What should a Raw Materials and Components Supply Agreement include under Thai law?

1. Definitions and Interpretation
2. Supply Framework
3. Term
4. Specifications and Process Changes
5. Forecasts and Capacity
6. Orders
7. Safety Stock
8. Delivery, Risk and Title
9. Inspection and Acceptance
10. Quality, Certificates and Traceability
11. Warranty and Remedies
12. Prices and Price Adjustment
13. Invoicing and Payment
14. Taxes
15. Supply Continuity
16. Late Delivery
17. Compliance and Responsible Sourcing
18. Product Liability, Recall and Indemnities
19. Limitation of Liability
20. Insurance
21. Confidentiality
22. Personal Data
23. Force Majeure
24. Termination
25. Consequences of Termination
26. Notices
27. Governing Law and Disputes
28. General

• Sign Schedule 1 on every page, together with the datasheet, drawing or approved sample it refers to, and keep a sealed approved sample of each Good. Under Clause 4.1 the Goods must match both; the version you can prove is the one that counts.
• Send the Supplier a signed letter naming the persons authorised to place Orders (Clause 6.1). Orders by chat message from someone else are easy to dispute.
• If the Supplier is abroad, confirm who acts as importer of record and who pays import duty and import VAT. This follows the Incoterm in Clause 8.1: under DDP the Supplier clears the Goods into Thailand; under every other term the Buyer does.

• A sale of movable goods worth 20,000 THB or more cannot be enforced in a Thai court unless there is written evidence signed by the party to be held liable, a deposit or part performance (Civil and Commercial Code section 456). This signed Agreement is that evidence for every accepted Order made under it, so keep Order numbers and acceptances with it.
• Keep every change note (Clause 4.2), every approved Process Change (Clause 4.3), each certificate of analysis or conformity (Clause 10.2), inspection records and rejection notices with photographs (Clause 9.1).

• No stamp duty is payable on this Agreement. A contract for the sale of movable goods is not an instrument listed in the Stamp Duty Schedule of the Thai Revenue Code, so the original and the counterparts need no stamps.
• If someone signs for a Party under a power of attorney, the power of attorney itself carries stamp duty.

• A Thai VAT-registered Supplier charges VAT and issues a tax invoice for each delivery (Clause 14.1). Payments for goods between Thai companies are generally not subject to withholding tax, but transport or other services invoiced separately may be; ask the Supplier to show them on separate lines and check the rate with your accountant.
• Goods imported from abroad pay import duty and import VAT at customs. Withholding tax on payments abroad for goods is not normally required, but a separate fee for tooling, design or technical services may be treated differently; take advice before paying such a fee.

• You chose fixed prices for the Initial Term (Clause 12.2). The Supplier carries the risk of material costs; expect it to propose new prices before any renewal, and decide early whether you would rather end the Agreement.- You chose prices linked to a reference (Clause 12.2). Record in Schedule 2 the base value on which today's prices are set, and keep the published figures used for each adjustment. Adjustments work in both directions, so ask for a reduction when the reference falls.- You chose a yearly price review (Clause 12.2). Put the review date in your calendar at least 90 days before the end of each Contract Year.
• No price change applies to an Order already accepted, and the Supplier cannot add surcharges to invoices without your written agreement (Clause 12.3).

• The Supplier must replace or refund Goods that fail within the Warranty Period of … month(s) (Clause 11.2). Separately, a claim in court for defects in goods bought must be brought within one year after the defect is discovered (section 474), so give written notice and act promptly.
• Under the Unsafe Products Liability Act B.E. 2551 (2008), the maker of the finished product is liable to an injured person without proof of fault. A component maker can escape liability to that person if the unsafe condition came from the design, assembly, instructions or warnings of the finished product. Clause 18 only decides how the Parties share the cost between themselves.
• When you accept a late delivery and still want liquidated damages, reserve that right in writing on the delivery note or by email within the time in Clause 16.4. Accepting without reservation may lose the right.
• If the Supplier announces that a Good will be discontinued (Clause 15.2), start qualifying another source at once and place your last-time Order within the notice period.

• If you sell your products in markets with rules on restricted substances or on the origin of minerals, list those rules in Schedule 1. Clause 17.1 then obliges the Supplier to comply and to give you declarations and test reports; without the list, the Supplier's duty is limited to the law of its own country.
• Keep the Supplier's declarations and any audit reports for as long as your products are on the market. Many export customers now ask for evidence that there is no forced or child labour in the supply chain (Clause 17.2).

• 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, and affix the company seal if its rules require one.
• Clause 28.8 allows electronic signatures and signed PDF copies. Keep the final signed file unchanged, with both Schedules.
• A Thai court works in Thai, so a certified Thai translation of this Agreement and of English evidence is needed in a Thai case. If the Supplier has no assets in Thailand, a Thai judgment may be hard to enforce in its country; an arbitral award is usually easier to enforce abroad. Inspection on arrival, payment after delivery and a second approved source usually protect you better than a lawsuit.

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-DB9BBC. If you reuse this content, please credit the author and link to the original.