{"id":3112,"date":"2026-07-31T07:25:16","date_gmt":"2026-07-31T00:25:16","guid":{"rendered":"https:\/\/www.thailawonline.com\/?page_id=3112"},"modified":"2026-08-08T04:29:24","modified_gmt":"2026-08-07T21:29:24","slug":"construction-law-in-thailand","status":"publish","type":"page","link":"https:\/\/www.thailawonline.com\/th\/construction-law-in-thailand\/","title":{"rendered":"Construction Law in Thailand: Contracts and Disputes"},"content":{"rendered":"<p class=\"wp-block-paragraph\">A client called us from Phuket last year. His villa was 70% built. The contractor had stopped work. He was demanding an extra THB 4 million for &#8220;variations&#8221; nobody had signed off. He also held the building permit in his own company name. Our client had paid 80% of the contract price. He had no retention, no performance bond, and a two-page contract in Thai he had never had translated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He is not unusual. Construction law in Thailand is not hostile to foreign developers. It is just unforgiving of people who assume it works like home. Thailand has no construction-specific statute, no adjudication regime, and no specialist construction court. Your project sits on general contract rules written in 1925 plus a public safety statute from 1979.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This guide walks through what actually governs your build: the hire of work provisions of the Civil and Commercial Code, the Building Control Act B.E. 2522, the ownership limits under the Foreign Business Act, and the three routes a dispute can take. We cite the sections. We cite real Supreme Court decisions. And we tell you where the traps are.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What this guide covers<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How Thai law classifies your construction contract<\/li>\n\n\n\n<li>The Civil and Commercial Code sections that decide your case<\/li>\n\n\n\n<li>Defect liability, delay, and termination<\/li>\n\n\n\n<li>Building permits and the Building Control Act<\/li>\n\n\n\n<li>Foreign ownership limits for construction businesses<\/li>\n\n\n\n<li>Courts, arbitration, and mediation compared<\/li>\n\n\n\n<li>The draft payment adjudication bill<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"547\" height=\"1024\" src=\"https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-547x1024.png\" alt=\"construction law in  thailand\" class=\"wp-image-3113\" srcset=\"https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-547x1024.png 547w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-160x300.png 160w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-768x1439.png 768w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-820x1536.png 820w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-1093x2048.png 1093w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline-600x1124.png 600w, https:\/\/www.thailawonline.com\/wp-content\/uploads\/2026\/07\/construction-law-thailand-infographic-thailawonline.png 1200w\" sizes=\"auto, (max-width: 547px) 100vw, 547px\" \/><figcaption class=\"wp-element-caption\">construction law in  thailand<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><h2>\u0e2a\u0e32\u0e23\u0e1a\u0e31\u0e0d<\/h2><nav><ul><li><a href=\"#how-thai-law-classifies-a-construction-contract\">How Thai law classifies a construction contract<\/a><ul><li><a href=\"#what-hire-of-work-actually-means\">What &#8220;hire of work&#8221; actually means<\/a><\/li><li><a href=\"#materials-tools-and-the-duty-to-warn\">Materials, tools, and the duty to warn<\/a><\/li><li><a href=\"#your-right-to-inspect-during-the-works\">Your right to inspect during the works<\/a><\/li><\/ul><\/li><li><a href=\"#a-signed-piece-of-paper-is-not-always-a-contract\">A signed piece of paper is not always a contract<\/a><\/li><li><a href=\"#key-civil-and-commercial-code-sections-for-construction-contracts\">Key Civil and Commercial Code sections for construction contracts<\/a><\/li><li><a href=\"#defect-liability-in-thailand-one-year-or-five\">Defect liability in Thailand: one year or five<\/a><ul><li><a href=\"#the-section-601-trap\">The Section 601 trap<\/a><\/li><li><a href=\"#acceptance-is-a-legal-event-not-a-formality\">Acceptance is a legal event, not a formality<\/a><\/li><li><a href=\"#risk-of-loss-before-handover\">Risk of loss before handover<\/a><\/li><\/ul><\/li><li><a href=\"#delay-and-termination-your-exits-under-thai-law\">Delay and termination: your exits under Thai law<\/a><ul><li><a href=\"#terminating-for-delay\">Terminating for delay<\/a><\/li><li><a href=\"#terminating-at-will-under-section-605\">Terminating at will under Section 605<\/a><\/li><li><a href=\"#what-value-of-work-done-means-on-termination\">What &#8220;value of work done&#8221; means on termination<\/a><\/li><\/ul><\/li><li><a href=\"#building-permits-and-the-building-control-act-b-e-2522\">Building permits and the Building Control Act B.E. 2522<\/a><ul><li><a href=\"#the-permit-requirement\">The permit requirement<\/a><\/li><li><a href=\"#zoning-setbacks-and-elevation-limits\">Zoning, setbacks, and elevation limits<\/a><\/li><li><a href=\"#enforcement\">\u0e01\u0e32\u0e23\u0e1a\u0e31\u0e07\u0e04\u0e31\u0e1a\u0e43\u0e0a\u0e49\u0e01\u0e0e\u0e2b\u0e21\u0e32\u0e22<\/a><\/li><\/ul><\/li><li><a href=\"#can-a-foreigner-own-a-construction-company-in-thailand\">Can a foreigner own a construction company in Thailand?<\/a><ul><li><a href=\"#architecture-and-engineering-are-separately-restricted\">Architecture and engineering are separately restricted<\/a><\/li><li><a href=\"#how-projects-are-usually-structured\">How projects are usually structured<\/a><\/li><\/ul><\/li><li><a href=\"#resolving-construction-disputes-in-thailand\">Resolving construction disputes in Thailand<\/a><ul><li><a href=\"#thai-courts\">\u0e28\u0e32\u0e25\u0e44\u0e17\u0e22<\/a><\/li><li><a href=\"#arbitration-tai-and-thac\">Arbitration: TAI and THAC<\/a><\/li><\/ul><\/li><li><a href=\"#understanding-construction-law-in-thailand\">Understanding Construction Law in Thailand<\/a><ul><li><a href=\"#mediation\">\u0e01\u0e32\u0e23\u0e44\u0e01\u0e25\u0e48\u0e40\u0e01\u0e25\u0e35\u0e48\u0e22<\/a><\/li><\/ul><\/li><li><a href=\"#contract-security-bonds-retention-and-what-to-insist-on\">Contract security: bonds, retention, and what to insist on<\/a><\/li><li><a href=\"#the-draft-construction-payment-law-what-is-coming\">The draft construction payment law: what is coming<\/a><\/li><li><a href=\"#protecting-a-construction-project-in-thailand-a-practical-sequence\">Protecting a construction project in Thailand: a practical sequence<\/a><\/li><li><a href=\"#frequently-asked-questions\">\u0e04\u0e33\u0e16\u0e32\u0e21\u0e17\u0e35\u0e48\u0e1e\u0e1a\u0e1a\u0e48\u0e2d\u0e22<\/a><ul><li><a href=\"#faq-question-1785458385284\">Does a construction contract in Thailand have to be in writing?<\/a><\/li><li><a href=\"#faq-question-1785458387414\">How long is a contractor liable for defects in Thailand?<\/a><\/li><li><a href=\"#faq-question-1785458408614\">How long do I have to sue my contractor after a defect appears?<\/a><\/li><li><a href=\"#faq-question-1785458420747\">Can I cancel a construction contract in Thailand if I change my mind?<\/a><\/li><li><a href=\"#faq-question-1785458423031\">Can a foreigner own a construction company in Thailand?<\/a><\/li><li><a href=\"#faq-question-1785458453314\">Is arbitration better than court for a Thai construction dispute?<\/a><\/li><li><a href=\"#faq-question-1785458467881\">Are pay-when-paid clauses enforceable in Thailand?<\/a><\/li><li><a href=\"#faq-question-1785458482181\">Who applies for the building permit, me or my contractor?<\/a><\/li><li><a href=\"#faq-question-1785458494648\">What if my neighbour&#8217;s construction damages my building?<\/a><\/li><li><a href=\"#faq-question-1785458531548\">Can I withhold payment if the work is defective?<\/a><\/li><li><a href=\"#are-pay-when-paid-clauses-enforceable-in-thailand\">ThaiLawOnline \u0e2a\u0e32\u0e21\u0e32\u0e23\u0e16\u0e0a\u0e48\u0e27\u0e22\u0e40\u0e2b\u0e25\u0e37\u0e2d\u0e04\u0e38\u0e13\u0e44\u0e14\u0e49\u0e2d\u0e22\u0e48\u0e32\u0e07\u0e44\u0e23<\/a><\/li><\/ul><\/li><li><a href=\"#key-takeaways\">\u0e1b\u0e23\u0e30\u0e40\u0e14\u0e47\u0e19\u0e2a\u0e33\u0e04\u0e31\u0e0d<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n<h2 id=\"how-thai-law-classifies-a-construction-contract\" class=\"wp-block-heading\">How Thai law classifies a construction contract<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is no Construction Act in Thailand. Your building contract is a &#8220;hire of work&#8221; contract, governed by Sections 587 to 607 of the Civil and Commercial Code. That is the same chapter that covers a tailor making a suit. The Code does not care that your project is a 37-storey condominium.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This matters more than it sounds. Common law developers expect construction-specific doctrines: extensions of time, prevention principle, global claims, liquidated damages jurisprudence. Thai law gives you none of that by default. What you get is a short set of default rules, and whatever you wrote into the contract.<\/p>\n\n\n\n<h3 id=\"what-hire-of-work-actually-means\" class=\"wp-block-heading\">What &#8220;hire of work&#8221; actually means<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 587 defines it. The contractor agrees to accomplish a definite work. The employer agrees to pay remuneration for the result. The key word is result. This is an obligation of result, not of effort. Your contractor does not discharge his duty by trying hard.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contract does not need to be in writing to be enforceable. Oral construction contracts are valid in Thailand. That is a trap, not a convenience. Without a written scope, programme, and price mechanism, you are litigating over what two people remember.<\/p>\n\n\n\n<h3 id=\"materials-tools-and-the-duty-to-warn\" class=\"wp-block-heading\">Materials, tools, and the duty to warn<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 588 puts the tools and equipment on the contractor. Section 589 says that if the contractor supplies the materials, they must be of good quality. Section 590 covers the reverse case. If you supply the materials, the contractor must use them carefully and return the surplus.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 591 is the one foreign developers should read twice. The contractor is not liable for defects or delay caused by the nature of materials you supplied, or by your own instructions. But that protection falls away if the contractor knew the materials were unfit or the instruction was improper and said nothing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practice point.<\/strong>&nbsp;Section 591 is a duty to warn. Put it in the contract explicitly, with a written notification mechanism and a deadline. In our experience, contractors go quiet about a bad design detail and then blame the architect. They are far easier to pin down when the contract spells out when they had to speak up.<\/p>\n\n\n\n<h3 id=\"your-right-to-inspect-during-the-works\" class=\"wp-block-heading\">Your right to inspect during the works<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 592 gives you a statutory right to inspect the works at any time during execution. You can exercise it through your engineer or project manager. Use it. Weekly documented site inspections are the cheapest evidence you will ever buy.<\/p>\n\n\n\n<h2 id=\"a-signed-piece-of-paper-is-not-always-a-contract\" class=\"wp-block-heading\">A signed piece of paper is not always a contract<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Thai contract formation rules bite in procurement. If you counter-offer on price, you have rejected the original offer and made a new one. Section 359 paragraph two says so. And between parties at a distance, the contract only forms when the acceptance actually reaches the offeror, under Section 361 paragraph one and Section 169.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Decision No. 670\/2566.<\/strong>&nbsp;An employer sent a letter negotiating the price down on a steel pipe laying contract. The contractor never responded. The Court held there was no contract at all. The employer&#8217;s letter was a rejection plus a fresh offer, and without an acceptance reaching the employer, nothing formed. The employer was free to withdraw.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So you have issued a letter of intent. Or revised a tender price by email. Or &#8220;agreed in principle&#8221; at a site meeting. Do not assume you are bound. And do not assume your contractor is bound either. Close the loop in writing.<\/p>\n\n\n\n<h2 id=\"key-civil-and-commercial-code-sections-for-construction-contracts\" class=\"wp-block-heading\">Key Civil and Commercial Code sections for construction contracts<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">\u0e2a\u0e48\u0e27\u0e19<\/th><th class=\"has-text-align-left\" data-align=\"left\">What it does<\/th><th class=\"has-text-align-left\" data-align=\"left\">Why it matters to you<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">587<\/td><td class=\"has-text-align-left\" data-align=\"left\">Defines hire of work<\/td><td class=\"has-text-align-left\" data-align=\"left\">Your build is judged on result, not effort<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">588 to 590<\/td><td class=\"has-text-align-left\" data-align=\"left\">Tools, material quality, care of your materials<\/td><td class=\"has-text-align-left\" data-align=\"left\">Sets the baseline if the contract is silent<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">591<\/td><td class=\"has-text-align-left\" data-align=\"left\">Contractor excused for your materials or instructions<\/td><td class=\"has-text-align-left\" data-align=\"left\">Unless he knew and failed to warn you<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">592<\/td><td class=\"has-text-align-left\" data-align=\"left\">Employer&#8217;s right to inspect the works<\/td><td class=\"has-text-align-left\" data-align=\"left\">Statutory access for your engineer<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">593<\/td><td class=\"has-text-align-left\" data-align=\"left\">Terminate for late start or hopeless delay<\/td><td class=\"has-text-align-left\" data-align=\"left\">You need not wait for the completion date<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">594<\/td><td class=\"has-text-align-left\" data-align=\"left\">Notice to rectify, then engage a third party<\/td><td class=\"has-text-align-left\" data-align=\"left\">Remedial works at the contractor&#8217;s cost<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">596<\/td><td class=\"has-text-align-left\" data-align=\"left\">Price reduction for late delivery<\/td><td class=\"has-text-align-left\" data-align=\"left\">Rescission if time was of the essence<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">597<\/td><td class=\"has-text-align-left\" data-align=\"left\">Acceptance without reservation<\/td><td class=\"has-text-align-left\" data-align=\"left\">Releases the contractor from delay liability<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">598<\/td><td class=\"has-text-align-left\" data-align=\"left\">Acceptance of defective work<\/td><td class=\"has-text-align-left\" data-align=\"left\">Latent or concealed defects still survive<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">599<\/td><td class=\"has-text-align-left\" data-align=\"left\">Withhold remuneration for delay or defects<\/td><td class=\"has-text-align-left\" data-align=\"left\">Unless the contractor gives proper security<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">600<\/td><td class=\"has-text-align-left\" data-align=\"left\">Defect liability: one year, or five for structures on land<\/td><td class=\"has-text-align-left\" data-align=\"left\">Applies only if the contract says nothing else<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">601<\/td><td class=\"has-text-align-left\" data-align=\"left\">One year to sue from when the defect appeared<\/td><td class=\"has-text-align-left\" data-align=\"left\">The single most missed deadline in Thai construction<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">602<\/td><td class=\"has-text-align-left\" data-align=\"left\">Payment on taking delivery, or per accepted part<\/td><td class=\"has-text-align-left\" data-align=\"left\">Anchor for your milestone schedule<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">603 and 604<\/td><td class=\"has-text-align-left\" data-align=\"left\">Risk of loss before proper delivery<\/td><td class=\"has-text-align-left\" data-align=\"left\">Follows whoever supplied the materials<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">605<\/td><td class=\"has-text-align-left\" data-align=\"left\">Employer may terminate at will, with compensation<\/td><td class=\"has-text-align-left\" data-align=\"left\">A powerful and expensive exit<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">606<\/td><td class=\"has-text-align-left\" data-align=\"left\">Contract ends if the contractor&#8217;s personal skill was essential<\/td><td class=\"has-text-align-left\" data-align=\"left\">Pay for the useful part completed<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">607<\/td><td class=\"has-text-align-left\" data-align=\"left\">Subcontracting permitted<\/td><td class=\"has-text-align-left\" data-align=\"left\">Your contractor stays responsible for the subbies<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"defect-liability-in-thailand-one-year-or-five\" class=\"wp-block-heading\">Defect liability in Thailand: one year or five<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Section 600 sets the default. If the contract says nothing else, the contractor answers for defects that appear within one year of delivery. That stretches to five years where the work is a structure built on the land, other than a wooden building. So your concrete villa, your masonry commercial block, and your condominium tower all get five years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two things about that. First, it is a default. Your contract can shorten or lengthen it, and most well-drafted contracts do. Second, the limitation does not apply at all where the contractor concealed the defect. Concealment reopens everything.<\/p>\n\n\n\n<h3 id=\"the-section-601-trap\" class=\"wp-block-heading\">The Section 601 trap<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Here is where foreign developers lose good claims. Section 601 bars an action against the contractor one year after the day the defect appeared. Not one year after the warranty ends. One year after the defect showed up.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Read that against Section 600. You may have a five-year defect period. But if a crack appears in year two and you spend eighteen months negotiating, your claim is dead. We have seen it happen to clients who thought they were being reasonable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Decision No. 3612\/2560.<\/strong>&nbsp;The Court drew a line that is worth money to you. The one-year bar in Section 601 applies only to the Section 600 situation. That means a defect emerging after the contractor delivered correct, complete work at handover. It does not apply where the contractor built badly in the first place. Wrong materials, or work below the standard of the trade, sits outside Section 601. That is a straight breach of contract claim.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Decision No. 22850\/2555.<\/strong>&nbsp;Same principle, different facts. A shore power installation failed to perform. The Court held the claim was for defective performance of the contract, not for defects in the thing under Section 601. So the ten-year general limitation in Section 193\/30 applied, and a claim brought nine years after handover survived.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The practical consequence: how you plead matters enormously. Frame the claim as workmanship that never complied with the contract, and you are arguing for ten years. Frame it as a defect that emerged post-handover, and you are inside a one-year window. Get advice before you send the demand letter.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Claim type<\/th><th class=\"has-text-align-left\" data-align=\"left\">Period<\/th><th class=\"has-text-align-left\" data-align=\"left\">Runs from<\/th><th class=\"has-text-align-left\" data-align=\"left\">\u0e41\u0e2b\u0e25\u0e48\u0e07\u0e17\u0e35\u0e48\u0e21\u0e32<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">Defects, general works<\/td><td class=\"has-text-align-left\" data-align=\"left\">1 year liability<\/td><td class=\"has-text-align-left\" data-align=\"left\">Delivery<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.600<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Defects, structure on land (not wooden)<\/td><td class=\"has-text-align-left\" data-align=\"left\">5 years liability<\/td><td class=\"has-text-align-left\" data-align=\"left\">Delivery<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.600<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Action for defects<\/td><td class=\"has-text-align-left\" data-align=\"left\">1 \u0e1b\u0e35<\/td><td class=\"has-text-align-left\" data-align=\"left\">The day the defect appeared<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.601<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Breach of contract, no special period<\/td><td class=\"has-text-align-left\" data-align=\"left\">10 \u0e1b\u0e35<\/td><td class=\"has-text-align-left\" data-align=\"left\">When the right could be enforced<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.193\/30<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Contractor, engineer or architect suing for fees<\/td><td class=\"has-text-align-left\" data-align=\"left\">2 \u0e1b\u0e35<\/td><td class=\"has-text-align-left\" data-align=\"left\">When the fee fell due<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.193\/34<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Concealed defect<\/td><td class=\"has-text-align-left\" data-align=\"left\">No Section 600 limit<\/td><td class=\"has-text-align-left\" data-align=\"left\">\u0e44\u0e21\u0e48\u0e40\u0e01\u0e35\u0e48\u0e22\u0e27\u0e02\u0e49\u0e2d\u0e07<\/td><td class=\"has-text-align-left\" data-align=\"left\">CCC s.600, final clause<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"acceptance-is-a-legal-event-not-a-formality\" class=\"wp-block-heading\">Acceptance is a legal event, not a formality<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 597 says that if you accept the work without reservation, the contractor is released from liability for late delivery. Section 598 says that if you accept work you know is defective, without objection, the contractor is off the hook. Express acceptance counts. So does implied acceptance, including moving in.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 598 keeps two things alive: defects that could not reasonably have been found at handover, and defects the contractor actively concealed. Everything else, you waived.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practice point.<\/strong>&nbsp;Never sign a clean handover certificate. Attach a snag list. Write &#8220;accepted subject to the attached list of defects and without waiver of any claim for delay&#8221; and have both parties sign the list. Take photographs the same day. That single paragraph has saved our clients seven-figure claims.<\/p>\n\n\n\n<h3 id=\"risk-of-loss-before-handover\" class=\"wp-block-heading\">Risk of loss before handover<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Sections 603 and 604 allocate loss if the works are destroyed or damaged before proper delivery. If the contractor supplied the materials, the loss is his and no payment is due, unless your acts caused it. If you supplied the materials, the loss is yours.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Flood, fire, and storm are real risks in Thailand. Do not rely on the Code here. Specify a contractors all risks policy, name both parties as insured, and state who carries the deductible.<\/p>\n\n\n\n<h2 id=\"delay-and-termination-your-exits-under-thai-law\" class=\"wp-block-heading\">Delay and termination: your exits under Thai law<\/h2>\n\n\n\n<h3 id=\"terminating-for-delay\" class=\"wp-block-heading\">Terminating for delay<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 593 gives you three triggers. The contractor fails to start in reasonable time. Or he delays in breach of the contract. Or he delays so badly that it is already obvious he cannot finish on time, through no fault of yours. In any of those cases you can cancel immediately. You do not have to sit and wait for the completion date to pass.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 594 gives you the middle option. Say it becomes clear during the works that the result will be defective through the contractor&#8217;s fault. You can serve notice to rectify within a reasonable stated period. If he does not comply, you can bring in a third party to repair or complete, at his risk and expense.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 596 adds price relief. Late delivery entitles you to a reduction in the price. If time was of the essence in your contract, you can rescind outright.<\/p>\n\n\n\n<h3 id=\"terminating-at-will-under-section-605\" class=\"wp-block-heading\">Terminating at will under Section 605<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This is the clause most foreign developers do not know exists. As long as the work is unfinished, you can terminate for any reason or none. The price is compensation to the contractor for the loss your termination causes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Decision No. 857\/2567.<\/strong>&nbsp;A turnkey house building contract. The employers told the contractor to stop during instalment seven and paid that instalment in full. The Court held that this was an exercise of the Section 605 right to terminate at will, so compensation was owed. The parties then negotiated a post-termination settlement of THB 250,000, payable in five instalments. The Court held that this was an agreed measure of compensation, not a contractual penalty. So it was enforceable in full, with no judicial reduction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two lessons. First, telling a contractor to stop is a legal act with a price tag, even if you never used the word &#8220;terminate&#8221;. Second, a clean post-termination settlement agreement is worth having. Once framed as agreed compensation rather than a contractual penalty, the courts will enforce it as written.<\/p>\n\n\n\n<h3 id=\"what-value-of-work-done-means-on-termination\" class=\"wp-block-heading\">What &#8220;value of work done&#8221; means on termination<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">When a contract is rescinded, Section 391 paragraph one puts the parties back in their original positions. Work already performed cannot be unwound, so paragraph three requires payment of the value of that work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Supreme Court Decision No. 2835\/2566.<\/strong>&nbsp;The Court awarded nothing for the contractor&#8217;s preparatory work because the employer could not use any of it. Formulations had been developed but kept secret, so the employer could not take them to another supplier. Work that delivers no transferable benefit to the employer is not &#8220;work done&#8221; you have to pay for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Translate that to a building site. If your contractor walks at 40%, the value you owe is what you can actually use. Verified installed works, transferred materials, transferable drawings and approvals. Not his mobilisation cost, not his overhead, not his lost profit on the part he never built.<\/p>\n\n\n\n<h2 id=\"building-permits-and-the-building-control-act-b-e-2522\" class=\"wp-block-heading\">Building permits and the Building Control Act B.E. 2522<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Building Control Act B.E. 2522 is the public law layer over your private contract. It is enforced by local authorities, and it is enforced hard.<\/p>\n\n\n\n<h3 id=\"the-permit-requirement\" class=\"wp-block-heading\">The permit requirement<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 21 prohibits construction, alteration, relocation, or demolition of a building in a designated controlled area without a building permit or the equivalent notification. Section 23 sets the documents: architectural drawings, structural calculations, and a programme, certified by a Thai-licensed engineer and architect. Local authority review commonly runs around 45 days.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your permit covers the approved scope only. Change the height, add a floor, move the footprint, and you are building without a permit for that element. Permits also lapse if you do not commence within the statutory window, so do not sit on one while you arrange finance.<\/p>\n\n\n\n<h3 id=\"zoning-setbacks-and-elevation-limits\" class=\"wp-block-heading\">Zoning, setbacks, and elevation limits<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ministerial regulations under the Act restrict what you can build by location. In coastal zones, the restrictions are severe. Koh Samui zoning bands limit building height and floor area by distance from the beach, with an absolute no-build strip closest to the water. On Phuket, construction is prohibited above a set elevation on the hillsides, whatever your title deed says.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That last point deserves emphasis. Holding a&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/title-deeds-in-thailand\/\">chanote title deed<\/a>&nbsp;tells you who owns the land. It tells you nothing about whether you can build on it. Buyers conflate the two constantly.<\/p>\n\n\n\n<h3 id=\"enforcement\" class=\"wp-block-heading\">\u0e01\u0e32\u0e23\u0e1a\u0e31\u0e07\u0e04\u0e31\u0e1a\u0e43\u0e0a\u0e49\u0e01\u0e0e\u0e2b\u0e21\u0e32\u0e22<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Local officials can issue stop-work orders and require rectification within a set period. Where a building cannot be brought into compliance, they can order partial or total demolition. Continuing breaches attract daily fines, and there is criminal exposure where non-compliance leads to structural failure or injury. In Bangkok and other urban centres, inspectors act without needing a court order first.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practice point.<\/strong>&nbsp;Never let the permit sit in the contractor&#8217;s name. It should be held by the landowner, or by the party with the registered right to build. That means a&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/lease-agreement-in-thailand\/\">\u0e2a\u0e31\u0e0d\u0e0d\u0e32\u0e40\u0e0a\u0e48\u0e32\u0e17\u0e35\u0e48\u0e08\u0e14\u0e17\u0e30\u0e40\u0e1a\u0e35\u0e22\u0e19<\/a>&nbsp;or a superficies. Get this wrong and a contractor dispute becomes a hostage situation. Our&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/due-diligence-in-thailand\/\">\u0e01\u0e32\u0e23\u0e15\u0e23\u0e27\u0e08\u0e2a\u0e2d\u0e1a\u0e2a\u0e16\u0e32\u0e19\u0e30\u0e17\u0e23\u0e31\u0e1e\u0e22\u0e4c\u0e2a\u0e34\u0e19\u0e2d\u0e22\u0e48\u0e32\u0e07\u0e25\u0e30\u0e40\u0e2d\u0e35\u0e22\u0e14<\/a>&nbsp;checks catch this before money moves.<\/p>\n\n\n\n<h2 id=\"can-a-foreigner-own-a-construction-company-in-thailand\" class=\"wp-block-heading\">Can a foreigner own a construction company in Thailand?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Mostly not, without a licence. Construction appears at List 3(10) of the&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/foreign-business-act\/\">\u0e1e\u0e23\u0e30\u0e23\u0e32\u0e0a\u0e1a\u0e31\u0e0d\u0e0d\u0e31\u0e15\u0e34\u0e18\u0e38\u0e23\u0e01\u0e34\u0e08\u0e15\u0e48\u0e32\u0e07\u0e1b\u0e23\u0e30\u0e40\u0e17\u0e28 \u0e1e.\u0e28. 2542<\/a>, in the schedule of businesses Thai nationals &#8220;are not yet ready to compete&#8221; in. A company with 50% or more foreign shareholding is treated as foreign and needs a foreign business licence from the Department of Business Development.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">List 3(10) carves out two exceptions. The first covers construction providing basic public services in public utilities or transport. It must require special tools, machinery, technology, or construction expertise. And the foreigner&#8217;s minimum capital must be THB 500 million or more. The second is any other category of construction prescribed by ministerial regulation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Note what the exception does not cover. A foreign-majority company building villas, condominiums, hotels, or commercial premises falls squarely inside the restriction.<\/p>\n\n\n\n<h3 id=\"architecture-and-engineering-are-separately-restricted\" class=\"wp-block-heading\">Architecture and engineering are separately restricted<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">List 3(8) covers architecture services. List 3(9) covers engineering services. These are separate line items from construction, and each business line needs its own approval. A licence to provide architectural services does not let you carry out engineering work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On top of that, engineering and architecture are licensed professions. Design documents submitted for a building permit must be certified by a professional licensed in Thailand. Foreign nationals cannot practise as licensed engineers or architects here. In practice, a firm in these fields needs licensed Thai professionals in place. Foreign staff on site need work permits before they do anything.<\/p>\n\n\n\n<h3 id=\"how-projects-are-usually-structured\" class=\"wp-block-heading\">How projects are usually structured<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Thai majority company.<\/strong>&nbsp;The common route. Watch the nominee shareholding rules carefully, and document genuine Thai investment.<\/li>\n\n\n\n<li><strong>BOI promotion.<\/strong>&nbsp;Board of Investment promotion can relieve foreign shareholding limits for qualifying activities. Civil engineering and architectural services remain restricted under a Trade and Investment Support Office.<\/li>\n\n\n\n<li><strong>Split contracts.<\/strong>&nbsp;Standard on EPC projects. Offshore supply and engineering sit in one contract, onshore construction in another, with a wrap-around agreement. The onshore entity must hold the right licences, or engage a licensed Thai subcontractor to certify the engineering.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Getting the vehicle right is a&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/business-law-in-thailand\/\">corporate structuring<\/a>&nbsp;exercise, not a construction one. Do it before you sign anything.<\/p>\n\n\n\n<h2 id=\"resolving-construction-disputes-in-thailand\" class=\"wp-block-heading\">Resolving construction disputes in Thailand<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is no specialist construction court in Thailand and no statutory adjudication. Your dispute goes to the general civil courts, to arbitration, or to mediation. Choose in the contract, before anything goes wrong.<\/p>\n\n\n\n<h3 id=\"thai-courts\" class=\"wp-block-heading\">\u0e28\u0e32\u0e25\u0e44\u0e17\u0e22<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Construction claims are filed in the general civil court with territorial jurisdiction over the defendant or over the place where the cause of action arose. Proceedings are conducted in Thai. Every foreign-language document needs a certified translation, and your foreign witnesses give evidence through an interpreter.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A first instance judgment typically takes six months to two years. There are three tiers: Court of First Instance, Court of Appeal, and Supreme Court. Either party can appeal, so budget for the full run.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The burden of proving defects, causation, and quantum sits with the employer. That almost always means independent expert reports. Thai courts accept expert evidence and it is standard in technical cases. Start building that record on site, not after the writ.<\/p>\n\n\n\n<h3 id=\"arbitration-tai-and-thac\" class=\"wp-block-heading\">Arbitration: TAI and THAC<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Arbitration runs under the Arbitration Act B.E. 2545, which follows the UNCITRAL Model Law. Thailand has been a party to the New York Convention since 1959, subject to the usual reciprocity and commercial reservations. Foreign awards are enforceable here unless they offend Thai public policy or fall within the narrow statutory grounds. An award set aside at its seat will not be enforced.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>TAI<\/strong>, the Thai Arbitration Institute, was established in 1989 under the Office of the Judiciary. It is government funded and charges no administrative fee. You pay only the actual costs of the proceedings, principally the arbitrators. Its practice is well understood by the Thai courts. Proceedings run in Thai or English.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>THAC<\/strong>, the Thailand Arbitration Center, has operated under the Ministry of Justice since 2015. It is built for cross-border users, charges administrative fees, supports bilingual proceedings, and runs a small claims track for disputes under THB 35 million.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two limits worth knowing. You cannot contract out of the statutory rights to challenge or appeal an award. Such clauses are void on public policy grounds. And third-party litigation funding is not accepted in Thailand, so do not build a claim strategy around it.<\/p>\n\n\n\n<h2 id=\"understanding-construction-law-in-thailand\" class=\"wp-block-heading\">Understanding Construction Law in Thailand<\/h2>\n\n\n\n<h3 id=\"mediation\" class=\"wp-block-heading\">\u0e01\u0e32\u0e23\u0e44\u0e01\u0e25\u0e48\u0e40\u0e01\u0e25\u0e35\u0e48\u0e22<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Court-annexed mediation is available before or during proceedings. Pre-action mediation carries no court fee and suspends the limitation period. A successful mediation becomes a consent judgment, immediately enforceable and valid for ten years. If it fails, you get a 60-day extension on the limitation period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Out-of-court mediation runs under the Dispute Mediation Act and is limited in scope. Thailand has not adopted the Singapore Convention on Mediation. So parties convert a settlement into a consent award or a consent judgment to make it enforceable.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-left\" data-align=\"left\"><\/th><th class=\"has-text-align-left\" data-align=\"left\">\u0e28\u0e32\u0e25\u0e44\u0e17\u0e22<\/th><th class=\"has-text-align-left\" data-align=\"left\">TAI arbitration<\/th><th class=\"has-text-align-left\" data-align=\"left\">THAC arbitration<\/th><th class=\"has-text-align-left\" data-align=\"left\">Court mediation<\/th><\/tr><\/thead><tbody><tr><th class=\"has-text-align-left\" data-align=\"left\">\u0e20\u0e32\u0e29\u0e32<\/th><td class=\"has-text-align-left\" data-align=\"left\">\u0e20\u0e32\u0e29\u0e32\u0e44\u0e17\u0e22\u0e40\u0e17\u0e48\u0e32\u0e19\u0e31\u0e49\u0e19<\/td><td class=\"has-text-align-left\" data-align=\"left\">Thai or English<\/td><td class=\"has-text-align-left\" data-align=\"left\">Thai or English<\/td><td class=\"has-text-align-left\" data-align=\"left\">\u0e41\u0e1a\u0e1a\u0e44\u0e17\u0e22<\/td><\/tr><tr><th class=\"has-text-align-left\" data-align=\"left\">Typical duration<\/th><td class=\"has-text-align-left\" data-align=\"left\">6 months to 2 years at first instance, plus appeals<\/td><td class=\"has-text-align-left\" data-align=\"left\">Faster, single tier<\/td><td class=\"has-text-align-left\" data-align=\"left\">Faster, single tier<\/td><td class=\"has-text-align-left\" data-align=\"left\">Weeks<\/td><\/tr><tr><th class=\"has-text-align-left\" data-align=\"left\">Institutional fee<\/th><td class=\"has-text-align-left\" data-align=\"left\">Court filing fees<\/td><td class=\"has-text-align-left\" data-align=\"left\">None, actual costs only<\/td><td class=\"has-text-align-left\" data-align=\"left\">Administrative fee plus costs<\/td><td class=\"has-text-align-left\" data-align=\"left\">None for pre-action<\/td><\/tr><tr><th class=\"has-text-align-left\" data-align=\"left\">Appeal layers<\/th><td class=\"has-text-align-left\" data-align=\"left\">Three tiers<\/td><td class=\"has-text-align-left\" data-align=\"left\">Limited challenge only<\/td><td class=\"has-text-align-left\" data-align=\"left\">Limited challenge only<\/td><td class=\"has-text-align-left\" data-align=\"left\">\u0e44\u0e21\u0e48\u0e40\u0e01\u0e35\u0e48\u0e22\u0e27\u0e02\u0e49\u0e2d\u0e07<\/td><\/tr><tr><th class=\"has-text-align-left\" data-align=\"left\">Cross-border enforcement<\/th><td class=\"has-text-align-left\" data-align=\"left\">Depends on treaty and reciprocity<\/td><td class=\"has-text-align-left\" data-align=\"left\">New York Convention<\/td><td class=\"has-text-align-left\" data-align=\"left\">New York Convention<\/td><td class=\"has-text-align-left\" data-align=\"left\">Needs conversion to judgment or award<\/td><\/tr><tr><th class=\"has-text-align-left\" data-align=\"left\">\u0e40\u0e2b\u0e21\u0e32\u0e30\u0e17\u0e35\u0e48\u0e2a\u0e38\u0e14\u0e2a\u0e33\u0e2b\u0e23\u0e31\u0e1a<\/th><td class=\"has-text-align-left\" data-align=\"left\">Domestic parties, urgent injunctive relief<\/td><td class=\"has-text-align-left\" data-align=\"left\">Thai-law projects wanting court-familiar procedure<\/td><td class=\"has-text-align-left\" data-align=\"left\">Cross-border projects, international counsel<\/td><td class=\"has-text-align-left\" data-align=\"left\">Preserving the commercial relationship<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Our view, after twenty years of these files: for a foreign-funded project of any size, arbitrate. Put a multi-tiered clause in the contract. Senior executive negotiation, then mediation, then arbitration seated in Bangkok under THAC or TAI rules, in English. If you want to understand the litigation alternative first, read our note on&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/what-to-know-before-you-go-to-court-in-thailand\/\">what to expect before going to court in Thailand<\/a>.<\/p>\n\n\n\n<h2 id=\"contract-security-bonds-retention-and-what-to-insist-on\" class=\"wp-block-heading\">Contract security: bonds, retention, and what to insist on<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Thailand has no compulsory standard form for private work. Public projects must use the standard agreement issued under the Public Procurement and Supplies Administration Act B.E. 2560, and contractors generally cannot alter significant terms without approval from the Office of the Attorney General. Private developments are a free market. You draft what you can negotiate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">FIDIC forms do get used on larger and internationally financed projects. But the Dispute Adjudication Board mechanism at the heart of FIDIC is not a functioning interim route in Thailand. If amicable discussion fails, you go straight to court or arbitration. Treat the DAB clauses as something to be adapted, not imported.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Security instruments in normal use:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Bid bond.<\/strong>&nbsp;Protects you during tender if the winning bidder refuses to sign.<\/li>\n\n\n\n<li><strong>Performance bond.<\/strong>&nbsp;Bank guarantee during the contract term, typically 5% to 10% of contract value. On-demand wording is worth fighting for.<\/li>\n\n\n\n<li><strong>Retention.<\/strong>&nbsp;Standard practice, usually 5% to 10% of each payment, released in stages after handover and at the end of the defects period. Section 599 gives you a statutory right to withhold remuneration for delay or defective delivery, unless the contractor provides proper security. Retention is how you make that right practical.<\/li>\n\n\n\n<li><strong>Advance payment guarantee.<\/strong>&nbsp;If you are funding mobilisation, get a bank guarantee for the full advance, reducing as the advance is recovered.<\/li>\n\n\n\n<li><strong>Parent company guarantee.<\/strong>&nbsp;Useful where the contracting entity is thinly capitalised. Common in Thailand, and often the only meaningful covenant.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practice point.<\/strong>&nbsp;Check who the contracting entity actually is. Thai construction groups often contract through small subsidiaries. Run a company search, look at registered capital and filed financials, and price the risk accordingly. Supreme Court Decision No. 1471\/2564 involved a contractor who signed a construction contract while personally bankrupt and concealed it. Verification is cheap. Recovery is not.<\/p>\n\n\n\n<h2 id=\"the-draft-construction-payment-law-what-is-coming\" class=\"wp-block-heading\">The draft construction payment law: what is coming<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Right now there is no statutory security of payment regime in Thailand. Pay-when-paid clauses in subcontracts are enforceable under freedom of contract. The result is familiar: cash stops at the top of the chain and the pain lands on subcontractors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A draft bill on the settlement of disputes relating to payment under construction contracts is working through public hearings. It has not been enacted. If it passes in its current shape, the effects are significant:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It applies to written construction contracts, including consultancy agreements, where works are performed wholly or partly in Thailand. Choice of foreign governing law will not switch it off.<\/li>\n\n\n\n<li>Clauses attempting to contract out of it are void.<\/li>\n\n\n\n<li>Pay-when-paid clauses are prohibited, along with terms making payment contingent on the owner&#8217;s funding.<\/li>\n\n\n\n<li>A statutory right to refer payment disputes to adjudication, with an award targeted at around 40 days.<\/li>\n\n\n\n<li>Payment within 15 days of the award, with no appeal against the payment obligation. The award binds but is not final, so court or arbitration can still follow.<\/li>\n\n\n\n<li>An unpaid creditor may suspend works in proportion to the unpaid amount for up to 30 days.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If you are drafting a long-programme contract now, build in a review mechanism. A payment regime that voids your subcontract terms mid-project is not something you want to discover late.<\/p>\n\n\n\n<h2 id=\"protecting-a-construction-project-in-thailand-a-practical-sequence\" class=\"wp-block-heading\">Protecting a construction project in Thailand: a practical sequence<\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Confirm you can build before you buy.<\/strong>&nbsp;Zoning, setbacks, elevation limits, environmental assessment triggers. Title is not permission.<\/li>\n\n\n\n<li><strong>Fix the ownership vehicle.<\/strong>&nbsp;Land, structure, and the right to build may sit in different hands. Superficies or a registered lease gives the foreign party a real right in the building.<\/li>\n\n\n\n<li><strong>Hold the permit yourself.<\/strong>&nbsp;Landowner or holder of the registered right to build. Never the contractor.<\/li>\n\n\n\n<li><strong>Contract in writing, bilingually.<\/strong>&nbsp;Name the controlling language. If Thai controls, get your own translation before signing, not after.<\/li>\n\n\n\n<li><strong>Define acceptance.<\/strong>&nbsp;Say what completion means, what documents accompany it, and that occupation does not amount to acceptance. Section 598 makes this critical.<\/li>\n\n\n\n<li><strong>Price the programme.<\/strong>&nbsp;Milestones tied to verified physical progress, liquidated damages for delay, and a written variation procedure with no verbal instructions.<\/li>\n\n\n\n<li><strong>Take security.<\/strong>&nbsp;Performance bond, retention, advance payment guarantee, parent guarantee where the covenant is weak.<\/li>\n\n\n\n<li><strong>Insure properly.<\/strong>&nbsp;Contractors all risks, third-party liability, both parties named. Sections 603 and 604 will not rescue you.<\/li>\n\n\n\n<li><strong>Document everything.<\/strong>&nbsp;Site diaries, dated photographs, written instructions, minuted meetings. You will be proving causation later.<\/li>\n\n\n\n<li><strong>Act inside the clock.<\/strong>&nbsp;The moment a defect appears, diarise the Section 601 date and take advice. Negotiation does not stop time running.<\/li>\n<\/ol>\n\n\n\n<h2 id=\"frequently-asked-questions\" class=\"wp-block-heading\">\u0e04\u0e33\u0e16\u0e32\u0e21\u0e17\u0e35\u0e48\u0e1e\u0e1a\u0e1a\u0e48\u0e2d\u0e22<\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list\">\n<div id=\"faq-question-1785458385284\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Does a construction contract in Thailand have to be in writing?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>No. A hire of work contract is valid even if it is oral. But you will struggle to prove scope, price, and programme without a written document. Always put it in writing.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458387414\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">How long is a contractor liable for defects in Thailand?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Section 600 gives one year from delivery for general work. It gives five years for a structure built on land, unless the structure is a wooden building. Your contract can set a different period.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458408614\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">How long do I have to sue my contractor after a defect appears?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Section 601 bars an action one year after the defect appeared. That clock starts when the defect shows up, not when the warranty ends. Miss it and the five-year period in Section 600 will not save you.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458420747\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Can I cancel a construction contract in Thailand if I change my mind?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Yes. Section 605 lets you terminate at any time before the work is finished. You must compensate the contractor for the loss your termination causes.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458423031\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Can a foreigner own a construction company in Thailand?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Construction is restricted under List 3(10) of the Foreign Business Act B.E. 2542. A foreign-majority company needs a foreign business licence, or minimum capital of THB 500 million for qualifying public infrastructure work.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458453314\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Is arbitration better than court for a Thai construction dispute?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Usually yes for cross-border projects. Arbitration can run in English and awards travel under the New York Convention. Thai court proceedings run in Thai and pass through three tiers.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458467881\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Are pay-when-paid clauses enforceable in Thailand?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>For now, yes. There is no statutory security of payment regime in force. A draft construction payment bill would void those clauses, but it has not been enacted.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458482181\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Who applies for the building permit, me or my contractor?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>The permit should sit with the landowner or the party holding the registered right to build. Do not let the contractor hold it. If the relationship breaks down, your permit walks out the door.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458494648\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">What if my neighbour&#8217;s construction damages my building?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>That is a tort claim under Section 420, not a contract claim. In Supreme Court Decision No. 4269\/2565 a school recovered against a condominium developer whose piling and demolition works damaged its buildings.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1785458531548\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question\">Can I withhold payment if the work is defective?<\/h3>\n<div class=\"rank-math-answer\">\n\n<p>Yes. Section 599 lets you withhold remuneration for late or defective delivery. The contractor can unlock it by providing proper security instead.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<h3 id=\"are-pay-when-paid-clauses-enforceable-in-thailand\" class=\"wp-block-heading\">ThaiLawOnline \u0e2a\u0e32\u0e21\u0e32\u0e23\u0e16\u0e0a\u0e48\u0e27\u0e22\u0e40\u0e2b\u0e25\u0e37\u0e2d\u0e04\u0e38\u0e13\u0e44\u0e14\u0e49\u0e2d\u0e22\u0e48\u0e32\u0e07\u0e44\u0e23<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">We have practised in Thailand for 20 years, and construction files are among the most document-heavy we handle. What decides them is rarely a clever legal argument. It is whether the paperwork was right before the trouble started.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We draft and review bilingual construction and design contracts. We run&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/due-diligence-in-thailand\/\">pre-purchase and pre-construction due diligence<\/a>. We structure ownership so the foreign investor holds a real right in the building. And we act in&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/what-to-know-before-you-go-to-court-in-thailand\/\">\u0e01\u0e32\u0e23\u0e14\u0e33\u0e40\u0e19\u0e34\u0e19\u0e04\u0e14\u0e35\u0e41\u0e1e\u0e48\u0e07<\/a>&nbsp;\u0e41\u0e25\u0e30&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/business-law-in-thailand\/\">business litigation<\/a>&nbsp;when a project goes wrong. Our&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/condo-lawyer-in-thailand\/\">property law team<\/a>&nbsp;handles the land side, from&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/title-deeds-in-thailand\/\">title deed verification<\/a>&nbsp;\u0e16\u0e36\u0e07&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/buying-a-house-in-thailand\/\">buying or building a house in Thailand<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If a defect has already appeared, do not wait.&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/book-consultation\/\">\u0e08\u0e2d\u0e07\u0e04\u0e34\u0e27\u0e1b\u0e23\u0e36\u0e01\u0e29\u0e32<\/a>&nbsp;\u0e2b\u0e23\u0e37\u0e2d&nbsp;<a href=\"https:\/\/www.thailawonline.com\/th\/contact-thailawonline\/\">\u0e15\u0e34\u0e14\u0e15\u0e48\u0e2d\u0e40\u0e23\u0e32<\/a>&nbsp;and we will tell you where you stand on the clock.<\/p>\n\n\n\n<h2 id=\"key-takeaways\" class=\"wp-block-heading\">\u0e1b\u0e23\u0e30\u0e40\u0e14\u0e47\u0e19\u0e2a\u0e33\u0e04\u0e31\u0e0d<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Thailand has no construction statute. Your build runs on hire of work rules at Sections 587 to 607 of the Civil and Commercial Code.<\/li>\n\n\n\n<li>Section 600 gives five years of defect liability for structures on land, one year for everything else, unless your contract says otherwise.<\/li>\n\n\n\n<li>Section 601 bars your claim one year after the defect appeared. It is the deadline foreign developers miss most.<\/li>\n\n\n\n<li>How you characterise the claim changes the limitation period. Defective workmanship pleaded as breach of contract can carry ten years under Section 193\/30.<\/li>\n\n\n\n<li>Accepting work without a written reservation waives delay claims and patent defects under Sections 597 and 598.<\/li>\n\n\n\n<li>Section 605 lets you walk away at any time, but you pay for it.<\/li>\n\n\n\n<li>The Building Control Act B.E. 2522 requires a permit for the exact approved scope, with locally specific zoning, setback, and elevation limits.<\/li>\n\n\n\n<li>Construction is restricted under List 3(10) of the Foreign Business Act, and engineering and architecture are separately restricted and separately licensed.<\/li>\n\n\n\n<li>There is no adjudication regime yet. A draft payment bill would change that and would void pay-when-paid clauses.<\/li>\n\n\n\n<li>For cross-border projects, arbitrate. Awards travel under the New York Convention. Thai court proceedings do not run in English.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.ocs.go.th\/\" target=\"_blank\" rel=\"noopener\">Better regulation for better life<\/a><\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>A client called us from Phuket last year. His villa was 70% built. The contractor had stopped work. He was [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3113,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"pmpro_default_level":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-3112","page","type-page","status-publish","has-post-thumbnail","hentry","pmpro-has-access"],"_links":{"self":[{"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/pages\/3112","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/comments?post=3112"}],"version-history":[{"count":12,"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/pages\/3112\/revisions"}],"predecessor-version":[{"id":4480,"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/pages\/3112\/revisions\/4480"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/media\/3113"}],"wp:attachment":[{"href":"https:\/\/www.thailawonline.com\/th\/wp-json\/wp\/v2\/media?parent=3112"}],"curies":[{"name":"\u0e14\u0e31\u0e1a\u0e40\u0e1a\u0e34\u0e25\u0e22\u0e39\u0e1e\u0e35","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}