Seven business contracts Thai SMEs sign most often: what to check before signing
What to read before signing an employment contract, a services contract, a lease, a sale-of-goods contract, a distribution agreement, an NDA, and a shareholders' agreement.
Zura Labs & Business Hub Co., Ltd.
Thai SMEs meet seven contract types repeatedly, and all of them deserve the same six checks: the parties and their signing authority, the scope of work or goods, payment and acceptance terms, liability and its limits, termination rights, and governing law with the dispute mechanism. What causes trouble later is rarely the price — it is vague acceptance criteria and signing authority that does not match the company affidavit.
Reviewed 2026-09-21 by the Zura Labs corporate services team.
- 1. Employment contract
- Check role, pay, probation, working time, termination, and any non-compete that must be reasonable in scope
- 2. Services contract
- Check scope, deliverable acceptance criteria, revision rounds, and who owns the IP on full payment
- 3. Lease
- Check term, deposit, renewal, common-area costs, and the right to use the address for company registration
- 4. Sale of goods
- Check where title and risk pass, delivery terms, inspection rights, and warranty
- 5. Distribution agreement
- Check territory, exclusivity, sales targets, and what happens if targets are missed
- 6. NDA
- Check the definition of confidential information, the term, carve-outs, and return or destruction duties
- 7. Shareholders' agreement
- Check voting, capital increases, pre-emption rights, exit routes, and day-to-day management authority
How this works in practice
- 01
Confirm who the counterparty is and who may sign
Ask for the counterparty's affidavit to see the full name, authorised signatories and signing conditions. A signature from an unauthorised person makes enforcement messy.
- 02
Write scope in measurable terms
List deliverables, quantities and acceptance criteria. Avoid phrases like industry standard or until the client is satisfied.
- 03
Tie payment to verifiable milestones
Set milestones, required documents, credit terms and late interest, and state clearly who bears withholding tax and VAT.
- 04
Check liability caps and exclusions
Ensure the cap is proportionate to contract value and the exclusions are not so broad that the other side owes nothing.
- 05
Agree the exit before work starts
Set termination grounds, notice periods, payment for work already done, data return, and governing law.
Reasons this gets delayed or rejected
Using a foreign template wholesale
Some clauses conflict with Thai labour or civil law and remain unenforceable even after both sides sign.
Thai and English versions differ
A bilingual contract should state which version prevails; otherwise disputes start with a translation argument.
No acceptance evidence
Finished work without a delivery note or written confirmation makes the final invoice hard to collect.
Answers to the questions we hear most
Do contracts need stamp duty?
Certain contracts, such as leases and hire-of-work agreements, fall under the stamp duty schedule. Check the category and pay it correctly.
Are electronic signatures valid?
Thai law recognises electronic signatures subject to conditions, but documents that must be registered or certified still need paper originals.
How enforceable is an employee non-compete?
Courts weigh whether the duration, scope of work and territory are reasonable. Overly broad clauses may be narrowed or not enforced.
Do co-founders who are friends need a shareholders' agreement?
This is exactly when it matters most: verbal understandings become disputes the moment one founder wants out.
This is general preparation information, not case-specific legal or accounting advice. Government fees, processing times and conditions change with official announcements. We review each guide on a schedule and show the review date on the page.