Cabinet Approves Draft Act on Liability for Defective Goods

The Draft Act is intended to supplement the existing provisions of the Thai Civil and Commercial Code, particularly where a defect is latent or cannot reasonably be identified at the time of purchase or delivery. The Draft Act has not yet become law and may be amended during the legislative process.

Key Scope of the Draft Act
The Draft Act would apply to a “seller,” meaning a person who sells goods in the ordinary course of business. A “buyer” would include not only the original purchaser but also a transferee or successor in title to the goods.
Accordingly, the Draft Act may apply to both business-to-consumer (B2C) and business-to-business (B2B) transactions.
The Draft Act would cover several types of arrangements, including:

Sale and purchase agreements;
Hire-purchase agreements;
Sales involving third-party financing; and
Exchange agreements.

The Draft Act is generally intended to apply to contracts entered into before its effective date. However, it would not apply to used goods, live animals, or other goods to be prescribed by Ministerial Regulations.

Presumption of Defect at Delivery
If a defect is discovered within the applicable period, the goods would be presumed to have been defective at the time of delivery.
The applicable periods would be:

General goods: within 6 months after delivery;
Automobiles: within 1 year after delivery; and
Motorcycles: within 6 months after delivery.

This presumption would shift the burden or prove to the seller and may make it easier for buyers to pursue remedies where a defect appears shortly after delivery.

Buyer Remedies and Seller Liability
The Draft Act would provide a structured set of remedies, including repair, replacement, reduction of the purchase price and termination of the purchase contract. The available remedy would depend on the type of goods, the seriousness of the defect and whether the requested remedy would impose an unreasonable burden on the seller.

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