Thailand currently in the process of drafting Liability for Defective Goods Act

Following the approval in principle of the draft Liability for Defective Goods Act (“Draft Act”) in 2022, the public hearing for this Draft Act was recently concluded on 26 June 2024. With the aim of enhancing consumer protection in Thailand, the Draft Act stipulates that business operators will be held liable for defective goods. At first glance, this concept may appear similar to the existing Product Liability Act B.E. 2551 (2018), which holds manufacturers, importers or distributors liable for damages caused by unsafe products that affect the life, health, wellbeing or property of a person. However, the Draft Act specifically protects the right of the buyer from defective goods where the defect is difficult for a buyer to detect at the time of purchase or delivery. The Draft Act covers defects that lead to a reduction in value for their intended purpose as stipulated in the contract, as well as defects that cause a product to be unusable for the purpose informed to the buyer before purchase of the goods.¹

Additionally, the Draft Act proposes a more detailed framework for liability than the Civil and Commercial Code, including a broader definition of 'buyer' to encompass transferees and those succeeding to such rights from the buyer.²

The scope of this Draft Act will be applied to sale and purchase, exchange³ and hire-purchase⁴ contracts. The Draft Act will also set a general provision to be applied to general products, as well as a specific provision to apply to: (1) cars and motorcycles; (2) electrical appliances, electronic devices and mechanical devices; and (3) other products specified later in a royal decree.⁵

The main points of the Draft Act are as follows: 

The Draft Act primarily applies to new products because the government believes consumers should have the right to expect high-quality products. Sellers responsible for used products, living animals, and other products that will be specified at a later date, are not included in the Draft Act.⁶

Any agreements between the seller and buyer that are made before the buyer discovers the defective products, which differ from the Draft Act and impose burdens or disadvantages on the buyer, are considered void.⁷

A seller will be liable for defects that exist at the time of delivery, and if the goods are found defective within six months of delivery, presumed liability is applied.⁸ For cars, this period is extended to one year, which means that the seller will also be liable for any defect arising in the products within the said period.⁹ For electrical appliances, electronic devices and mechanical devices, if a significant defect is found within fourteen days from the delivery date, the buyer can request the replacement of a new product, whereupon the seller must replace the product with a new, unused product of the same version and kind.¹⁰

The buyer has the following rights to request the seller to take the following actions with regard to defective goods:¹¹

•  Repair the goods; 
• Replace the goods with a new, unused product of the same version and kind;  
• Reduce the price of the goods; and
• Terminate the contract. 

In addition to the liability for the defectiveness of goods, the seller must also be responsible for the installation or assembly of such goods if it is incorrect to the manual provided, as well as for components or accessories that are installed along with the product during the purchase period, even if they are at the buyer's request.¹²

The prescriptive period under the Draft Act is within one year from the buyer’s discovery of the defect, or from when the seller agrees to repair, replace or reduce the price of the defective goods.¹³ In case of cars, motorcycles, electrical appliances, electrical devices and mechanical devices, the prescriptive period is within two years from the buyer’s discovery of the defect, or from when the seller agrees to repair, replace or reduce the price of the defective goods.¹⁴

As the Draft Act remains under review and is subject to ongoing revisions, the information provided herein may be subject to change. It is advisable to monitor any amendments to the Draft Act prior to the enactment of its final version.

Nuttaros Tangprasitti
Partner
Sarinee Kaewpradit 
Associate

Authors