is unconditionally valid, if the condition is precedent, and is void, if the condition is subsequent.

When it is already certain at the time of the juristic act that the condition cannot be fulfilled, the act is void, if the condition is precedent, and unconditional valid, if the condition is subsequent.

The parties still have rights and duties according to Section 184 and Section 185 so long as they do not know whether the condition is fulfilled under paragraph one or cannot be fulfilled under paragraph two.

Section 188. A juristic act is void if it is subject to an unlawful condition, or a condition contrary to public order or good morals.

Section 189. A juristic act upon a condition precedent which is impossible is void.

A juristic act upon a condition subsequent which is impossible is unconditionally valid.

Section 190. A juristic act upon a condition precedent which depends upon the will of the debtor is void

Section 191. If a time of commencement is annexed to a juristic act, its performance cannot demanded before such time arrives.

If a time of ending is annexed to a juristic act, its effect ceases when such time arrives.

Section 192. It is presumed that a time of commencement or ending is fixed for the benefit of the debtor, unless it appears from the tenor of the instrument or from the circumstances of the case that it was intended for the benefit of the creditor, or of both parties.

The benefit of such a time may be waived, but this will not affect any benefit which would accrue there from to the other party.

Section 193. In the following cases the debtor cannot take advantage of a time of commencement or ending:

(1)
If he has been ordered by the Court to place his assets under final custody and control according to the law on bankruptcy.
(2) If he has not given security when he was bound to give it.
(3) If he has destroyed or diminished any security given.
(4) If the debtor has produced as security a property of other person without the latter's consent.

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TITLE V 

PERIODS OF TIME

Section 193/1. The manner of computing all periods of time is governed by the provisions of this Title, unless it is otherwise provided by law, by juridical order, by rules and regulations or by a juristic act.

Section 193/2. A period of time is calculated by day. But if it is determined shorter than a day, it shall calculated as such.

Section 193/3. If the period of time is determined shorter than a day, it begins to run at once.

When a period of time is determined days, weeks, months or years, the first day of the period is not included in the calculation, unless the period begins to run on that day from the time which is customary to commence business.

Section 193/4. As far as the legal proceedings, official business or commercial and industrial business are concerned, a day means working hours determined by law, by a judicial order or by rules and regulations, or usual working hours of that business, as the case may be.

Section 193/5. The period determined in weeks, months or year are calculated according to the calendar.

If the period is not computed from the beginning of a week, month or year , it ends on the day preceding that day of the last week, month or year which corresponds to that on which it began. If a period measured in months or years there is no corresponding day in the last month, the last day of such month shall be the day of ending.

Section 193/6. If a period of time is determined in months and days, or in months and a part of a month, a full month shall be first measured and then a number of days or a part of a month measured in days.

If a period of time is determined in a part of a year, the part of a year shall be first measured in months and a part of a month, if any, shall be measured in days.

In calculating a part of a month under paragraph one and paragraph two, thirty days is regarded one month.

Section 193/7. If a period of time is extended and no beginning day of the extension is determined, the first day of the extension is the day following the last day of the original period.

Section 193/ 8. If the last day of a period is a holiday according to an official notification or a custom on which no business is done, the period includes the next working day. 

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TITLE VI

PRESCRIPTION

CHAPTER I

GENERAL PROVISIONS

Section 193/9. A claim is barred by prescription if it has not been enforced within the period of time fixed by law.

Section 193/10. After the lapse of the period of prescription for claims, the debtor is entitled to refuse performance.

Section 193/11. The periods for prescription fixed by law cannot be extended or reduced.

Section 193/12. Prescription begins and run from the moment when the claim can be enforced. If the claim is to a forbearance, prescription begins to run from the moment when the right is fist infringed.

Section 193/13. If the creditor may not demand performance until he has given notice to the debtor, prescription begins to run from the moment when notice can be first given. If the debtor is not bound to perform until a given period has elapsed since the notice, prescription begins to run from the expiration of this period.

Section 193/14. Prescription is interrupted if:

(1)
The debtor has acknowledged the claim towards the creditor by written acknowledgement, by part payment, payment of interest, giving security, or by any unequivocal act which implies the acknowledgment of the claim.
(2) The creditor enters an action for the establishment of the claim or for requiring performance.
(3) The creditor applies for receiving a debt to arbitration.
(4) The creditor submits the dispute to arbitration.
(5) The creditor does any act which brings an effect equivalent to entering an action.

Section 193/15. When prescription is interrupted , the period of time which has elapsed before interruption does not count for prescription.

A fresh period of prescription begins to run from the time when the interruption ceases.

Section 193/16. The creditor of an obligation for the payment of money periodically is entitled to require from the debtor, at any time before the completion of the period of prescription, a written acknowledgment of the obligation in order to obtain evidence of the interruption of prescription.

Section 193/17. In the case where prescription is interrupted due to the case under Section 193/ 14 (2), if the Court has passed a final judgment to dismiss the action, or the action has terminated and has been disposed of on the ground of being withdrawn or abandoned, the prescription shall be deemed to have never been interrupted.

In the case where the Court refuses to accept, return or dismisses the action on the ground of want of jurisdiction, or the action is dismissed with the right to re-enter the action in Court and the period of prescription expired pending proceedings, or would have expired within sixty days from the date of final judgment or order, the creditor shall be entitled to enter an action in Court for establishing his claim or for requiring performance of the obligation within sixty days from the date of final judgment or order.

Section 193/18. The provisions of Section 193/17 shall apply, mutatis mutandis, to interruption of prescription due to the case under Section 193/14 (3), (4) and (5).

Section 193/19. If at any time when the prescription would end, the creditor is prevented by force majeure from effecting a interruption, the prescription is not completed until thirty days after the time when such force majeure has ceased to exist.

Section 193/20. If prescription of claim of a minor, or a person of unsound mind whether adjudged incompetent or not, would have expired while the said person does not acquire full capacity, or within one year from the day when the said person is without a legal representative or a guardian, if is not completed until the expiration of one year after he has acquired full capacity or has a legal representative or guardian, as the case may be. If the period of prescription of the claim is shorter than one year, the shorter period of time shall apply in place of the said period of one year.

Section 193/21. If prescription of claim of a minor, an incompetent or a quasi-incompetent against his legal representative, guardian or curator would have expired while the said person does not acquire full capacity, or within one year from the day when the said person is without legal representative, guardian or curator, if is not completed until the expiration of one year after he has acquired full capacity or has a legal representative, guardian or curator, as the case may be. If the period of prescription of the claim is shorter than one year, the shorter period of time shall apply in place of the said period of one year.

Section 193/22. If prescription of claims between spouses would have expired before within one year after dissolution of marriage, it is not completed until the expiration of one year after dissolution of marriage.

Section 193/23. If prescription of a claim existing in favour of or against a deceased would have expired within one year after the date of the death, the period of prescription is not completed until the expiration of one year after death.

Section 193/24. The benefit of prescription can be waived only after it has been completed, but such waiver does not prejudice the right of third persons, or the surety.

Section 193/25. When prescription is completed, its effect relates back to the day when it began to run.

Section 193/26. With the principal claim the claims for accessory acts of performance dependent upon it are also barred by prescription, even if the particular prescription applying to the accessory claim is not yet complete.

Section 193/27. The barring of the principal claim by prescription does not prevent a mortgagee, a pledge, holder of a right of retention or a creditor who has preferential right on property of the debtor detained by him, to enforce his right out of the mortgaged, pledged or detained property. But in exercising the right the creditor cannot obtain more than five years for arrears of interest.

Section 193/28. If any act of performance is done in satisfaction of a claim barred by prescription, the value of such performance may not be demanded back, even if the performance has been effected in ignorance of the prescription.

The provisions of paragraph one shall apply to a contractual acknowledgment of liability in writing and to the giving of security by the debtor, but it cannot be referred against the former surety.

Section 193/29. When prescription has not been set up as a defense, the Court cannot dismiss the claim on the ground of prescription. 

CHAPTER II

PERIOD OF PRESCRIPTION

Section 193/30. The period of prescription for which no other period is provided by law is ten years.

Section 193/31.The period of prescription for claims of the Government for taxes and rates is ten years. As to other claims of the Government relating to obligations, the provisions of this title shall apply.

Section 193/32. The period of prescription for a claim established by a final judgment, or by a contract of compromise is ten years, even if the claim itself is subject to any period of prescription.

Section 193/33. The period of prescription is five years for the following claims:

(1) Arrears of interest
(2) Sums payable for the purpose of paying off the principal by installments.
(3) Arrears of rent or hire of property except the rent of movables under Section 193/34 (6).
(4)
Arrears of salaries, annuities, pensions, allowances for maintenance and all other periodical payments.
(5) Claims under Section 193/34 (1) (2) and (5), so far as they are not subject to the period of two years.

Section 193/34. The period of prescription is two years for the following claims:

(1) Arrears of interest
(2) Sums payable for the purpose of paying off the principal by installments.
(3) Arrears of rent or hire of property except the rent of movables under Section 193/34 (6).
(4)
Arrears of salaries, annuities, pensions, allowances for maintenance and all other periodical payments.
(5) Claims under Section 193/34 (1) (2) and (5), so far as they are not subject to the period of two years.

Section 193/34. The period of prescription is two years for the following claims:

(1)
Claims of merchants, industrialists manufactures, artisans and those who practice industrial arts, for delivery of goods, performance of work and care of others' affairs, including disbursements, unless the service was rendered for the business of the debtor.
(2)
Claims of those who engage to agriculture or forestry, for delivery of agricultural or forest products, so far as the delivery is for the domestic use of the debtor
(3)
Claims of carriers for passengers or goods, or if messengers, for fare, freight, hire and fees, including disbursements.
(4)
Claims of innkeepers or hostel keepers and those who make a business of providing food and drink, or those who make a business of rendering entertainment service according to the law on places of entertainment services, for supplying lodging and food or other services rendered to the guests, including disbursements.
(5)
Claims of those who sell lottery tickets, racket or similar tickets for the sale of the tickets, unless the tickets are delivered for further sale.
(6) Claims of those who make a business of letting movables, for the rent.
(7)
Claims of those who, without belonging to the classes specified in (1), make business of the care of others' affairs or the rendering of service, for the remuneration due to them from the business, including disbursements.
(8)
Claims of those who are in private service, for the wages, or other remuneration for services, including disbursements; also claims of the employers for advances made upon such claims.
(9)
Claims of employees, whether they be permanent, temporary or day labourers, and apprentices, for the wages or other remuneration, including disbursements, or claims of the employers for advances made upon such claims.
(10)
Claims o masters of apprentices, for the premium and other expenses agreed upon in the contract of apprenticeship and disbursements.
(11)
Claims of owners of educational institutions or nursing home, for instruction fees and other fees, or medical fees an other expenses, including disbursements.
(12)
Claims of those who receive persons to be maintained or educated, for services including disbursements.
(13)
Claims of those who receive animals to be maintained or trained, for services, including disbursements.
(14) Claims of teachers, for their fees.
(15)
Claims of practitioners in medicine , dentist, nurses, midwives, veterinary surgeons or those who practice in other related fields of medicine, for their services, including disbursements.
(16)
Claims of lawyers or those engaged in legal profession including expert witnesses for their services, including disbursements, or claims of the parties for advances made upon such claims.
(17)
Claims of engineers, architects, auditors or those engaged in other independent professions, for services including disbursements, or claims of the employers for advances made upon such claims.

Section 193 /35. Subject to Section 193/27, prescription of claims arising from the acknowledgment of liabilities by the debtor in writing or in giving of security under Section 193/28 paragraph two is two year from the date of acknowledgment of liabilities or of giving of security.

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BOOK II

OBLIGATIONS

TITLE I

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:

  1. The person who, being himself a creditor, pays another creditor who has priority to him ow ing to such other creditor having a preferential right, pledge or mortgage.
  2. When acquires an immovable property, the person who uses the purchase price in paying off the persons who have mortgages thereon.
  3. 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.

PART V
Right of Retention

Section 241. If the possessor of a property belonging to another has an obligation in his favour relating to the property possessed, he may retain the property until the obligation is performed; but this does not apply, if the obligation is not yet due.

The provisions of the forgoing paragraph do not apply, if the possession begins by an unlawful act.

Section 242. The right of retention does not exist if it is incompatible with the obligation assumed by the creditor, or with the instructions given by the debtor before or at the time of delivery of the property or if it is against public order.

Section 243. In case of insolvency of the debtor, the creditor has the right of retention even if his claim is not yet due. If the insolvency has occurred or become known to the creditor after the delivery of the property, he can exercise the right of retention even if an obligation previously assumed by him or the instruction given by the debtor, opposes it.

Section 244. The holder of a right of retention may exercise his right against the whole of the property retained until the obligation is wholly performed.

Section 245. The holder of a right of retention may take the fruits of the property retained and appropriate them to the performance of the obligation in preference to other creditors.

Such fruits must first be appropriated to the interest on the obligation, and if there is any surplus must be appropriated to the principal.

Section 246. The holder of a right of retention is bound to take such appropriate care of the property retained as might be expected from him in his situation.

The holder of a right of retention cannot use or let the property retained or give it as security, without the consent of the debtor; but this does not apply to such use as is necessary for the preservation of the property.

If the holder of a right of retention acts contrary to any provision of the foregoing paragraphs, the debtor may claim the extinction of the right.

Section 247. If the holder of a right of retention incurs necessary expenses in respect to the property retained he may require the owner to reimburse him.

Section 248. Subject to the provisions of Section 193/27, the exercise f a right of retention does not prevent the running of prescription against the obligation.

Section 249. The debtor may claim the extinction of the right of retention on giving proper security.

Section 250. A right of retention is extinguished by the loss of possession of the property; but this does not apply to the case where the property retained is let or pledged with the consent of the debtor.

PART VI
Preferential Rights

Section 251. A holder of a preferential right has, according to the provisions of this Code or other laws, a right as to the property of his debtor to receive therefrom performance of an obligation due to him in preference to other creditors.

Section 252. The provisions of Section 244 apply correspondingly to preferential rights.

1. General Preferential Rights

Section 253. A person in whose favour an obligation exist based upon any of the following grounds has a preferential right in the whole property of the debtor:

(1) Expenses for the common benefit 
(2) Funeral expenses
(3) Taxes and duties, and money to which an employee entitled for the service rendered to the debtor who is his employer.
(4) Supplies of daily necessaries.

Section 254. The preferential right on account of expenses for the common benefit is for expenses incurred for the common benefit of all the creditors in regard to preservation , liquidation or distribution of the debtor’s property.

If any such expense was not incurred for the benefit of all the creditors, the preferential right only exist against those creditors for whose benefit it was incurred.

Section 255. The preferential right on account of funeral expenses is for such funeral expenses as are accordant to the station in life of the debtor.

Section 256. The preferential right on account of taxes and rates is for all land, property or other taxes or local rates due from the debtor for the current year and the preceding year.

Section 257. The preferential right on account of money, to which an employee is entitled for services rendered to the debtor who is his employer, is for basic pay, overtime pay, holiday pay, holiday overtime pay, severance pay, special severance pay, and other money to which the employee is entitled for services rendered to, for four months back not exceeding one hundred thousand baht for each employee.

Section 258. The preferential right on account of supplies of the daily necessaries is for supplies for six months back of food, drink, light, firewood and charcoal, necessary for the living of the debtor, of members of his family, who live with him and whom he is bound to support, and of his servants.

2. Special Preferential Rights

(a) PREFERENTIAL RIGHTS IN MOVABLES

Section 259. A person in whose favour an obligation exists based upon any of the following grounds has a preferential right in particular movables of the debtor:

(1) Hiring of an immovable.
(2) Lodging in an inn.
(3) Carriage of passengers of goods.
(4) Preservation of  movables.
(5) Sale of movables.
(6) Supply of seeds, young plants or manure.
(7) Agricultural or industrial services.

Section 260. The preferential right on account of the hiring of an immovable is for the hire of the immovable and for other obligations of the hired arising from the relation of hiring, and is in the movables of the hirer which are in or on the immovable.

Section 261. The preferential right of the letter of land is in such movables as have been brought by he hirer upon the land hired or into buildings subservient to the use of such land, in such movables as are destined for the use of such land and in such fruits of the land as are in the possession of the hirer.

The preferential right of the letter or a building is in such movables as have been brought into the building by the hirer.

Section 262. If a hirer of immovable property is transferred or sublet, the preferential right of the original letter extends to the movables brought by the transferee or sub-hirer into the property. The same applies to the money which the transferor or the sub-letter is to receive from the transferee or sub-hirer.

Section 263. In case of a general liquidation of the property of the hirer, the preferential right of the letter is only for the rent and other obligations of the last preceding, the current and the next following rent period and for such damages as have arisen during the last preceding and the current rent period.

Section 264. If the letter has received security money, he has a preferential right only with regard to that part of his claim which is not covered by the security money.

Section 265. The preferential right on account of lodging in an inn is for what is due to the proprietor for lodging and other services afforded to the traveler or guest in satisfaction of his needs, including disbursements, and is in the luggage or other property of the traveler or guest which is in the inn, hotel or other such place.

Section 266. The letter of an immovable property or the proprietor of an inn, hotel or other such place may enforce his preferential right in the same manner as a pledgee. The provisions of this Code concerning Enforcement of Pledge apply mutatis mutandis.

Section 267. The preferential right on account of carriage is for charges for the carriage of a passenger or goods and for accessory expenses, and is in all goods and luggage in the hands of the carrier.

Section 268. The letter of an immovable, the proprietor of an inn, or the carrier may enforce his preferential right against movables belonging to a third person in the case contemplated in the preceding eight sections, unless he knew in due time that they belong to the third person.

If such movables have been stolen or lost the provisions of the law concerning recovery of possession shall apply.

Sections 269. The preferential right on account of the preservation of a movable is for the expense of the preservation of movable, and is in such movable.

The preferential right exists also for necessary expenses incurred for the purpose of having a right relating to a movable preserved, acknowledged or enforced.

Section 270. The preferential right on account of the sale of a movable is for the price and interest thereon, and is in such movable.

Section 271. The preferential right on account of the supply of seeds, young plants or manure is for the price of seeds, young plants or manure and interest thereon, and is in the fruits which have grown on the land for which those things have been used within one year after their use.

Section 272. The preferential right on account of agricultural and industrial services is as to the person who  rendered agricultural service for wages fro one year back, and as to a person who rendered industrial services for wages for three months back, and is in the fruits or manufactured things produced by his service.

(b) PREFERENTIAL RIGHTS IN IMMOVABLES

Section 273. A person in whose favor an obligation exists based upon any of the following grounds has a preferential right in a particular immovable of the debtor:

(1) Preservation of an immovable
(2) Work done upon an immovable
(3) Sale of an immovable

Section 274. The preferential right on account of the preservation of an immovable is for the expense of preservation of an immovable, and is in such immovable.

In case of the foregoing paragraph the provisions of Section 269 paragraph 2 apply correspondingly.

Section 275. The preferential right on account of work done upon an immovable is for charges for the work done upon an immovable of the debtor by a builder an architect or a contractor, and is in such immovable.

This preferential right exist only if there is a present increase of the value of such immovable due to such work, and is only in such increased value.

Section 276. The preferential right on account of the sale of an immovable is for the price and interest thereon, and is in such immovable.

3. Rank of Preferential Rights

Section 277. When general preferential rights conflict, the rank of their precedence is according to the order in Section 253.

When a preferential right conflicts with a special preferential right, the latter takes precedence, but the preferential rights on account of expenses for the common benefit takes precedence as against all creditors who are benefited thereby.

Section 278. When preferential rights in the same movable conflict, the rank of their precedence is as follows.

(1) The preferential right on account of the hiring of an immovable, of lodging in an inn and of carriage.
(2) The preferential right on account of the preservation of a movable, but if there are several persons entitled as preserves, a later preserves takes precedence of an earlier one.
(3) The preferential right on account of the sale of a movable, of the supply of seeds, young plants or manure, and of agriculture and industrial services.

If a person who has a preferential right of the first rank knew at the time when he acquired his obligation that other persons have preferential rights of the second or third rank, he cannot exercise his right of precedence against them. The same applies as against a person who has preserved a thing for the benefit of a person having a preferential right of the first rank.

As to fruits, a person who rendered agricultural services has the first rank, a supplier of seeds, young plants or manure the second, and the letter of the land third.

Section 279. When special preferential rights in the same immovable conflict, the rank of their precedence is according to the order in Section 273.

In successive sales have been made of the same immovable, the rank of precedence of the seller as between themselves is according to the priority of the sales.

Section 280. When several persons have preferential rights of the same rank in the same thing, each is to receive performance in proportion to the amount of his obligation.

4. Effect of Preferential rights

Section 281. A preferential right in a movable cannot be exercised after the debtor has delivered the thing to a third person who has acquired it from him.

Section 282. When a preferential right conflicts with a pledge of a movable, the pledgee has the same rights as the holder of a preferential right of the first rank mentioned in Section 278.

Section 283. A person who has a general preferential right must receive performance first out of the movable property of the debtor, and only in case that is insufficient he can receive performance out of immovables.
As to immovables, he must receive performance first out of such immovables as are not subject to a special security.

If a person who has a general preferential right negligently omits to intervene in a distribution according to the provisions of the foregoing two paragraphs, he cannot exercise his preferential right against a third person whose right is registered, to the extent of what he would have received through such intervention.

The provisions of the foregoing three paragraphs do not apply, if the proceeds of an immovable are to be distributed before those of other property, or if the proceeds of an immovable which is the subject of a special security are to be distributed before the proceeds of other immovables.

Section 284. A general preferential right, even though not registered in respect to an immovable, may be set up against any creditor who has no special security, but this does not apply against a third person who made registration.

Section 285. A preferential right on account of the preservation of an immovable retains its effect by being registered immediately after the act of preservation is completed.

Section 286. A preferential right on account of work done upon an immovable retains its effect by a provisional estimate of the cost being registered before the work has begun. If, however, the costs of the work exceeds the provisional estimate, there is no preferential  right for the excess.

The increase of value of an immovable arising from the work done upon it is to be estimated by experts appointed by the Court at the time of the intervention in the distribution.

Section 287. A preferential right registered in accordance with the provisions of the preceding two sections can be exercised in preference to a mortgage.

Section 288. A preferential right on account of the sale of an immovable retains its effect by registering at the same time with the contract of sale the fact that the price or the interest thereon has not been paid.

Section 289. As to the effect of a preferential right, in addition to provisions of Sections 281 to 288 inclusive, the provisions as to Mortgage apply correspondingly.

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CHAPTER III

PLURALITY OF DEBTORS AND CREDITORS

Section 290. If several persons owe a divisible performance, or if a divisible performance is owed to several persons, each debtor is, in case of doubt liable only for an equal share, and each creditor is entitled to an equal share.

Section 291. If several persons owe an act of performance in such manner that each is bound to effect the whole performance, though the creditor is entitled to obtain the whole performance only once (i.e. joint debtors), the creditor may demand the performance at his option from any one of the debtors, in the whole or in part. Untill the whole performance has been effected all of the debtors remain bound.

Section 292. Performance of the obligation by one joint debtors operates in favour of the other debtors. The same rule applies to any act in lieu of performance, to the deposit of lieu of performance and to set off.

A claim belonging to one of the joint debtors may not be set off by the other debtors.

Section 293. A release of the obligation granted to one of the joint debtors avails for the benefit of the other debtors only in respect of the share of the debtor who has been released unless otherwise agreed.

Section 294. The default of the creditor towards one joint debtor avails also in favour of the other debtors.

Section 295. Facts other than those specified in Sections 292 to 294 avail, unless the contrary appears from the nature of the obligation, in favour of and as against only the joint debtor to whom they particularly refer.

This applies, in particular, to the giving of notice, default, imputability of fault, impossibility of performance on the part of one joint debtor, prescription or its interruption, and merger of the claim in debt.

Section 296. As between themselves joint debtors are liable in equal shares, unless it is otherwise provided. If from one of the joint debtors the contribution due from him cannot be obtained, the deficiency shall be borne by the other debtors who are bound to make contribution; provided that one of the joint debtors has been released from joint obligation, the creditor takes upon himself that share which the debtor released by him ought to have born.

Section 297. If in a contract several persons bind themselves in common to effect a performance, they are liable, in case of doubt, as joint debtors even in the case of a divisible performance.

Section 298. If several persons are entitled to demand an act of performance in such manner that each can demand the whole performance, though the debtor is bound to effect the whole performance only once (i.e. joint creditors), the debtor may at his option perform in favour of any one of the creditors. This applies even if one of the creditors has already brought an action for the performance.

Section 299. Default on the part of one joint creditor avails also against the other creditors.

If a claim and a debt become merged in one joint creditor, the rights of the other creditors against the debtor are extinguished.

For the rest the provisions of Sections 292, 293 and 295 apply mutatis mutandis. In particular, if one joint creditor transfers his claim to another person, the rights of the other creditors remain unaffected.

Section 300. Joint creditors are, as between themselves, entitled to equal shares, unless it is otherwise provided.

Section 301. If several person owe an indivisible performance, they are liable as joint debtors.

Section 302. If an indivisible performance is owed to several persons, and if they are not joint creditors, the debtor may only perform in favour of all in common, and each creditor may only demand the performance in favour of all. Each creditor may demand that the debtor deposits the thing owed for the benefit of all the creditors, or if the thing is not suitable to be deposited, that it be consigned to a custodian appointed by the Court.

For the rest a fact which refers only to one creditor does not avail in favour of nor as against the other creditors.

CHAPTER IV

TRANSFER OF CLAIMS

Section 303. A claim may be transferred , unless its nature does not admit of it.

The provisions of the foregoing paragraph do not apply, if the parties have declared a contrary intention. Such declaration of intention, however, cannot be set up against a third person acting in good faith.

Section 304. A claim is not transferable if it is not subject to judicial attachment.

Section 305. With the transferred claim the rights of mortgage or pledge existing on its account and the rights, arising from a suretyship established for it, pass to the transferee.

The transferee may also enforce any preferential right connected with the claim in case of compulsory execution or bankruptcy.

Section 306. The transfer of an obligation performable to a specific creditor is not valid unless it is made in writing. It can be set up against the debtor or third person only if a notice thereof has been given to the debtor, or if the debtor has consented to the transfer. Such notice or consent be in writing.

The debtor is discharged if he satisfies the transferor by way of payment or otherwise before he has received notice of, or has agreed to, the transfer.

Section 307. If a right is claimed under different transfers, the first transfer notified, or agreed to, shall be preferred.

Section 308. If a debtor has given the consent mentioned in Section 306 without reservation, he cannot set up against the transferee a defense which he might have made against the transferor. If, however, in order to extinguish the obligation, the debtor has made any payment to the transferor, he may recover it, or if for such purpose he has assumed an obligation to the transferor, he may treat it as if it did not exist.

If the debtor has only received a notice of the transfer, he may set up against the transferee any defense which he had against the transferor before he recieved such notice. If the debtor had against the transferor a claim not yet due at the time of the notice, he can set off such claim provided that the same would become due not later than the claim transferred.

Section 309. The transfer of an obligation performable to order can be set up against the debtor or other third person only if the transfer is indorsed on the instrument, and the instrument itself is delivered to the transferee.

Section 310. The debtor of an obligation performable to order has the right, but is not bound, to verify the identity of the holder of the instrument or the genuineness of his signature or seal; but if the debtor acts in bad faith or with gross negligence, his performance is invalid.

Section 311. The provisions of the foregoing section apply correspondingly, if a creditor is designated in the instrument, but it is added that performance shall e made to the holder of such instrument.

Section 312. The debtor of an obligation performable to order cannot set up against any transferee in good faith defences which he might have set up against the original creditor, except such as appear on the face of the instrument or result naturally from its character.

Section 313. The provisions of the foregoing section apply correspondingly to obligations performance to bearer.

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CHAPTER V

EXTINCTION OF OBLIGATION

PART I

Performance

Section 314. Performance of an obligation may be made by any third person, unless its nature does not admit of it, or the parties concerned have declared a contrary intention.

A person who has no interest in the performance, cannot make performance against the will of the debtor.

Section 315. Performance must be made to the creditor or a person having authority to receive performance on his behalf. A performance made to a person who has no authority to receive is valid if the creditor ratifies it.

Section 316. If performance is made to the apparent possessor of an obligation, it is valid only if the person making performance acted in good faith.

Section 317. Except in the case mentioned in the foregoing section, a performance made to a person who is not entitled to receive it, is valid only to the extent to which the creditor has been enriched thereby.

Section 318. A person who holds a receipt is deemed to have a right to receive performance; but this does not apply, if the person making performance knows that such right does not exist or is ignorant thereof by reason of his negligence.

Section 319. When a third debtor who has been ordered by a Court to refrain from making performance, has made the same to his own creditor, the seizing creditor may, in so far as he has sustained damage, demand another performance from the third debtor.

The provisions of the foregoing paragraph do not prevent the third debtor from exercising the right to recourse against his own creditor.

Section 320. The creditor cannot be compelled to receive part performance or any other performance than that which due to him.

Section 321. An obligation is extinguished if the creditor accepts in lieu of performance another performance than agreed upon.

If the debtor, for the purpose of satisfying the creditor, assumes a new obligation towards him, is not to be presumed, in case of doubt, that he assumes the obligation in lieu of performance.

If performance is made by making, transferring, or endorsing a bull or warrant, the obligation is extinguished only if such bill or warrant is paid.

Section 322. If a thing, a claim against a third person or any other right is given in lieu of performance, the debtor shall be liable for defect and for eviction in the same manner as the seller.

Section 323. If the subject of an obligation is the delivery of a specific thing, the person making performance must deliver the thing in connection in which it is at the same time when delivery is to be made.

The debtor must, until he delivers it, keep the thing with such care as a person of ordinary prudence would take of his own property.

Section 324. When there is no special declaration of intention as to the place of performance, if a specific thing is to be delivered, the delivery is to be made at the place where the thing was at the time when the obligation arose; other kinds of performance must be made at the place of the creditor's present domicile.

Section 325. When there is no declaration of intention as to the expenses of performance, such expenses are to be borne by the debtor; if, however, because of the creditor's transfer of his domicile or any other act of his the expenses are increased, such increase must be borne by the creditor.

Section 326. The person making performance is entitled to a receipt from the person who receives performance, and if the performance is wholly performed, he is entitled to have the document embodying the obligation surrendered to him or cancelled. If such document is declared to be lost, he is entitled to have the extinction of the obligation mentioned in the receipt or in a separate document.

If the obligation is partly performed or if the document gives the creditor any other right, the debtor is only entitled to a receipt and to have the performance noted in the document.

Section 327. In case of interest or other periodical performance, if the creditor gives a receipt for one term without any reservation, it is presumed that he has received performance for the previous terms.

If he gives receipt for the capital, it is presumed that he has received the interest.

If the document embodying the obligation has been surrendered, it is presumed that the obligation has been extinghuised.

Section 328. If a debtor is bound to the creditor to do similar acts of performance by virtue of several obligations, and if the performance effected by him is insufficient for the discharge of all debts, that debt is discharged which he specifies on effecting the performance.

If the debtor makes no specification, then that debt which is due is first discharged; among several debts due that one is first discharged which affords the creditor least security; among several equal secured debts the one most burdensome to the debtor; among several equally burdensome debts the oldest debt; and where several are equally old every debt proportionately.

Section 329. If the debtor, besides the principal performance, has to pay interest and costs, the value of an act of performance sufficient to discharge the whole debt is applied first to the costs, then to the interest, and lastly to the principal performance.

Section 330. By proper tender of performance a discharge is effected, from the time of the tender, from all responsibilities arising out of non-performance.

Section 331. If the creditor refuses or is unable to accept performance, the person performing may be discharged from the obligation by depositing for the creditor's benefit the thing forming the subject of the obligation. The same applies, if the person performing without fault on his part, cannot ascertain the right or identity of the creditor.

Section 332. If the debtor is bound to perform only after the counter-performance has been effected by the creditor, he may make the right of the creditor to receive the thing deposited dependent upon counter-performance by the creditor.

Section 333. A deposit must be made to the deposit office or the place where the obligation is to be performed.

If there are no special provisions by law or regulations as to the deposit offices, the Court must, on application of the person performing, designate a deposit office and appoint a custodian of the thing deposited.

The depositor must without delay give notice of the deposit to the creditor.

Section 334. The debtor has the right to withdraw the thing deposited. If he withdraws it, the deposit is deemed never to have been made.

The right of withdrawal is barred:

(1) If the debtor declares to the deposit office that he waives his right of withdrawal.

(2) If the creditor declares his acceptance to the deposit office.

(3) If the deposit has been ordered or confirmed by the Court and the fact is notified to the deposit office.

Section 335. The right of withdrawal is not subject to judicial attachment.

If bankruptcy proceedings are instituted against the property of the debtor, the right of withdrawal cannot be exercised during the bankruptcy proceedings.

Section 336. If the thing forming the subject of performance is not suitable for deposit, or if in regard to the thing there is an apprehension that it may perish or be destroyed or damaged, the person performing may, with the permission of the Court, sell it at auction and deposit the proceeds. The same applies, if the keeping of the thing would be unreasonably expensive.

Section 337. The auction is not permissible until after the creditor has been warned of it. The warning may be dispensed with if the thing is liable to deterioration, and there is danger in delaying the auction.

The debtor shall without delay notify the creditor of the auction; if the debtor fails to do so, he is liable for compensation.

The warning and the notice may be dispensed with if they are impracticable.

The time and place of the auction, with a general description of the thing, shall be publicly advertised.

Section 338. The cost of the deposit or of the auction shall be borne by the creditor, unless the deposit be withdrawn by the debtor.

Section 339. The right of the creditor to the deposit is extinguished after the lapse of ten years since receipt of notice of the deposit.

After the right of the creditor is extinguished the debtor is entitled to withdraw even if he has waived the right of withdrawal.

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PART II

Release

Section 340. If the creditor declares to the debtor an intention to release the obligation, it is extinguished.

When an obligation has been evidenced by writing, the release must also be in writing or the document embodying the obligation be surrendered to the debtor or cancelled.

PART III

Set-off

Section 341. If two persons are bound to each other by obligations whose subject is of the same kind and both of which are due, either debtor may be discharged from his obligation by set-off to the extent to which the amounts of the obligations correspond, unless the nature of one of the obligations does not admit of it.

The provisions of the foregoing paragraph do not apply, if the parties have declared a contrary intention; but such intention cannot be set up against a third person acting in good faith.

Section 342. Set-off is made by a declaration of intention by one party to another. A condition or time commencement or ending cannot be added to such declaration.

The declaration of intention mentioned in the foregoing paragraph relates back in its effect to the time when both obligations could first have been set-off.

Section 343. A set-off may be made even though the place of performance of the two obligations is different; but the party who makes the set-off must indemnify the other party for any damage caused thereby.

Section 344. A claim against which there is a defense may not be set-off. Prescription does not exclude set-off, if the claim barred by prescription was not barred at the time at which it could have been set-off against the other claim.

Section 345. If an obligation arises from an unlawful act, the debtor cannot avail himself of a set-off against the creditor.

Section 346. If a claim is not subject to judicial attachment, it is not subject to set-off.

Section 347. A third debtor who has received from the Court an order of prohibition of payment cannot set up against the seizing creditor an obligation subsequently acquired by him.

Section 348. If either party has several claims suitable for set-off, the party making the set-off may specify the claims which are to be set-off against each other. If the set-off is declared without such specification, or if the other party objects without delay, provisions of Section 328 paragraph 2 apply mutatis mutandis.

If the party making the set-off owes the other party interest and costs in addition to the principal performance, the provisions of Section 329 apply mutatis mutandis.

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PART IV

Novation

Section 349. When the parties concerned have concluded a contract changing the essential elements of an obligation, such obligation is extinguished by novation.

If a conditional obligation is made unconditional, or a condition is added to an unconditional obligation, or if a condition is changed, it is regarded as a change of an essential element of such obligation.

A novation by a change of the creditor is governed by the provisions of this Code concerning transfer of claims.

Section 350. A novation by a change of the debtor may be effected by a contract between the creditor and the new debtor, but this cannot be done against the will of the original debtor.

Section 351. If the obligation resulting from a novation does not come into existence, or is annulled, because of an illegality in its ground or because of some reason unknown to the parties, the original obligation is not extinhuishe.

Section 352. The parties to a novation may, to the extent of the subject of the original obligation, transfer a right of pledge or mortgage given as security for it to the new obligation; but if such security was given by a third person, his consent is necessary.

PART V

Merger

Section 353. If rights and liabilities in an obligation become vested in the same person, the obligation is extinguished, except when it has become the subject of the right of a third person, or when a bill has been re-indorsed according Section 917 paragraph 3.

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TITLE II

CONTRACT

CHAPTER I

FORMATION OF CONTRACT

Section 354. An offer to make a contract in which a period for acceptance is specified cannot be withdrawn within such period.

Section 355. A person who, without specifying a period for acceptance, makes an offer to another at a distance cannot withdraw his offer within a time which notice of acceptance might reasonably be expected.

Section 356. An offer made to a person who is present without specifying a period for acceptance may be accepted only there and then. This applies also to an offer made by one person to another on the telephone.

Section 357. An offer ceases to be binding if it is refused to the offeror, or if it is not accepted in due time according to the three foregoing sections.

Section 358. If the notice of acceptance arrives out of time, but it is apparent that it was sent in such manner that in the ordinary course of things it ought to have arrived in due time, the offeror, unless he has already done so, must without delay give notice to the other party of the delayed arrival.

If the offeror fails to give notice mentioned in the foregoing paragraph, the notice of the acceptance is deemed not to have been out of time.

Section 359. If the acceptance of an offer arrives out of time, it is deemed to be a new offer.

An acceptance with additions, restrictions or other modifications is deemed to be a refusal coupled with a new offer.

Section 360. The provisions of Section 169 paragraph 2 do not apply, if the offeror has declared a contrary intention, or if before accepting the other party had notice of the fact of his death or loss of capacity.

Section 361. A contract between persons at a distance comes into existence at the time when the notice of acceptance reaches the offeror.

In accordance to the declared intention of the offeror or to ordinary usage no notice of acceptance is necessary, the contract comes into existence at the time of the occurrence of fact which is considered as a declaration to accept.

Section 362. A person who by advertisement promises that he will give a reward to whoever shall de a certain act is bound to give such reward to any person who does the act, even if such person did not act with a view to the reward.

Section 363. In the case of the foregoing section the promisor may so long as there is no person who has completed the specific act, withdraw his promise by the same means which used for advertising, unless he declared in the advertisement that he would not withdraw it.

If a promise cannot be withdrawn by the means of the aforesaid, withdraw may be made by other means, but in such case it is valid only against those persons who know of it.

If the promisor has fixed a period within which the specified act must be done, he is presumed to have renounced his right of withdrawal.

Section 364. If there are several persons who have done the act specified in the advertisement, only that one who does it first has a right to receive an equal share of the reward.

If several persons do such act at the same time, each one has a right to receive an equal share of the reward. But if the reward is in its nature indivisible, or if by the terms of the promise only one person is to receive the reward, it is decided by lot.

The provisions of the foregoing two paragraphs do not apply, if in the advertisement a different intention is declared.

Section 365. A promise of reward which has a prize competition is valid only if a period of time is fixed in the advertisement.

The decision whether any competitor fulfils the conditions of the promise within the period, or which one among several competitors deserves the preference, shall be made by the umpire named in the advertisement, or in the absence of any such, by the promisor of the reward. The decision is binding upon the parties concerned.

In case of equality of merit the provisions of Section 364 paragraph 3 apply correspondingly.

The transfer of ownership of the thing produced may be demanded by the promisor only of he has specified in the advertisement that such transfer shall be made.

Section 366. So long as the parties have not agreed upon all points of a contract upon which, according to the declaration of even one party, agreement is essential, the contract is, in case of doubt, not concluded. An understanding concerning particular points is not binding, even if they have been noted down.

If it is agreed that the contemplated contract shall be put into writing, in case of doubt, the contract is not concluded until it is put in writing.

Section 367. If the parties to a contract, which they regarded as concluded, have in fact not agreed as to one point upon which an agreement was to be settled, those parts which were agreed upon are valid in so far as it may be inferred that the contract would have been concluded even without a settlement of this point.

Section 368. Contracts shall be interpreted according to the requirements of good faith, ordinary usage being taken into consideration. 

CHAPTER II

EFFECT OF CONTRACT

Section 369. A party to a reciprocal contract may refuse to perform his obligation until the other party performs or tenders performance of his obligation. But this does not apply, if the other party's obligation is not yet due.

Section 370. If the object of a reciprocal contract is the creation or transfer of a real right in a specific thing, and such thing is lost or damaged by a cause which is not attributable to the debtor, the loss or damage fails upon the creditor.

To a non-specific thing the provisions of the foregoing paragraph apply from the time when the thing has become specific in accordance with the provisions of Section 195 paragraph 2.

Section 371. The provision of the foregoing section do not apply, if the thing which forms the subject of a reciprocal contra depending upon a condition precedent is lost or destroyed while the condition is pending.

If the thing is damaged by a cause not attributable to the creditor, the latter, when the condition is fulfilled, may at his option either demand performance with reduction of his counter performance or rescind the contract, provided that in the case where the cause of the damage is attributable to the debtor, the creditor's right to compensate is not affected thereby.

Section 372. Except in the cases mentioned in the two foregoing sections, if an obligation becomes impossible of performance by a cause not attributable to either party, the debtor has no right to receive the counter performance.

If performance becomes impossible by a cause attributable to the creditor, the debtor does not lose his right to the counter performance. He must however, deduct what he saves in consequence of release from the performance, or what he acquires or maliciously omits to acquire by a different application of his faculties. The same rule applies in the performance due from one party becomes impossible, in consequence of a circumstance for which he is not responsible, at the time when the other party is in default to acceptance.

Section 373. An agreement made in advance exonerating a debtor from his own fraud or gross negligence is void.

Section 374. If a party by a contract agrees to make a performance to a third person, the latter has a right to claim such performance directly from the debtor.

In the case of the foregoing paragraph the right of the third person comes into existence at the time when he declares to the debtor his intention to take the benefit of the contract.

Section 375. After the right of the third person has come into existence in accordance with the provisions of the foregoing section, it cannot be charged or extinguished by the parties to the contract.

Section 378. Defences arising from the contract mentioned in Section 374 can be set up by the debtor against the third person who receive the benefit of the contract. 

CHAPTER III

EARNEST AND STIPULATED PENALTY

Section 377. If, on entering into a contract, something is given as earnest, this is deemed to be proof of the conclusion of the contract. I also serves as a security that the contract shall be performed.

Section 378. In the absence of agreement to the contrary, earnest is:

(1) To be returned or treated as part-payment upon performance
(2) To be forfeited, if the party giving it fails to perform, or if the performance becomes impossible in consequence of the circumstance for which he is responsible or if the rescission of the contract is due to his fault.
(3) To be returned, if the party receiving it fails to perform, or, if the performance becomes impossible in consequence of a circumstance for which he is responsible.

Section 379. If the debtor promises the creditor the payment of a sum of money as penalty in case he does not perform it in the proper manner, the penalty is forfeited if he is in default. If the performance due consist in a forbearance, the penalty is forfeited as soon as any act in contravention of the obligation is committed.

Section 380. If the debtor has promised the penalty for the case of his not performing his obligation, his creditor may demand the forfeited penalty in lieu of performance. If the creditor declares to the debtor that he demands the penalty, the claim for performance is barred.

If the creditor has a claim for compensation for non-performance, he may demand the forfeited penalty as the minimum amount of the damage. Proof of further damage is admissible.

Section 381. If the debtor has promised the penalty for the case of his not performing the obligation in the proper manner, such as, not at the fixed time, the creditor may demand the forfeited penalty in addition to the performance.

If the creditor has a claim for compensation on account of improper performance, the Section 380 paragraph 2 apply.

If the creditor accepts the performance he may demand the penalty only if on acceptance he reserves the right to do so.

Section 382. If another performance than the payment of a sum of money is promised as penalty, the provisions of Sections 379 to 381 apply; the claim for compensation is barred if the creditor demands the penalty.

Section 383. If a forfeited penalty is disproportionately high, it may be reduced to a reasonable amount by the Court. In determination of reasonableness every legitimate interest of the creditor, not merely his property interest, shall be taken into consideration. After payment of the penalty the claim for reduction is barred.

The same rule applies also, apart from the cases provided for by Sections 379 and 382, if a person promises a penalty for the case of his doing or forbearing to do some act.

Section 384. If the promises performance is invalid, an agreement made for a penalty for non-performance of the promise is also invalid, even if the parties knew of the invalidity of the promise.

Section 385. If the debtor contests the forfeiture of the penalty on the ground of having performed his obligation, he must prove the performance, unless the performance due from him consisted in a forbearance. 

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CHAPTER IV

RESCISSION OF CONTRACT

Section 386. If by contract or by the provisions of law one party has the right of rescission, such rescission is made by a declaration of intention to the other party.

The declaration of intention in the foregoing paragraph cannot be revoked.

Section 387. If one part does not perform the obligation, the other party may fix a reasonable period and notify him to perform within that period. If he does not perform within that period, the other party may rescind the contract.

Section 388. If the object of a contract according to its nature or to an intention declared by the parties can be accomplished only by performance at a fixed time or within a fixed period, and such time or period has passed without one of the parties having performed, the other party may rescind the contract without the notification mentioned in the foregoing section.

Section 389. If performance becomes wholly or party impossible by a cause attributable to the debtor, the creditor may rescind the contract.

Section 390. If in a contract there are several persons on the one or the other side, the right of rescission may be exercised only by all and against all. If the right of rescission is extinguished in respect of one of those persons entitled, also in respect of the others.

Section 391. If one party has exercised his right of rescission, each party is bound to restore the other to his former condition; but the rights of third persons cannot be impaired.

To money which is to be repaid in the case of the foregoing paragraph interest is to be paid from the time when it was received.

For services rendered and for allowing the use of a thing the restitution shall be made by paying the value, or, if in the contract a counter-payment in money is stipulated for, this shall be paid.

The exercise of the right of rescission does not affect a claim for damages.

Section 392. The obligations of the parties resulting from rescission shall be performed according to the provisions of Section 369.

Section 393. If no period is fixed for the exercise of the right of rescission, the other party may fix a reasonable period and notify the party having a right of rescission to declare within such period whether he will rescind or not. If notice of rescission is not received within such period, the right of rescission is extinguished.

Section 394. The right of rescission is extinguished when the person entitled has, by his own act or fault, essentially damaged the thing which is the subject of a contract or has rendered the restitution thereof impossible or has charged into a thing of a different kind by working it up or remodeling it.

If without the act or fault of the person who has the right of rescission the thing which is the subject of the contract of the contract has been lost or damaged, the right of rescission is not extinguished. 

TITLE III

MANAGEMENT OF AFFAIRS WITHOUT MANDATE

Section 395. A person who takes charge of an affair for another without having received mandate from him or being otherwise entitled to do so in respect of him, shall manage the affair in such manner as the interest of the principal requires, having regard to his actual or presumptive wishes.

Section 396. If the undertaking of the management of the affair is opposed to the actual or presumptive wishes of the principal, and if the manager must have recognized this, he is bound to compensate the principal for any damages arising from his management of the affair, even if no fault otherwise imputable to him.

Section 397. The fact that the management of the affair is opposed to the wishes of the principal is not taken into consideration if, without the management of the affair, a duty of the principal the fulfillment of which is of public interest or a legal duty to furnish maintenance to others by the principal would not be fulfilled in due time.

Section 398. If the management of the affair has for its object the averting of an imminent danger which threatens the person, reputation or property of the principal, the manager is responsible only for willful default and gross negligence.

Section 399. The manager shall notify to the principal, as soon as practicable, the undertaking of the management of the affair, and await his decision, unless there is danger in delay. For the rest the provisions of Sections 809 to 811 applicable to an agent apply mutatis mutandis to the obligation of the manager.

Section 400. If the manager is incapacitated, he is responsible only under the provisions relating to compensation for wrongful acts, and relating tot the return for undue enrichment.

Section 401. If the undertaking of management of the affair is in accordance with the interest and the actual or presumptive wishes of the principal, the manager may demand reimbursement of his outlay as an agent. The provisions of Section 816 paragraph 2 apply mutatis mutandis.

In the case provided for by Section 397 this claim belongs to the manager even if the undertaking of the management of the affair is opposed to the wishes of the principal.

Section 402. If the conditions of the foregoing section do not exist, the principal is bound to return to the manager all that he acquires through the management of the affair under the provisions relating to the return for undue enrichment.

If the principal ratifies the management of the affair, the provisions of this Code concerning Agency apply mutatis mutandis.

Section 403. The manager has no claim if he had not the intention to demand reimbursement from the principal.

If parents or grandparents furnish maintenance to their descendants, or vice versa, it is to be presumed, in case of doubt, that there is no intention to demand reimbursement from the recipient.

Section 404. If the manager acts for one person, believing that he is acting for another person, only the former has the right and duties arising out of the management.

Section 405. The provisions of the ten foregoing sections do not apply, if a person takes charge of the affair of another in the belief that it is his own.

If a person treats the affair of another as his own, although knowing that he is not entitled to do so, the principal may enforce the claims based on Sections 395, 396, 399 and 400. If he does enforce them, he is liable to the manager as provided for in Section 402 paragraph 1.

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TITLE IV

UNDUE ENRICHMENT

Section 406. Any person who, through an act of performance made by another person or in any other manner, obtains something to the prejudice of such other person without legal ground, must return it to the latter. The acknowledgment of the existence or non-existence of a debt is deemed to be an act of performance.

The same provision shall apply if something has been obtained on account of a cause which has not been realized or of a ceased to exist.

Section 407. A person who has freely done an act as if in performance of an obligation, knowing that he was not bound to effect the performance, is not entitled to restitution.

Section 408. The following persons are not entitled to restitution:

A person who performs an obligation subject to a time clause before the time has arrived
A person who performs an obligation which has been barred by prescription
A person who performs an obligation in compliance with a moral duty or with the requirements of social propriety.

Section 409. When a person who is not a debtor has performed an obligation by mistake and the creditor, in consequence thereof, has in good faith destroyed or obliterated the documentary evidence of the obligation or given up any security or lost his right by prescription, the creditor is not bound to make restitution.

The provisions of the foregoing paragraph do not prevent the person who has performed from exercising a right of recourse against the debtor and his surety, if any

Section 410. A person who had made a performance for an intended result which is not produced is not entitled to restitution, if, from the beginning, it was known to him that the production of the result was impossible or if he was prevented the result in violation of good faith.

Section 411. A person who has made an act of performance, the purpose of which is contrary to legal prohibition or good morals, cannot claim restitution.

Section 412. If the property which was unduly received is a sum of money, restitution must be made in full, unless the person who received it was in good faith in which case he is only bound to return such part of his enrichment as still exists at the time when restitution is demanded.

Section 413. When the property which must be returned is other than a sum of money and the person who received it was in good faith, such person is only bound to return it in such condition as it is and is not responsible for less or damage to such thing, but he must return whatever he has acquired as compensation for such loss or damage. If the person who received the property was in bad faith he is fully responsible for the loss or damage even caused by force majeur, unless he proves that the loss or damage would have happened in any case.

Section 414. If restitution is impossible on account of the nature of the property received or for any other reason, and the person who received the property was in good faith, such person is bound only to return such part of his enrichment as still exists at the time when restitution is demanded.

If a person who received the property was in bad faith, he is bound to pay the full value of the property.

Section 415. A person who has received the property in good faith acquires the fruits thereon as long as such good faith continues.

In case where he has to return such thing, he is deemed to be in bad faith from the time when restitution is demanded.

Section 416. Expenses which were necessary for the preservation of the property or for its maintenance or repair must be reimbursed in full to the person who returns such property.

However such person cannot claim reimbursement of the ordinary expenses for maintenance, repairs or charges made within the ime during which he has acquired the fruits.

Section 417. For expenses other than those provided in paragraph 1 of the foregoing section the person who returns the property can claim reimbursement only if they were made while he was in good faith and if the value of the property is increased by such expenses at the time of restitution, and only to the extent of such increase.

The provisions of Section 415 paragraph 2 apply correspondingly.

Section 418. If the person who has in bad faith unduly received a property has made alternations in, or additions to it, he must return the property after having put it in its former condition at his own expense, unless the owner of the property chooses to have it returned in its present condition, in which case the owner must pay at his option either the cost of alterations or additions, or a sum representing the increased value of the property.

When restitution is to be made, if it is impossible to put it in its former condition or the property would be damaged thereby, the person who received the property must return it in such condition as it is and he is not entitled to compensation for any increase of value accruing to the property from such alterations or additions.

Section 419. No action on account of undue enrichment can be entered later than one year from the time when the injured party became aware of his right to restitution or later than 10 years from the time when the right accrued.

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TITLE V

WRONGFUL ACTS

CHAPTER I

LIABILITY FOR WRONGFUL ACTS

Section 420. A person who, willfully or negligently, unlawfully injures the life, body, health, liberty, property or any right of another person, is said to commit a wrongful act and is bound to make compensation therefore.

Section 421. The exercise of a right which can only have the purpose of causing injury to another person is unlawful.

Section 422. If damage results from an infringement of a statutory provision intended for the protection of others, the person who so infringes is presumed to be in fault.

Section 423. A person who, contrary to the truth, asserts or circulates as a fact that which injurious to the reputation or the credit of another or his earnings or prosperity in any other manner, shall compensate the other for any damage arising therefrom, even if he does not know of its untruth, provided he ought to know it.

A person who makes a communication the untruth of which is unknown to him, does not thereby render himself liable to make compensation, if he or the receiver of the communication has a rightful interest in it.

Section 424. The Court, when given judgment as to the liability for wrongful act and the amount of compensation, shall not be bound by the provisions of the criminal law concerning liability to punishment or by the conviction or non-conviction of the wrongdoer for a criminal offence.

Section 425. An employer is jointly liable with his employee for the consequences of a wrongful act committed by such an employee in the course of his employment.

Section 426. The employer who has made compensation to a third person for a wrongful act committed by his employee is entitled to reimbursement from such employee.

Section 427. The two foregoing sections shall apply mutatis mutandis to principal and agent.

Section 428. An employer is not liable for damage done by the contractor to a third person in the course of the work, unless the employer was at fault in regard to the word ordered or to his instructions or to the selection of the contractor.

Section 429. A person, even though incapacitated, on account of minority or unsoundness of mind is liable for the consequences of his wrongful act. The parents of such person are, or his guardian is, jointly liable with him, unless they or he can prove that proper care in performing their or his duty of supervision has been extended.

Section 430. A teacher, employer or other person who undertakes the supervision of an incapacitated person either permanently or temporarily, is jointly liable with such person for any wrongful act committed by the latter whilst under his supervision, provided that it can be proved that he has not exercised proper care.

Section 431. In case falling under the two forgoing sections the provisions of Section 426 apply mutatis mutandis.

Section 432. If several persons by a joint wrongful act cause damage to another person, they are jointly bound to make compensation for the damage. The same applies if, among several joint doers of an act, the one who caused the damage cannot be ascertained.

Persons who instigate or assist in a wrongful act are deemed to be joint actors.

As between themselves the persons jointly bound to make compensation are liable in equal shares unless, under the circumstances, the Court otherwise decides.

Section 433. If damage is caused by an animal, the owner, or the person who undertakes to keep the animal on behalf of the owner, is bound to compensate the injured party for any damage arising therefrom, unless he can prove that he has exercised proper care in keeping it according to its species and nature or other circumstances, or that the damage would have been occasioned notwithstanding the exercise of such care.

The person responsible under the foregoing paragraph may exercise a right of recourse against the person who has wrongfully excited or provoked the animal or against the owner of another animal which has caused the excitement or provocation.

Section 434. If damage is caused by reason of the defective construction or insufficient maintenance of a building or other structure, the possessor of such building or structure is bound to make compensation, but if the possessor has used proper care to prevent the happening of the damage, the owner is bound to make compensation.

The provisions of the foregoing paragraph apply correspondingly to defects in the planting or propping of trees or bamboos.

If in cases of the foregoing two paragraphs there is also some other person who is responsible for the cause of the damage, the possessor or owner may exercise a right of recourse against such person.

Section 435. A person who is threatened with an injury from a building or other structure belonging to another is entitled to require the latter to make necessary measures for averting the danger.

Section 436. An occupier of a building is responsible for damage arising from things which fall from it or are thrown into an improper place.

Section 437. A person is responsible for injury caused by any conveyance propelled by mechanism which is in his possession or control, unless he proves that the injury results from force majeure or fault of the injured person.

The same applies to the person who has in his possession things dangerous by nature of destination or on account of their mechanical action.

CHAPTER II

COMPENSATION FOR WRONGFUL ACTS

Section 438. The Court shall determine the manner and the extent of the compensation according to the circumstances and the gravity of the wrongful act.

Compensation may include restitution of the property of which the injured person has been wrongfully deprived or its value as well as damages for any injury caused.

Section 439. A person who is bound to return a thing of which he has deprived another by a wrongful act is also responsible for the accidental destruction of the thing, or for accidental impossibility of returning it arising from any other cause, or for its accidental deterioration, unless destruction or the impossibility of returning it or the deterioration would have happened even if the wrongful act had not been committed.

Section 440. If on account of the taking of a thing its value, or, on account of damage to a thing, its diminution in value is to be made good, the injured party may demand interest on the amount to be made good from the time which serves as the basis for the estimate of the value.

Section 441. If a person bound to make compensation for any damage on account of the taking or damaging of a movable compensates the person whose possession the thing was at the time of taking or damage, he is discharged by so doing even if a third party was the owner of the thing, or had some other right in the thing, unless the right of the third party is known to him or remains unknown in consequence of gross negligence.

Section 442. If any fault of the injured party has contributed in causing the injury, the provisions of Section 223 shall apply mutatis mutandis.

Section 443. In the cause of casing death, compensation shall include funeral and other necessary expenses.

If death did not ensue immediately, compensation shall include in particular expenses for medical treatment and damages for the loss of earning on account of disability to work.

If on account of the death any person has been deprived of his legal support, he is entitled to compensation therefore.

Section 444. In the case of an injury to the body or health, the injured person is entitled to receive reimbursement of his expenses and damages for total or partial disability to work, for the present as well as for the future.

If at the time of giving judgment it is impossible to ascertain the actual consequences of the injury, the Court may reserve in the judgment the right to revise such judgment for a period not exceeding two years.

Section 445. In the case of causing death, or of causing injury to the body or health of another, or in the case of deprivation of liberty, if the injured person was bound by law to perform service in favour of a third person in his household or industry, the person bound to make compensation shall compensate the third person for the loss of such service.

Section 446. In the case of injury to the body or health of another, or in the case of deprivation of liberty, the injured person may also claim compensation for the damage which is not pecuniary loss. The claim is not transferable, and does not pass to the heirs, unless it has been acknowledged by contract, or on action on it has been commenced.

Section 447. Against a person who has injured the reputation of another, the Court may, on the application of the injured person, or order proper measures to be taken for the rehabilitation of the latter's reputation, instead of, or together with, compensation damages.

Section 448. The claim for damages arising from wrongful act is barred by prescription after one year from the day when the wrongful act and the person bound to make compensation became known to the injured person, or ten years from the day when the wrongful act was committed.

However if the damages are claimed on account of an act punishable under the criminal law for which a longer prescription is provided such longer prescription shall apply. 

CHAPTER III

JUSTIFIABLE ACTS

Section 449. A person who, acting in lawful defence or under a lawful command, has caused injury to any other person is not liable to make compensation.

The injured person can claim compensation from the person against whom the lawful defence was directed, or from the person who wrongfully gave the command, as the case may be.

Section 450. If a person damages or destroys a thing in order to avert an immediate common danger, he is not liable to make compensation, provided the damage done is not out of proportion to the danger.

If a person damages or destroys a things in order to avert an immediate individual danger, he shall make restitution therefore.

If a person damages or destroys a thing in order to protect the rights of himself or of a third person against immediate danger threatened by the thing itself, such person is not liable to make compensation, provided the damage done is not out of proportion to the danger. If the danger was caused by such person's fault he is liable to make compensation.

Section 451. A person who uses force for protecting his right is not liable to make compensation if under the circumstances the help the Court or of the proper authorities is not obtainable in due time and there is danger that, if he does not act immediately, the realization of his right will be frustrated or seriously impeded.

The using of force according to the foregoing paragraph must be strictly limited to that which is necessary for adverting the danger.

If any person does the act specified in the first paragraph under the erroneous assumption that the necessary conditions exist to render his act lawful, he is liable to make compensation to the other person, even if the error was not due to his negligence.

Section 452. A possessor of an immovable property is entitled to seize animals belonging to another person which cause injury on such property and retain them as security fro any compensation which may be due to him, he is even entitled to kill them if it is necessary under the circumstances.

However he must give notice without delay to the owner of the animals. If the owner could not be found the person seizing must take proper measures to seek him out.

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BOOK III

SPECIFIC CONTRACTS

TITLE I

SALE

CHAPTER I

NATURE AND ESSENTIALS OF THE CONTRACT OF SALE

PART I

General Provisions


Section 453. Sale is a contract whereby a person, called the seller, transfers to another person, called the buyer, the ownership of property, and the buyer agrees to pay to the seller a price for it.

Section 454. A previous promise of sale made by one party has the effect of a sale only when the other party has given notice of his intention to complete the sale and such notice has reached the person who made the promise.
If no time has been fixed in the promise for such notification, the person who made the promise may fix a reasonable time and notify the other party to give a definite answer within that time whether he will complete the sale or not. If within that time he does not give a definite answer, the previous promise loses its effect.

Section 455. The time of the completion of the contract of sale is referred to hereafter as the time of sale.

Section 456. A sale of immovable property is void unless it is made in writing and registered by the competent official. The same rule applies to ships or vessels of six tons and over, to steam launches or motor boats of five tons and over, to floating houses and to beasts of burden.

An agreement to sell or to buy any of the aforesaid property, or a promise of sale of such property is not enforceable by action unless there is some written evidence signed by the party liable or unless earnest is given, or there is part performance.

The provisions of the foregoing paragraph shall apply to a contract of sale of movable property where the agreed price is five hundred baht or upwards.

Section 457. The costs of a contract of sale are borne by both parties equally. 

PART II

Transfer of Ownership

Section 458. The ownership of the property sold is transferred to the buyer from the moment when the contract of sale is entered into.

Section 459. If a contract of sale is subject to a condition or to a time clause', the ownership of the property is not transferred until the condition is fulfilled, or the time has arrived.

Section 460. In case of sale of unascertained property, the ownership is not transferred until the property has been numbered, counted, weighed, measured or selected, or its identity has been otherwise rendered certain.

In case of sale of specific property, if the seller is bound to count, weigh, measure or do some other act or thing with reference to the property for the purpose of ascertaining the price, the ownership is not transferred to the buyer until such act or thing be done. 

CHAPTER 11

DUTIES AND LIABILITIES OF THE SELLER

PART I

Delivery

Section 461. The seller is bound to deliver to the buyer the property sold.

Section 462. Delivery may be made by doing anything which has the effect of putting the property at the disposal of the buyer.

Section 463. If the contract provides that the property sold shall be sent from one place to another, delivery takes place at the moment when the property is delivered to the carrier.

Section 464. The costs of transportation of the property sold to a place other than the place of performance are to be borne by the buyer.

Section 465. In a sale of movable property:

(1) Where the seller delivers the property less than he contracted for, the buyer may reject it; but if the buyer accepts it, he must pay the proportionate price.
(2) Where the seller delivers the property more than he contracted for, the buyer may accept the property according to the contract and reject the rest, or he may reject the whole. If the buyer accepts the whole of the property so delivered, he must pay the proportionate price.

(3)

Where the seller delivers the property he contracted for mixed with the property of a different description not included in the contract, the buyer may accept the property according to the contract and reject the rest, or he may reject the whole.

Section 466. In a sale of immovable property where the total area is specified and the seller delivers the property less or more than he contracted for, the buyer has the option either to reject or accept it and pay the proportionate price.

If the deficiency or excess does not exceed five per cent of the total area so specified the buyer is bound to accept it and pay the proportionate price, provided that the buyer can rescind the contract if the deficiency or excess is such that had he known of it he would not have entered into the contract.

Section 467. No action for liability on account of deficiency or excess can be entered later than one year after delivery.

Section 468. When there is no time clause for payment of the price, the seller is entitled to retain the property sold until the price is paid.

Section 469. Even though there is a time clause for payment, if the buyer becomes bankrupt before delivery, or was bankrupt at the time of sale without the knowledge of the seller, or impairs or reduces security given for payment, the seller is entitled to retain the property sold, unless the buyer gives proper security.

Section 470. When the buyer is in default, the seller who retains the property under the foregoing sections can, instead of using the ordinary remedies for non-performance, notify the buyer in writing to pay the price and incidental charges, within a reasonable time to be fixed in the notice.

If the buyer fails to comply with the notice, the seller can sell the property by public auction.

Section 471. The seller shall deduct from the net proceeds of the public auction what is due to him for the price and incidental charges and deliver forthwith any surplus to the buyer. 

PART II

Liability for Defect

Section 472. In case of any defect in the property sold which impairs either its value or its fitness for ordinary purposes, or for the purposes of the contract, the seller is liable.

The foregoing provision applies whether the seller knew or did not know of the existence of the defect.

Section 473. The seller is not liable in the following cases:

(1)
If the buyer knew of the defect at the time of sale, or would have known of it if he had exercised such care as might be expected from a person of ordinary prudence.
(2)
If the defect was apparent at the time of the delivery, and the buyer accepts the property without reservation.
(3) If the property was ;old by public auction.

Section 474. No action for liability for defect can be entered later than one year after the discovery of the defect. 

PART III

Liability for Eviction

Section 475. The seller is liable for the consequences of any disturbance caused to the peaceful possession of the buyer by any person having over the property sold a right existing at the time of sale or by the fault of the seller.

Section 476. The seller is not liable for a disturbance caused by a person whose rights were known to the buyer at the time of sale.

Section 477. In any case of disturbance where an action arises between the buyer and a third person, the buyer is entitled to summon the seller to appear in the action to be joint defendant or joint plaintiff with the buyer, in order to enable the Court to settle disputes between all the parties to them in one action.

Section 478. The seller is also entitled, if he thinks proper, to intervene in the action in order to deny the claim of the third person.

Section 479. The seller is liable if, by reason of eviction, the buyer is deprived of the whole or part of the property sold or if the property is subject to a right, the existence of which impairs its value, fitness, use or benefit and of which the buyer had no knowledge at the time of sale.

Section 480. If an immovable property is declared to be subject to a servitude established by law, the seller is not liable unless he has expressly guaranteed that the property was free from servitudes, or from that particular servitude.

Section 481. If the seller was not a party to the original action, or if the buyer has made a compromise with the third person, or has yielded to his claim, no action for liability on account of eviction can be entered later than three months after final judgment in the original action, or after the date of the compromise, or of the yielding to the third person.

Section 482. The seller is not liable for eviction in the following cases:

(1) If no action was entered, and the seller proves that the rights of the buyer were lost on account of the fault of the buyer, or
(2) If the buyer did not summon the seller to appear in the action, and the seller proves that he would have succeeded in the action if summoned to appear, or
(3) If the seller appeared in the action, but the claim of the buyer was dismissed on
account of the fault of the buyer.

In any case the seller is liable whenever he is summoned to appear in the action and refuses
to take the part of the buyer as joint defendant or joint plaintiff. 

PART IV

Clause for Non-Liability

Section 483. The parties to a contract of sale may agree that the seller shall not incur any liability for defects or eviction.

Section 484. Unless the non-liability clause specifies otherwise, such clause does not exempt the seller from the repayment of the price.

Section 485. A non-liability clause cannot exempt the seller from the consequences of his own acts or of facts which he knew and concealed. 

CHAPTER III

DUTIES OF THE BUYER

Section 486. The buyer is bound to take delivery of the property sold and to pay the price in accordance with the terms of the contract of sale.

Section 487. The price of the property sold may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.

When the price is not determined as aforesaid, the buyer must pay a reasonable price.

Section 488. If the buyer has discovered defects in the property sold, he is entitled to withhold the price or part of it still unpaid, unless the seller gives proper security.

Section 489. The buyer is also entitled to withhold the price wholly or partly, if he is threatened, or has good reason to believe that he is about to be threatened, with an action by a mortgagee or by a person claiming the property sold, until the seller has caused the danger with which he is threatened to cease, or until the seller has given proper security.

Section 490. If a time is fixed for the delivery of the property sold, it is presumed that the same time is fixed for the payment of the price. 

CHAPTER IV

SOME PARTICUlAR KINDS OF SALES

PART I

Sale with Right of Redemption


Section 491. Sale with right of redemption is a contract of sale whereby the ownership of the property sold passes to the buyer subject to an agreement that the seller can redeem that property.

Section 492. Where the property sold is redeemed within the period fixed by the contract or by law, or where the person who redeems deposits the price of redemption to a deposit office within the period by waiving the right to withdraw the price, the ownership of the property shall be vested in the person who redeems from the time of payment or deposit of the price, as the case may be.

In the case of deposit under paragraph one, an official of the deposit office shall immediately give notice of it to the redeemed person, whereby the person who redeems does not have to comply with Section 333 paragraph three.

Section 493. The parties may agree that the buyer shall not dispose of the property sold. If he disposes of it contrary to his agreement, he shall be liable to the seller for any injury resulting thereby.

Section 494. The right of redemption cannot be exercised later than:

(1) Ten years after the time of the sale in case of immovable property.

(2) Three years after the time of sale in case of movable property.

Section 495. If a longer period is provided in the contract, it shall be reduced to ten years and three years respectively.

Section 496. The period of redemtion may be afterward extended by a contract, but if the total period is in excess of the period under Section 494, it shall be reduced to the period under Section 494.

The extension of the period under paragraph one must, at least, have some written evidence signed by the redeemed person. In case of the property whose sale must be made in writing and registered by the competent official, the extension can not be set up against a third person who has, for value and in good faith, acquired and registered his right unless such writing or written evidence is registered or recorded by the competent official.

Section 497. The right of redemption may be exercised only by:

(1) The original seller or his heirs, or

(2) The transferee of the right, or

(3) Any person expressly allowed to redeem by a contract.

Section 498. The right of redemption may be exercised only against:

(1) The original buyer
(2) The transferee of the property or of a right on the property, provided that, in case of movable property, he knew at the time of the transfer that such property was subject to a right of redemption.

Section 499. If no price of redemption id fixed, the property may be redeemed by reimbursing the price of the sale.

If the price of redemption or the price of the sale, at the time of redemption, is higher than the real price of the sale more than fifteen percent per year, it shall be redeemed at a real price including fifteen percent per year of profit.

Section 500. Costs of the sale borne by the buyer must be reimbursed together with the price.

Costs of redemption are borne by the person who redeems.

Section 501. The property must be returned in the condition in which it is at the time of redemption, provided that if the property has been destroyed or deteriorated through the fault of the buyer he must pay compensation therefore.

Section 502. The person who redeems the property recovers it free from any rights created by the original buyer or his heirs or transferee before redemption.

If a hire of property held subject to a right of redemption is registered by the competent official, it shall be valid for not more than one year of its remaining duration, provided that it is not made for the purpose of injuring the seller. 

PART II

Sale by Sample; Sale by Description; Sale on Approval

Section 503. In a sale by sample, the seller is bound to deliver property or properties corresponding to the sample.

In a sale by description, the seller is bound to deliver property corresponding to the description.

Section 504. No action for liability on account of non-correspondence to the sample or description can be entered later than one year after delivery.

Section 505. A sale on approval is the selling contract that the buyer having an option to buy when verifying the buying property.

Section 506. To verify the property, if there is no buying deadline, the seller may specify the reasonable deadline period and give a notice to the buyer to accept or reject the buying or not.

Section 507. The property that the buyer having option to verify before delivery, if the buyer does not accept it within the deadline stated in the contract or commercial practice or deadline setting by the seller, the selling contract is unbound.

Section 508. When the property is delivered to the buyer for verifying, the selling and the buying shall be absolutely completed in the following cases:

(1) If the buyer does not reject the purchasing within deadline specified in the contract or by commercial practice or setting by the seller; or
(2) If the buyer does not return the property to the seller within the said deadline; or
(3) If the buyer fully uses all the property or in some parts; or
(4) If the buyer sells the property or makes any buying signals.

Section 509. The auction shall be completed when the auctioneer accepts the final price by knocking the wood hammer or any practical acts in auct ion; otherwise the bidder can withdraw his bid in anytime.

Section 510. During bidding process, the bidder must comply with the bidding procedure that the auctioneer has announced in each bidding.

Section 511. The auctioneer cannot make a bid or let any person to make a bid for his own benefit that he is control the bidding process.

Section 512. The seller cannot make a bid or let any person to make a bid, except specified in the bidding terms and conditions that the seller has the right to bid.

Section 513. If the auctioneer thinks that the bidding price is not high enough, he may withdraw the said property auction.

Section 514. The bidder shall be unbound from his bid when other person offers a higher bidding price, even though the said bidding is complete or not, or when the auctioneer withdraws the said property auction.

Section 515. Bidder who offers the highest bidding price must pay in cash when the auction is complete or the deadline specified in the bidding advertising.

Section 516. If the bidder who offers the highest bidding price does not pay the money, the auctioneer may renew the auction. If the renew bidding price is lower than the previous one, such default bidder must liable for the short.

Section 517. If some or all of the proceed from auction is unpaid that the cause comes from the ignorance of the auctioneer under Section 515 or Section 516, the auctioneer has to liable for the unpaid amount. 

TITLE II

EXCHANGE

Section 518. Exchange is the contract that both parties transfer the right of ownership to each other.

Section 519. In any provisions of the laws relating to the selling and buying, the exchange is also included in such provision by implying that both parties are seller and buyer for such transfer of such properties.

Section 520. If any exchanging party accepts to add money with the exchange of property to anther, the selling price shall include such additional cash payment too.

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TITLE III

GIFT

Section 521. A gift is a contract whereby a person. Called the donor, transfers gratuitously a property of his own to another person, called the donee, and the donee accepts such property.

Section 522. A gift may be made by granting to the donee the release of an obligation or by performing an obligation due from the donee.

Section 523. A gift is valid only on delivery of the property given.

Section 524. If a right represented by a written instrument is given, the gift is not valid unless such instrument is delivered to the donee and the gift is notified in writing to the debtor of the right.

Section 525. The gift of a property the sale of which must be made in writing and registered by such competent official is valid only when so made and registered by the competent official. In such case it is valid without delivery.

Section 526. If a gift or a promise for a gift has been made in writing and registered by the competent official and the donor does not deliver to the donee the property given, the donee is entitled to claim the delivery of it or its value, but he is not entitled to any additional compensation.

Section 527. If a donor binds himself to make periodical performance the obligation is extinguished on the death either of the donor or the donee unless a contrary intention appears from the obligation.

Section 528. If the gift is encumbered with a charge and the donee fails to perform the charge, the donor may, under the conditions specified for the right of rescission in the case of reciprocal contracts, demand the return of the gift under the provisions relating to the return of undue enrichment in so far as the gift ought to have been applied to the performance of the change.

This claim is barred if a third party is entitled to require the performance of the charge.

Section 529. If the property given is not sufficient to satisfy the charge, the donee has to perform only to the extent of the value of the property.

Section 530. If the gift encumbered with a charge, the donor is liable for defect or eviction in the same manner as the seller but only to the extent of the charge.

Section 531. The donor can claim revocation of a gift for an act of ingratitude only in the following cases.

(1)
If the donee committed a serious criminal offence punishable under the Penal Code against the donor, or
(2) If the donee seriously defamed or insulted the donor, or
(3)
If the donee refused the donor who is in need of the necessaries of life while he was able to supply them.

Section. 532. The heir of the donor can claim revocation only if the donee has intentionally and unlawfully killed the donor or prevented him from revoking the gift.

However, the heir may continue an action which has been duly entered by the donor.

Section 533. A gift cannot be revoked if the donor has forgiven the donee, or if six months have elapsed since the time when the act of ingratitude came to knowledge of the person entitled to claim revocation.

No action can be claimed later than ten years after such act.

Section 534. If the gift is revoked, the property shall be returned under the provisions of this Code concerning Undue Enrichment.

Section 535. The following gifts are not revocable for ingratitude:

(1) Gifts purely remuneratory

(2) Gifts encumbered with a charge

(3) Gifts made in compliance with a moral duty

(4) Gifts made in consideration of marriage

Section 536. A gift to take effect at the death of the donor is governed by the provisions of Law concerning Inheritance and Wills.

CONTINUE TO PART II (SECTIONS 537 F.F.)

Note: English translations of the original Thai law texts are prepared for reference purposes only. Only the Thai script versions, as published in the royal Thai government gazette (ราชกิจจานุเบกษา), shall have legal force in Thailand.