THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
6.23 Remedies/Damages for Breach For a landlord not in breach of contract, the remedies that a landlord may pursue include seeking compensation and pursuing specific performance of the agreement. Additionally, injunctive relief may be sought to prevent actions that obstruct contractual duties or exacerbate harm to the non-breaching party, or to enforce compliance with contractual obligations. Damages claims are generally confined to those resulting from the non-performance. However, the non-breaching party may demand damages stemming from special circumstances if they were foreseeable. Court intervention may adjust contractual damages if deemed excessive. A security deposit is usually held to protect the landlord should the tenant fail to meet its obli- gations. In addition, the landlord might require the tenant to provide a guarantor for the per - formance of the tenant’s obligations. Under certain conditions, the security deposit cannot legally exceed one-month’s rent. The form of the deposit is negotiable between the parties. 7. Construction 7.1 Common Structures Used to Price Construction Projects The following are the most common structures used to price construction projects. • Fixed price contract – a lump sum is paid for the completion of the work. The business risk lies with the contractor. • Cost plus contract – payment of actual expenses and costs on a reimbursable basis, plus percentage or fixed fee. The employer bears the risk.
7.2 Assigning Responsibility for the Design and Construction of a Project The liability for the design and build depends on the contractual arrangements of the parties. If the contractor in a design-build contractual rela - tionship assumes the responsibility for the whole project, such contractor will be the sole respon - sible party. However, if the owner employs dif - ferent entities in a design-tender approach, the design and construction will be performed by different parties. In that case, the responsibil - ity of the parties is divided according to their respective contractual performance. 7.3 Management of Construction Risk Indemnification is commonly used in construc - tion contracts. Parties also usually agree to limit their liability to a fixed amount or in the form of a waiver of consequential damages. Thai law implements consumer protection provi - sions in relation to agreements for the construc - tion of residential houses. Such contracts can - not include any exclusion or limitation of liability for breach of contract by the contractor. Further - more, warranty periods are specified and are not freely negotiable: liability for defects, such as five years for structure and one year for component parts and equipment, must be included in a con - sumer-related construction agreement. 7.4 Management of Schedule-Related Risk Parties typically manage schedule-related risks by implementing milestone payments. Such payments are connected to penalty payments in the case of a delay, but also include incentives for early completion. Furthermore, early termina - tion clauses are commonly agreed. Thai law provides for automatic penalty provi - sions (ie, regardless of whether these are includ -
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