Article 537Bail de location (contrat de louage), définition

Décisions de la Cour suprême interprétant cette section

1. Arrêt de la Cour suprême n° 17923/2557 (2014) ★ Monument

   Courts will re-characterise a contract labelled a lease as a sale when its true substance is a transfer of ownership.

   A contract labelled a 'lease' was re-characterised as a sale under Section 453 because its true purpose was to transfer rights and ownership of land rather than to grant temporary use under Section 537.

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2. Arrêt de la Cour suprême n° 6229/2541 (1998)

   A lease binds only its parties. A lease made before a company was incorporated cannot bind or benefit that company, and evidence that the named tenant signed on the company behalf cannot be set up against the lessor where the lease forbids assignment or subletting and provides that the parties are bound only by their written terms. Whether a lease is a reciprocal contract going beyond an ordinary lease is decided on its own terms: a deposit expressed to count as three months advance rent is rent and not consideration; works the tenant carries out for its own business are not consideration; and a clause vesting buildings in the lessor is not absolute where another clause lets the tenant remove them all on termination. Failing that, the lease is an ordinary one for its stated term, and once the lessor terminates after the term expires the tenant has no right to remain and its continued occupation is a tort.

   The landowner, acting through his mother under a power of attorney, granted two leases of the same land: the first in June 1983 to Ph. for three years, the second in September 1988 to the defendant company for three years at 100,000 baht a month. The company argued the first lease was really its own and that both were reciprocal contracts going beyond ordinary leases. The Supreme Court held the first lease bound only the landowner and Ph., since the company was not incorporated until December 1983, and its evidence that Ph. had signed for it contradicted the clauses forbidding assignment or subletting and confining the parties to their written terms. Neither lease went beyond an ordinary lease: the 180,000 baht deposit counted as three months advance rent, the earth-filling served the tenant own car-showroom and market business, and the clause vesting permanent buildings in the lessor was qualified by another allowing the tenant to remove them all on termination. The two leases were separate, made more than two years apart with different parties and terms. The second was therefore an ordinary three-year lease; once the landowner terminated it the company had no right to remain, its continued occupation was a tort, and it owed 200,000 baht of arrears and damages of 250,000 baht a month.

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Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.