Section 379 — Penalty clause: forfeiture on default or non-performance
Statutory text (Thai original)
ถ้าลูกหนี้สัญญาแก่เจ้าหนี้ว่าจะใช้เงินจำนวนหนึ่งเป็นเบี้ยปรับเมื่อตนไม่ชำระหนี้ก็ดี หรือไม่ชำระหนี้ให้ถูกต้องสมควรก็ดี เมื่อลูกหนี้ผิดนัด ก็ให้ริบเบี้ยปรับ ถ้าการชำระหนี้อันจะพึงทำนั้นได้แก่งดเว้นการอันใดอันหนึ่ง หากทำการอันนั้นฝ่าฝืนมูลหนี้เมื่อใด ก็ให้ริบเบี้ยปรับเมื่อนั้น
Verbatim from the Royal Gazette / Office of the Council of State
English translation
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.
This English translation is provided for reference only and has not yet been firm-verified — always rely on the Thai original.
Firm annotation
Section 379 is part of Book 2 (Obligations) of the Thai Civil and Commercial Code. This entry is awaiting firm-authored commentary; the statutory text above is verbatim from the Office of the Council of State (OCS Krisdika) Thai source, with the English translation from the FAO/UN FAOLEX repository. Always rely on the Thai original for legal proceedings.
Why this matters in practice
For lawyers: a default-interest clause at an elevated rate is treated as a penalty and may be reduced under Section 383 if excessive. For laypersons: if you agree to pay extra interest if late, that clause is enforceable but a court can reduce it if it is unreasonably high.
Legislative history
Part of the original Civil and Commercial Code codification; no major subsequent amendment.
Supreme Court decisions interpreting this section
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Supreme Court Judgment No. 2623/2549 (2006)
A contractual default interest rate that exceeds the ordinary rate constitutes a penalty clause subject to judicial reduction under Sections 379 and 383.
An elevated default interest rate stipulated in a loan agreement was treated as a penalty under Sections 379 and 383; if disproportionately high, the court may reduce it to a reasonable amount.
Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.