Civil and Commercial Law1

Natural Person
A person who complete the age of twenty ceases to be a minor and become
sui juris. Moreover, a minor becomes suir juris upon marriage. 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.
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 must be placed under guardianship. Any act done by a person
adjudged incompetent is voidable. However 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.

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.
Furthermore, the person adjudged quasi-incompetent must be placed under
curatorship.

Juristic Persons
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. A juristic person enjoys
the same rights and is subjected to the same duties as a natural person. The
domicile of a juristic person is the place where it has its principal office or

1 กมล สนธิเกษตริ น. พิมพลักษณ์ กรุงเทพฯ : นิติบรรณการ, 2539.

1
establishment, or which has been selected as a special domicile in its regulation or
constitutive. 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.

Obligation
By virtue of an obligation the creditor is entitled to claim performance from
the debtor. The performance may consist in forbearance. 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. 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.

Contract
A contract between persons at a distance comes into existence at the time
when the notice of acceptance reached the offeror. If according to the declared
intention of the offeror or to ordinary usage no notice of acceptance is necessa ry,
the contract comes into existence at the time of the occurrence of the fact which is
to be considered as a declaration of intention to accept. A party to reciprocal
contract may refuse to perform his obligation until the other party performs or
tenders performance of his obligation.

Wrongful Act (Tort)

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. The court shall determine the
manner and the extent of compensation according to the circumstances and the

2
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 to be granted for any injury cause.

Hire of Property
A hire of property is a contract whereby a person, called the letter, agrees
to let another person, called the hirer, have the use or benefit of a property for a
limited period of time, and the hirer agrees to pay a rent therefore. A hire of
immovable property is not enforceable by action unless there be some written
evidence signed by the party liable. If the hire is for more than three years or for
the life of the letter or hirer, it is enforceable only for three years unless it is made
in writing and registered by the competent official.

Hire-Purchase
A hire-purchase is a contract whereby an owner of a property lets it out on
hire and promises to sell it to, or that it shall become the property of, the hirer,
conditionally on his making a certain number of payments. The contract of hire-
purchase is void unless made in writing. The hirer may at any time terminate the
contract by redelivering the property at his own expense to the owner.

Hire of Services
A hire of services is a contract whereby a person, called the employee,
agrees to render services to another person, called the employer, who agrees to pay
remuneration for the duration of the services. Absence of the employee from
service for a reasonable cause and during a reasonably short period does not entitle
the employer to terminate the contract.

Hire of Work
A hire of work is a contract whereby a person, called the contractor, agrees
to accomplish a definite work for another person, called the employer, who agrees
to pay him a remuneration of the result of the work. If the work is delivered after

3
the time fixed in the contract, or, if no tine was fixed, after reasonable time has
elapsed, the employer is entitled to a reduction of remuneration or when time is of
the essence of the contract to rescission.

Loan
A loan for use is a contract whereby a person, called the lender, lets another
person, called the borrower, have gratuitously the use of a property, and the
borrower agrees to return it after having made use thereof. A loan for use is
complete only on delivery of the property lent.
A loan for consumption is a contract whereby the lender transfers to the
borrower the ownership of a certain quantity of property which is consumed in the
user, and the borrower agrees to return a property of the same kind, quality and
quantity. The contract is complete only on delivery of the property.

Deposit
A deposit is a contract whereby a person, called the depositor, delivers a
property to another person, called the depositary, and the depositary agrees to keep
it in his custody and return it. If the parties have fixed no time for the return the
property deposited, the depositary can return it at any time.

Suretyship
Suretyship is a contract whereby a third person, called the surety, binds
himself to a creditor to satisfy an obligation in the event that the debtor fails to
perform it. A contract of suretyship is not enforceable by action unless there is
some written evidence signed by the surety. The surety who has performed
obligation has a right of recourse against the debtor for the principle and interest,
and for the losses or damages which he may suffer by reason of the suretyship.
The surety is discharged as soon as the obligation of the debtor is extinguished by
any cause whatsoever.

4
Mortgage
A mortgage is a contract whereby a person, called the mortgagor, assigns a
property to another person, called the mortgagee, as security for the performance
of an obligation, without delivering the property to the mortgagee. The mortgagee
is entitled to be paid out of the mortgaged property in preference to ordinary
creditors regardless as to whether or not the ownership of the property has been
transferred to the third person.

Pledge
A pledge is a contract whereby a person, called the pledgor, delivers to
another person, called the pledge, a moveable property as a security for the
performance of an obligation. The pledge is entitled to retain all the pledged
property until he has received full performance of the obligation and accessories.

Agency
Agency is a contract whereby a person, called the agent, has authority to
act for another person, called the principal, and agrees so to act. Agency may be
express or implies. If a transaction is by law required to be made in writing, the
appointment of an agent for such transaction must also be made in writing. The
principal is bound to third persons by the acts which the agent or the subagent has
done within the scope of his authority by virtue of his agency.

Brokerage
A person who agrees to pay remuneration to a broker for indicating the
opportunity for the conclusion of a contract, or for procuring a contract, is liable to
pay the remuneration only if the contract is concluded in consequence of the
indication or of the procurement by the broker. If the contract is concluded subject
to a condition precedent, the broker’s remuneration may not be claimed until the
condition is fulfilled. The broker is entitled to be reimbursed for expenses incurred
only if this has been agreed upon. This applies even if a contract is not concluded.

5
Insurance
A contract of insurances is one in which a person agrees to make
compensation or to pay a sum of money in case of contingent loss or any other
future event specified in the contract, and another person agrees to pay therefore a
sum of money, called premium.
Insurer means the party who agree to make compensation or to pay a sum
of money.
Assured means the party who agrees to pay the premium.
Beneficiary means the person who is to receive compensation or to be paid
a sum of money.
The assured and the beneficiary may be on and the same person.

FORMS OF BUSINESS ORGANIZATIONS 2

This section contains a brief description of the various t ypes of business

organizations and how they differ with respect to the factors.

Sole Proprietorship
A sole proprietorship is a business consisting of one person who owns and
completely controls the business. It is formed without any formality, and no
documents need be filed. A sole proprietorship is not a separate taxable entity and
only the sole proprietor is taxed. Sole proprietors have unlimited liability for the
sole proprietorship’s debts. The sole proprietor’s interest in the business is freely
transferable. The death of a sole proprietor dissolves the sole proprietorship.

General Partnership
A general partnership is a business association consisting of two or more persons
who co-own a business for profit. It is formed without any formality and no
documents need to be filed. A partnership may elect not to be separate taxable

2Richard A. Mann & Barry S. Roberts (2000). Business Law (11th ed.). Ohio: South-
Western College Publishing.

6
entity, in which case only the partners are taxed. Partners have unlimited liability
for the partnership’s debts. Each partner has an equal right to control of the
partnership. The death, bankruptcy, or withdrawal of a partner dissolves a
partnership.

Limited Partnership
A limited partnership is a business association consisting of at least one general
partner and at least one limited partner. It is formed by filing a certificat e of a
limited partnership. General partners have unlimited liability for the partnership’s
debts; limited partners have limited liability. Each general partner has an equal
right to control of the partnership; limited partners have no right to participate in
control. The death, bankruptcy, or withdrawal of a general partner dissolves a
limited partnership.

Corporation
A corporation is a legal entity separate and distinct from its owners. It is formed
by filing. A corporation is taxed as a separate entity, and shareholders are taxed on
corporate earning that distributed to them. The shareholders have limited liability
for the corporation’s obligations. The board of directors elected by the
shareholders manages the corporation. Shares in a corporation are fr eely
transferable. The death, bankruptcy, or withdrawal of a shareholder does not
dissolve the corporation.

Intellectual Property 3

What is Intellectual Property?

Intellectual property refers to creations of the mind: inventions; literary
and artistic works; and symbols, names and images used in commerce. Intellectual
property is divided into two categories

3World Intellectual Property Organization

http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf

7
 Industrial Property includes patents for inventions, trademarks, industrial
designs and geographical indications.

Copyright
Covers literary works (such as novels, poems and plays), films, music,
artistic works (e.g., drawings, paintings, photographs and sculptures) and
architectural design. Rights related to copyright include those of performing artists
in their performances, producers of phonograms in their recordings, and
broadcasters in their radio and television programs.

What is a Patent?
A patent is an exclusive right granted for an invention – a product or
process that provides a new way of doing something, or that offers a new technical
solution to a problem. A patent provides patent owners with protection for their
inventions. Protection is granted for a limited period, generally 20 years.

What is a trademark?
A trademark is a distinctive sign that identifies certain goods or services
produced or provided by an individual or a company. Its origin dates back to
ancient times when craftsmen reproduced their signatures, or “marks”, on their
artistic works or products of a functional or practical nature. Over the years, these
marks have evolved into today’s system of trademark registration and protection.
The system helps consumers to identify and purchase a product or service based
on whether its specific characteristics and quality – as indicated by its unique
trademark – meet their needs.

What is an Industrial Design?

An industrial design refers to the ornamental or aesthetic aspects of an
article. A design may consist of three - dimensional features, such as the shape or
surface of an article, or two - dimensional features, such as patterns, linesor color.
Industrial designs are applied to a wide variety of industrial products and
handicrafts: from technical and medical instruments to watches, jewelry and other

8
luxury items; from house wares and electrical appliances to vehicles and
architectural structures; from textile designs to leisure goods. To be protected
under most national laws, an industrial design must be new or original and non-
functional. This means that an industrial design is primarily of an aesthetic nature,
and any technical features of the article to which it is applied are not protected by
the design registration. However, those features could be protected by a patent.

What is a Geographical Indication?

A geographical indication is a sign used on goods that have a specific
geographical origin and possess qualities or a reputation due to that place of
origin. Most commonly, a geographical indication consists of the name of the
place of origin of the goods. Agricultural products typically have qualities that
derive from their place of production and are influenced by specific local
geographical factors, such as climate and soil. Whether a sign functions as a
geographical indication is a matter of national law and consumer perception.
Geographical indications may be used for a wide variety of agricultural products,
such as, for example, “Tuscany” for olive oil produced in a specific area of Italy,
or “Roquefort” for cheese produced in that region of France. The use of
geographical indications is not limited to agricultural products. They may also
highlight specific qualities of a product that are due to human factors found in the
product’s place of origin, such as specific manufacturing skills and traditions. The
place of origin may be a village or town, a region or a country. An example of the
latter is “Switzerland” or “Swiss”, perceived as a geographical indication in many
countries for products made in Switzerland and, in particular, for watches.