Legal Transactions and Contracts
Testamentary
Testamentary refers to the expression of intent by an individual to determine provisions concerning assets, rights, obligations, or various affairs of the testator, with the purpose that it will produce legal effects upon the death of the testator.
The Civil and Commercial Code stipulates Testamentary to five types;
1. General Will (Civil and Commercial Code, Section 1656)
2. Holographic Will (Civil and Commercial Code, Section 1657)
3. Will by Public Document (Civil and Commercial Code, Section 1658)
4. Secret Will (Civil and Commercial Code, Section 1660)
5. Oral Will (Civil and Commercial Code, Section 1663)
According to the aforementioned provisions, when considering all five types of wills, it can be seen that the most secure types in terms of being least susceptible to challenges over their validity are the Public Document Will and the Secret Document Will. However, even though these types of wills provide the highest security and protection against disputes, they are not very popular in practice. This is because the testator needs to travel and execute them in the presence of the official authorities as stipulated by law.
In practice, the most commonly executed type of will is the General Will, as stipulated in the Civil and Commercial Code, Section 1656: “A will may be made in the following form, that is to say, it must be made in writing, dated at the time of making of will and signed by the testator before at least two witnesses present at the same time who shall then and there sign their names certifying the signature of the testator.
No erasure, addition or other alternation in such will is valid unless made in the same form as prescribed by this section.”
However, the General Will often leads to legal disputes among heirs. This might arise from individuals who do not receive inheritance according to the will and are discontented, subsequently seeking legal action to challenge the will in court. For example, the signature on the will is not genuinely the testator’s or arguing that the testator’s intent in making the will was not entirely genuine, among other reasons.
Essential criteria for making a will, as stipulated by the Supreme Court, are set forth in the Supreme Court’s judgments as follows:
1. A person who wants to create a will about property must be a property owner.
2. A person who intends to create a Will has to have an apperception.
3. If specific provisions in the will are unenforceable, those provisions will be rendered void.
4. Incorrect specification of the place where the will was made does not invalidate the will in any way.
Transferring Shares Contract
Transferring shares is not a matter where the shareholder can transfer them at will without any form or method. In other words, the transfer of shares must be done in accordance with the methods and criteria set out by the law. Following the Civil and Commercial Code, Section 1129: “Shares are transferable without the assets of the company unless, in case of shares entered in a name certificate, it is otherwise provided in the regulations of the company.
The transfer of shares entered in a name certificate is void unless made in writing and signed by the transferor and the transferee whose signatures shall be certified by one witness at least.
Such transfer is invalid as against the company and third person until the fact of the transfer and the name and address of the transferee are entered in the register of shareholders.”
Considering the legal provision in context and taking into account the judgments of the Supreme Court, it becomes evident that the criteria for transferring shares encompass the following main principles:
1. According to the Supreme Court judgment No. 1304/2515 stipulates if the transferor holds named shares as indicated in the share certificate, they must provide written notice to the company indicating their intention to transfer the shares to the transferee. The transferee must also send a written notice to the company expressing their intention to receive the transfer of said shares from the transferor. The purpose of these two documents is solely for the transferor and transferee to inform the company to facilitate the share transfer. This is similar to a share transfer agreement where the transferor and transferee sign together. Even if the transferee voluntarily buys the shares, if the transfer is not done in accordance with the format prescribed by the Civil and Commercial Code, Section 1129, paragraph two, the share transfer becomes null and void.
2. According to the Supreme Court judgment No. 3829/2564, it is stipulated in the Civil and Commercial Code, Section 1129, paragraph one, that Shares are transferable without the assets of the company unless, in case of shares entered in a name certificate, it is otherwise provided in the regulations of the company. And the defendant’s regulation no.1, clause 2 specifies that the company’s shares are named common shares. Clause 3 further stipulates that the transferring party must notify the original shareholders of such share transfers after 30 days. If no existing shareholders wish to accept the transfer, it can be transferred to an outsider, which also requires the approval of the company’s board of directors. Although defendant no.1 did not issue share certificates to each shareholder, once the shares of defendant no.1 were assigned a share certificate number, it is subject to Section 1129, paragraph one. The act of Mr./Ms. J transferring shares to defendant no.3, who is Mr./Ms. J’s child and not an original shareholder (but an outsider), without notifying the plaintiff and other original shareholders and depriving the plaintiff and other original shareholders of the opportunity to accept the share transfer from Mr./Ms. J. /Ms. J does not comply with these regulations within the time frame, which infringes on the regulation of defendant no.1. Therefore, the plaintiff has the right to sue to revoke the share transfer that violates this regulation as per the Civil and Commercial Code, Section 1129.
3. According to The Supreme Court judgment No. 14225/2558 establishes that Defendant No. 1 and Mr./Ms. P made a share transfer agreement with the three plaintiffs on 1 October 2547. Since the shares belonging to Defendant No. 1 and Mr./Ms. P, and Defendant No. 1, who was an authorized director acting on behalf of the company, was well aware of this matter from that day. It is considered that the company was informed of the said share transfer. The three plaintiffs could assert to the company that they were now shareholders, even if their names had not been registered in the company’s shareholder register. It is the duty of the said company’s directors to register the names of all three plaintiffs in the shareholder register. When the company called a general shareholder meeting, that meeting failed to notify and include the three plaintiffs. At the meeting, resolutions were made to amend the regulations concerning share classifications and redefine executive position qualifications, differing from the original provisions. This led the three plaintiffs, who couldn’t oppose the amendments and changes to the company’s regulations, to suffer damages. In this case, the three plaintiffs suffered losses and have grounds to file a lawsuit against the two defendants who are the company’s directors.
Loan contract
According to the Civil and Commercial Code Section 653 “A loan of money for a sum exceeding two thousand baht in capital is not enforceable by action unless there be some written evidence of the loan signed by the borrower.”
Legal principles and Supreme Court judgments have stipulated a loan of money, as follows:
1. A loan contract is considered complete only upon the delivery of the borrowed property
Supreme Court judgment 4684/2536 states that a loan contract is considered a used and gone. Therefore, the principles outlined in Section 650, paragraph two, must be followed: The loan contract is considered complete upon the delivery of the borrowed money, which may occur later.”
2. A loan of money for a sum exceeding two thousand baht is not enforceable by action, except there is some written evidence of the loan signed by the borrower (Section 650, Paragraph one). In borrowing money, there must be a written document as evidence. To use as evidence that when the lender signs written or the evidence of the loan has been returned, rejected, or renounced in that document. (Section 650, Paragraph two).
3. Loan delivery may involve direct delivery of money or proceeds from other debts and convert the new debts into loan debts.
According to Supreme Court judgment 10227/2551, the plaintiff and defendant no.1 agreed to jointly settle the legal debt, including interest owed by the first defendant to the plaintiff. It is considered that the plaintiff has duly delivered the borrowed money, as per the terms of the contract, to the first defendant to create a new contract. Consequently, the loan contract is legally deemed complete.”
4. A loan contract with no defined payment period represents an immediately due debt. Consequently, the lender possesses the right to demand immediate repayment from the borrower, as stipulated in Section 203, paragraph one. This situation allows the lender to enforce their right to demand repayment from the date of the loan contract. The statute of limitations commences from the day following the date of the loan contract and is set at 10 years, as indicated in Section 193/30.
5. The Evidence of the loan must be substantial enough to indicate that the money was borrowed. There is no need to have a sentence specifying the existence of the debt. Just stating that you have a debt obligation is enough. This can be done with a sentence stating: That money has been received and will be returned, or there is a clause stating that the borrower has a debt that must be paid to the lender.
According to Supreme Court judgment 6183/2556, In this case, the plaintiff sued to force the defendant to accept responsibility for the loan contract and, therefore, under the Civil and Commercial Code of Section 653, paragraph one, which requires evidence of the loan in writing, signed by the borrower. However, the documents that are evidence of the loan do not necessarily indicate that the defendant owes the plaintiff the loan. and the plaintiff can bring witnesses to explain that the debts specified in the document are debts arising from legal relations regarding the loan.
6. Interest must not be charged on unpaid interest, meaning interest must not be compounded. However, the interest remains overdue for not less than one year. In that case, the parties involved in the loan agreement may agree to compound the interest on the principal and then calculate interest on the compounded amount. Such an agreement, however, must be documented in writing.
7. The borrower or lender may receive items or other assets instead of money as equal to the market value of the goods or property at the time and place of delivery.
Sales Contract (condominium)
According to the Civil and Commercial Law Section 139 “Immovable property denotes land and things fixed permanently to land or forming a body in addition to that. It includes real rights connected with the land or things fixed to or forming a body with land.” Therefore, considering the said law, it can be considered that Immovable property is land, houses, and condominiums.
Condominiums are a type of Immovable property that has a large number of purchase and sale contracts made. The Immovable property sales contract must therefore be governed by the law that has laid down the criteria in the Civil and Commercial Code, Section 456 “A sale of immovable property is void unless it is made in writing and registered by the competent official. The same rule applies to ships or vessels of six tons and over, steam launches or boats of five tons and over, floating houses, and beasts of burden.” Therefore, the transaction will be void if condominiums are bought and sold without registering with the official. Not legally enforceable.
The immovable property or condominium sales contract must have complete details and text. That is, an immovable property sales contract or condominium sales contract must have complete details about the various transactions, such as The property being sold, the contracting party, the contracting party’s liability if a dispute regarding the sale arises later, etc.
The essential elements of entering an Immovable property (condominium) sales contract are as follows:
1. Must be registered with officials at the land office where the real estate is located. Therefore, it will be considered that the transfer of ownership has been completed according to law.
2. There is no need to do a purchase and sale agreement before entering into a sales contract. Because the law is not required, the parties can agree to do this together to have more confidence in continuing the sales contract.
3. In transferring ownership of Immovable property (condominium) there will be various expenses, including a transfer fee based on the appraised value or selling price at the rate of 2 percent (which may be changed due to government policy), Mortgage fee is 1 percent of the total mortgage amount, Stamp duty percentage rate 0.5 of the appraised price or selling price, Personal income tax will be deducted at source and a specific business tax of 3.3% in cases where the seller has owned the home for less than 5 years. But if it has been more than 5 years, specific business taxes will be paid according to the progressive rate.
Rental Contract
According to the Civil and Commercial Law Section 537: “A property rent is a contract whereby a person, called the letter (lessor), agrees to let another person, called the tenant (lessee), have the use or benefit of a property for a limited period of time and the tenant agrees to pay rent therefore.” Therefore, considering the above section, the following important details are required.
1. A contract that has to have two parties is a person, called the lessor, agrees to let another person, called the lessee, have the use or benefit of a property.
2. The lessor agrees to allow the lessee to use or receive benefits from the property in any way. Therefore, by this principle, the lessor does not have to own the ownership of the rental property.
3. The lessee agrees to pay rent from the use or benefit of the rented property.
4. A rental contract must always specify a rental period. However, the lease of real estate cannot be for more than 30 years if it falls into an exception to the law. The rental contract also has a time limit.
The principles of important property lease agreements that the Supreme Court has are as follows:
1. The rental contract no law states that the lessor must be the owner of the rented property.
2. The rental contract gives the right to use the land and buildings on the said land. But must bear the burden of paying remuneration to the landowner monthly in the form of a salary and annually in the form of dividends. The legal relationship between the land owner and the land user therefore meets the criteria for renting property.
3. The rental contract has that time limit. It will end when the contract period expires without prior notice.
4. A specially reciprocal contract, more than a rental contract, is only a right to claim. that are enforceable only between the contracting parties. It is not binding on anyone outside of the transferee.
5. The rights of the lessee are exclusive. The leasehold rights under the lease contract are extinguished when the lessee dies. and is not an inheritance to heirs.
6. The rental contract must bind the lessee even though the lessor is not the owner of the rental property.
Labor Contract
According to the Civil and Commercial Law, Section 575: “A hire of services is a contract whereby a person, called the employee, agrees to render services to another person, called the employer, who agrees to pay remuneration for the duration of the services.”
According to the Labour Protection Act B.E. 2541, “Hirer” means a person who agrees to hire a person to carry out any work, in whole or in part, for his or her own interest and to pay remuneration in return for the result of the work”
Considering the provisions of the above law, The labor contract therefore has the following important points:
1. A labor contract is a specific contract. It is an agreement between the employer and the employee, specifically stipulated in the contract in the form of hiring labor or making things according to the Civil and Commercial Code.
2. A labor contract is a reciprocal contract that creates debt for both parties. The employee has a debt to work for the employer. And the employer has to compensate the employee throughout the working time. The legal consequences are if one party fails to pay the debt. The other party also has the right not to pay the debt. However, most labor hires will use specific labor laws.
3. In a Labor contract, the law does not specify a form or evidence in writing; thus only the intentions of both parties match. It is considered that the labor contract has already been formed. Therefore, a labor contract may be formed by the evidence in a book. agreed verbally, or it can happen by default.
4. The essence of a labor contract lies in the parties involved. Neither party can transfer their rights and duties under the employment contract to someone else without the other party’s consent. If the employee dies, a labor contract terminates. The heirs cannot assume the rights and duties under the contract. However, in the case of the employer, if the essence of the labor contract is tied to the individual who is the employer, the contract will also be terminated upon their demise.
Other legal acts and contracts
In addition to the various legal acts and contracts mentioned above. Many legal acts and contracts have yet to be mentioned, such as mortgage contracts, pawn contracts, and grant contracts. Exchange contract, sales contract, hire purchase contract, Guarantee contract, Claim transfer contract, etc.