What should a Mutual Termination Agreement include under Thai law?

1. Definitions and Interpretation
2. Termination by Agreement
3. Effect of Termination
4. Work in Progress
5. Final Settlement
6. Return of Property and Information
7. Release
8. Continuing Obligations
9. Warranties
10. Notices
11. Governing Law and Disputes
12. General

• Check the old agreement for a clause that says how it may be amended or terminated (for example, only by a document signed by directors). Sign this Agreement in the same way, through the same authorised signatories.
• List everything that must be returned (Clause 6.1). Clause 3.2 says that nothing else has to be returned, which replaces the usual rule of Thai law that the parties are restored to their former positions when a contract is terminated (Civil and Commercial Code section 391).
• List the terms of the old agreement that must continue, such as confidentiality and intellectual property (Clause 8.1). Terms you do not list end with the old agreement.
• If the old agreement is backed by a guarantee or other security, remember that releasing the debtor may also release the guarantor. If the final payment still needs security, obtain a new written guarantee.
• If there is a real dispute and both sides are giving up part of their claims to settle it, a compromise agreement is the better document.

• Both Parties confirm that nothing more is owed under the old agreement (Clause 5.1). Check your accounts before signing, because unpaid invoices you forget about may be lost under the release in Clause 7.- The final payment of … is due by … (Clause 5.1). Late payment carries interest at 5% per year (Clause 5.3).
• The amount includes any VAT. The Party receiving it must issue a tax invoice or receipt within 7 days. If the payment is a fee for services paid by a company, the payer may have to withhold tax; agree the net amount in advance.
• Each Party releases all claims under the old agreement on the Release Date, which is the Termination Date or, if there is a final payment, the date it is paid in full (Clause 7.1). The release does not cover fraud, wilful misconduct, gross negligence or personal injury (Clause 7.2).- Claims that arose before the Termination Date are preserved (Clause 7.1). Send any claim in writing without delay, and keep the evidence.

• Return property and documents within … Business Days (Clause 6.1) and keep a signed handover list.
• Return or delete the other Party's confidential information and personal data (Clause 6.3). A Party that keeps personal data because the law requires it must still protect it under the Personal Data Protection Act, and should record what it kept and why.
• Stop using the other Party's name and logo, and update websites and client lists (Clause 6.4).
• If the old agreement was registered with or notified to a government authority, or the other Party appears on your licence or permit, notify the authority that the agreement has ended.

• This Agreement is not an instrument listed in the Stamp Duty Schedule, so it does not carry stamp duty. If the old agreement was a hire of work on which stamp duty was paid on an estimated fee that turned out higher than the fees actually paid, ask the Revenue Department about reclaiming the excess.
• Keep this Agreement with the old agreement, the handover list, and proof of the final payment. A Thai court will need a certified Thai translation of any English document you rely on.

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-254761. If you reuse this content, please credit the author and link to the original.