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Thai Construction Contracts: Key Clauses to Know
Thai construction contracts are governed by CCC §587-607 (hire of work) plus standard-form contracts (PMI, FIDIC, government Por.Ror.). Foreign-invested projects commonly use FIDIC; this guide covers the key clauses.
TL;DR
Thai construction contracts are governed by Civil and Commercial Code §587-607 (hire of work) plus standard-form contracts. Government projects use the Por.Ror. (provincial) and standard government-procurement forms under the Public Procurement Act B.E. 2560 (2017). Private projects commonly use bespoke contracts; foreign-invested projects often adopt FIDIC Red / Yellow / Silver Book with Thai-law-compatible amendments.
Key Clauses
| Clause | Common Thai issues |
|---|---|
| Scope of work | Specify drawings, specs, performance criteria |
| Payment terms | Milestone-based; advance + progress + retention |
| Time + delay | Variation orders; EOT mechanism; LDs cap |
| Contractor licensing | Construction permits + B.E. 2522 Building Control Act |
| Defects liability | 1-year statutory + contractual extensions |
| Dispute resolution | Often arbitration via TAI / THAC + mediation step |
| Force majeure | Including pandemic / political-event drafting |
| Termination for convenience | Allowed; specify compensation |
Performance Bond / Retention
- Performance bond commonly 5-10% of contract value.
- Retention 5-10% per progress payment, released at handover / DLP.
- Bank guarantees vs cash retention.
Insurance
- Contractor's All-Risks (CAR).
- Workmen's Compensation (mandatory).
- Third-party liability.
- Professional indemnity (for design-build).
Common Mistakes
- No Variation Order procedure — disputes on scope creep.
- Unbalanced LDs — courts may reduce under CCC §379.
- Skipping Building Control Act compliance check.
FAQs
1. FIDIC vs Thai standard?
FIDIC familiar to international parties; Thai-law clauses needed for compatibility.
Related Reading
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