What should a Dropshipping Agreement include under Thai law?

1. Definitions and Interpretation
2. Appointment and Relationship
3. Product Information and Listings
4. Stock and Availability
5. Customer Orders
6. Packing, Branding and Shipping
7. Title and Risk
8. Prices, Invoices and Payment
9. Product Warranty and Compliance
10. Defects, Returns and Refunds
11. Product Liability and Recalls
12. Customer Data
13. Intellectual Property
14. Confidentiality
15. Limitation of Liability
16. Term and Termination
17. Force Majeure
18. Notices
19. Governing Law and Disputes
20. General

• Under this Agreement the Retailer buys each Product from the Supplier when the Supplier accepts a Customer Order, and resells it to the Customer in the Retailer's own name (Clause 2.2 and Clause 5.3). The Retailer is therefore the seller that the Customer and consumer law look to first, for delivery, refunds and defects.
• Keep the arrangement genuine in practice: the Retailer sets its own prices, invoices Customers in its own name and handles Customer service. The Supplier's suggested retail price is only a recommendation (Clause 2.2). Fixing the Retailer's resale price or banning online sales can raise issues under the Trade Competition Act B.E. 2560 (2017), section 57.

• A store that sells to consumers online in Thailand is generally treated as a direct marketing business and must register with the Office of the Consumer Protection Board before it starts selling, and generally needs a commercial registration. The Supplier's registrations do not cover the Retailer.
• Many products need a Thai approval or a mandatory standard mark before they can be sold, for example food, supplements, cosmetics, drugs, medical devices, electrical appliances and toys. Ask for copies of the approvals before you list a Product (Clause 3.1 and Clause 9.3). Selling an unapproved product is an offence for the seller as well as the maker.
• Products sold to consumers in Thailand need Thai-language labels (Clause 6.4). Check the label before the first listing.You chose delivered duty paid (Clause 6.4). Several destinations require a foreign seller that collects import VAT or GST to register there, for example the European Union's import scheme, the United Kingdom and Australia. Agree with the Supplier who registers before the first parcel is sent.You chose that Customers pay import charges on delivery (Clause 6.4). Tell Customers clearly on the product and checkout pages, because unexpected charges are the main reason parcels are refused and returned.

• Thailand's Unsafe Products Liability Act B.E. 2551 (2008) makes the maker, the importer and the seller jointly liable to an injured consumer, without proof of fault (sections 4 and 5), and a term that excludes that liability towards consumers is void (section 9). Clause 11 only decides which Party finally pays between the Retailer and the Supplier.
• An indemnity is worth only what the Supplier can pay. Ask for the Supplier's product liability certificate every year and check that it covers the destinations you sell to (Clause 11.5).You chose no insurance clause. For products that can injure someone, ask the Supplier for a product liability certificate anyway.
• Do not describe a Product in the Store with claims that the Product Information does not support (Clause 3.4). Health, safety and performance claims that go beyond the Supplier's information are the Retailer's own risk (Clause 11.2).

• Consumers who buy online have a legal right to cancel and return goods: at least 7 days after receipt in Thailand, and 14 days in the European Union and the United Kingdom. The Retailer must honour that right even if the Supplier does not take the goods back.
• The Supplier takes back unused Products, including those returned under a legal right to cancel, less a restocking charge of …% (Clause 10.4). A restocking charge that is far above the real cost may be reduced by a court.The Supplier does not take back Products returned for a reason other than a defect (Clause 10.4). Budget for those returns, because the Retailer must still refund consumers who cancel.
• Keep evidence for every chargeback or marketplace refund that you pass on to the Supplier under Clause 10.5: the Customer's complaint, tracking records and photographs.

• The Retailer is the data controller of Customer data and the Supplier is its data processor (Clause 12). The Personal Data Protection Act requires a written agreement between them (section 40), which Clause 12.2 provides.
• Tell Customers in the Store's privacy notice that their delivery details go to the Supplier and its carriers, and name the countries if the Supplier is abroad (sections 28 and 29).
• The controller must generally notify the Personal Data Protection Committee of a data breach within 72 hours after becoming aware of it (section 37(4)), which is why the Supplier must report to the Retailer within 48 hours.

• No stamp duty is payable on this Agreement. A sale of goods is not an instrument listed in the Stamp Duty Schedule of the Thai Revenue Code, and the Retailer buys and resells in its own name, so there is no appointment of an agent.
• If someone signs for a Party under a power of attorney made in Thailand, the power of attorney carries stamp duty of 10 THB for a single act or 30 THB for more than one act (Instrument 7).

• A Thai VAT-registered Supplier charges VAT on its sales to the Retailer and issues tax invoices (Clause 8.1). A Thai VAT-registered Retailer charges VAT on its own sales to Customers. Goods shipped out of Thailand are generally zero-rated if the exporter keeps the export documents that the Revenue Department requires.
• The price of goods paid to a Supplier abroad is normally not subject to Thai withholding tax. Clause 8.8 still lets the Retailer deduct any tax that the law requires.
• Customs forms must state the true value and description of every parcel (Clause 6.4). Under-declaring to reduce import duty is unlawful and can lead to seizure.

• Late payment interest under Clause 8.6 is agreed at …% per year. The statutory default rate for money debts is 5% per year (Civil and Commercial Code section 224), and a Thai court may reduce an agreed amount that it finds excessive (section 383).

• The signed Agreement with Schedule 1 and every price-change or discontinuation notice (Clause 4.3 and Clause 8.2).
• Each Customer Order, the acceptance or rejection, tracking references, invoices and payment slips.
• Defect reports with photographs, return records and credits (Clause 10), and the Product Information and certificates received (Clause 3).

• A company should sign through the director or directors authorised in its latest company affidavit or, for a foreign company, the equivalent document from its home country. Clause 20.8 allows electronic signatures and signed PDF copies.
• A Thai court works in Thai. A Party that relies on this Agreement, or on English emails, in a Thai court must file a Thai translation certified as accurate. If the Supplier has no assets in Thailand, an arbitral award is usually easier to enforce abroad than a Thai judgment.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-922D9B. If you reuse this content, please credit the author and link to the original.