Minimum Comsideration

[Khutan]

Does anyone know the minimum consideration at law to make a contract enforcable ?

Normally its a nominal amount of money, does anyone know what it is ?

[meom]

Depends the type of contract. When it's business to business usually the company that accepts the contract has to come up with a performance bond, usually in the range of 10% of the contract value. In case they default on the contract they loose the performance bond and sometimes have to pay liquidated damages as well.

[Abandon]

for a marriage contract, the minimum is ALL OF IT ....

[chownah]

In the US an agreement to perform work is only valid if the person doing the work receives something of value in exchange for doing the work. The value transferred to the person doing the work is often referred to as "consideration". If you want to write a contract for work you can write " for ten dollars and other valuable consideration Joe Doe does agree to do......". This satisfies the legal requirement for "consideration" even if the ten dollars might be viewed as so small as to not qualify on its own as "consideration". An example: I hire Joe Doe to paint my house and he has a contract for me to sign stating he will paint my house for $1000. Before signing I ask him if he can paint my garage along with the house for the same price...he says yes...I say please add this to the contract...he writes at the bottom of the contract..."In addition I agree to paint the garage for free." We sign the contract, he finishes the house and does not paint the garage....I take him to court...the judge says that there was no consideration written into the contract to paint the garage so the part of the contract pertaining to the garage is not binding and Joe Doe is not required to paint the garage to collect for painting the house. If Joe Doe had written "I agree to paint the garage for $10 and other valuable considerations." then we would have had a binding agreement for the garage painting as well.

EDIT: This is the way its done in the US...I don't know how its done in Thailand.

Edited September 19, 2005 by chownah

[turtle rocks]

Unlike US, Thailand is using civil law which has a major difference in its legal method.

In general, Thai courts will enforce written contracts, using principles of contract law similar to those in western countries. We don't have a concept of 'consideration' though.

Instead of that, we're using 'obligation'. That's why a contract without consideration can be valid and enforceable.

[Dragonman]

Unlike US, Thailand is using civil law which has a major difference in its legal method.

In general, Thai courts will enforce written contracts, using principles of contract law similar to those in western countries. We don't have a concept of 'consideration' though.

Instead of that, we're using 'obligation'. That's why a contract without consideration can be valid and enforceable.

<{POST_SNAPBACK}>

Irrespective of this I would still advise a nominal consideration to be included in any contract. Whilst contracts can still be enforceable, judges have been known to include a market value figure in contracts where consideration is not specified. It of course depends what the contract relates to as to the significance of the consideration.

[Sumitr Man]

Dragonman:

The concept you mention can be found in Section 377 of the Civil and Commercial Code of Thailand:

If, on entering into a contract, something is given as earnest, this is deemed to be proof of the conclusion of the contract.

Not entirely sure what constitutes "earnest" from a contractual legal perspective, but from a Revenue Department perspective it has always been judged on market value.

SM

[chownah]

Dragonman:

The concept you mention can be found in Section 377 of the Civil and Commercial Code of Thailand:

If, on entering into a contract, something is given as earnest, this is deemed to be proof of the conclusion of the contract.

Not entirely sure what constitutes "earnest" from a contractual legal perspective, but from a Revenue Department perspective it has always been judged on market value.

SM

<{POST_SNAPBACK}>

I'm wondering if this means that if a contract calls out for a deposit (earnest money) and if that deposit is actually made then the contract is in effect. For example maybe this means that if a contract calls out for me to give my painter $100 of earnest money before the beginning of the work and we both sign then the contract is legally in effect as soon as I give the painter the earnest money. This is just an educated guess on my part. In the States when you buy a house and you want to start the negotiation process so that other people can not place bids on the house then you make the seller an offer and include some earnest money which is basically saying "I am serious enough about wanting to buy your house that I'm willing to deposit some of my money into an account and if you accept my offer and I back out for any reason other than those listed in my offer then you can keep the money." In this case the depositing of earnest money does not put the contract into effect so if my guess above is correct about the Thai law then it is markedly different than the house buying scenerio in the States. I hope someone who knows more posts to clarify this issue.

[Khutan]

That was my thoughts, if I am offered something at a very competative price, I would have thought I would have got a contract drawn thas was omething like:

This is to acknowledge that Khun X receives consideration of 10 Baht from Mattnich, to sign a contract of of sale of;(description of sale and price) to Mattnich.

Then they must sell what they have agreed.

Or can't you do this in Thailand.

[Sumitr Man]

Chownah:

What you posted makes absolute sense to me and I cannot see why it could not mean that.

I do know, however, from personal experience that the Revenue Dept. does not accpet zero consideration advisory contracts and taxed me on market rate. But that doesn't mean that the zero consideration contract was not enforceable as a legal contract <--- just that those SOBs at the Revenue Dept. play by their own rules

SM

[Dragonman]

Dragonman:

The concept you mention can be found in Section 377 of the Civil and Commercial Code of Thailand:

If, on entering into a contract, something is given as earnest, this is deemed to be proof of the conclusion of the contract.

Not entirely sure what constitutes "earnest" from a contractual legal perspective, but from a Revenue Department perspective it has always been judged on market value.

SM

<{POST_SNAPBACK}>

I'm wondering if this means that if a contract calls out for a deposit (earnest money) and if that deposit is actually made then the contract is in effect. For example maybe this means that if a contract calls out for me to give my painter $100 of earnest money before the beginning of the work and we both sign then the contract is legally in effect as soon as I give the painter the earnest money. This is just an educated guess on my part. In the States when you buy a house and you want to start the negotiation process so that other people can not place bids on the house then you make the seller an offer and include some earnest money which is basically saying "I am serious enough about wanting to buy your house that I'm willing to deposit some of my money into an account and if you accept my offer and I back out for any reason other than those listed in my offer then you can keep the money." In this case the depositing of earnest money does not put the contract into effect so if my guess above is correct about the Thai law then it is markedly different than the house buying scenerio in the States. I hope someone who knows more posts to clarify this issue.

<{POST_SNAPBACK}>

Yes your scenario is correct. The earnest money would establish the contract in the painter's case. My own opinion is that the concept of "earnest" is a device primarily used by realtors to serve their own needs. The concept is only recognised under some countries laws. USA use a lot unlike England & Wales where refundable deposits are used. House purchase contracts differ from normal contracts under most laws due to variables and such a contract would be void under western law. Never heard of such a contract being enforced under thai law, perhaps someone knows?

[Dragonman]

That was my thoughts, if I am offered something at a very competative price, I would have thought I would have got a contract drawn thas was omething like:

This is to acknowledge that Khun X receives consideration of 10 Baht from Mattnich, to sign a contract of of sale of;(description of sale and price) to Mattnich.

Then they must sell what they have agreed.

Or can't you do this in Thailand.

<{POST_SNAPBACK}>

Do not need anything complicated to form a contract.

I Mattnich offer a sum of 100 baht to Khun X for the purchase of his green black & Decker lawnmower which must be in good working order. The payment and transfer of goods to take place within 1 week.

Signed Mattnich

I Khun X accept the above offer and agree that on payment of 100 baht the goods will be transferred.

Signed Khun X

Receipt required when payment made, must be within timescale or contract void.

The problem may come in enforcement with the costs involved in a thai court.