Breach of international trade contracts and fraud are two types of cases that may appear similar, as in both situations the injured party does not receive payment for goods or does not receive the goods within the agreed timeframe. However, there are significant differences between the two, particularly in their key legal aspects. Our litigation lawyers and dispute resolution attorneys in Thailand at Herrera and Partners H&P have prepared a summary of the differences and similarities of these two types of court cases under Thai Law.
A breach of international trade constitutes a breach of contract under civil law. In such cases, the counterparty is typically a legitimate entity that genuinely operates a business, submits authentic documentation, and engages in actual commercial transactions. However, the party fails to deliver the goods or make payment within the agreed timeframe.
In contrast, fraud is a criminal offense. The perpetrator has the intention to deceive from the outset. Indicators of fraud may include the non-existence of the company, the absence of genuine business operations, or the use of nominee bank accounts established solely for fraudulent purposes.
In practice, lawyers assess multiple factual elements when preparing a case. This includes reviewing documents such as invoices, purchase orders, and bills of lading, as well as conducting background checks on the relevant company. Based on these findings, they determine the appropriate legal course of action.
Importantly, as mentioned above, breach of contract is a civil matter, whereas fraud constitutes a criminal offense. The two types of cases differ significantly in terms of procedural law and limitation periods.
For breach of international trade contracts, the statute of limitations is governed by the Civil and Commercial Code and may vary depending on the circumstances, such as 10 years, 5 years, or 2 years.
For example, in cases where there is a written agreement, lawyers will examine the contractual terms and related documents to determine the parties’ intentions, whether the contract complies with legal requirements, and what remedies are available to the client in the event of breach. These remedies may include contract termination, return of guarantees, forfeiture of deposits, and other legal consequences. Lawyers must also strategically structure the case to maximize both factual and legal advantages.
On the other hand, fraud under the Criminal Code is a compoundable offense. Therefore, a complaint must be filed within three months from the date the injured party becomes aware of both the offense and the identity of the offender, in accordance with Section 96 of the Criminal Code. The complaint must be lodged with a police officer within this limitation period, which is significantly shorter than that for civil cases.
In court proceedings for both types of cases, if the client has a representative in Thailand and wishes for that person to initiate and conduct the case on their behalf, a Power of Attorney (POA) must be executed. The document must be signed by the principal (or affixed with the company seal, in the case of a corporate entity), notarized, and legalized to be valid for legal proceedings. Supporting documents must also be authenticated, such as proof of payment.
Procedurally, breach of contract cases is governed by the Civil Procedure Code, whereas fraud cases are governed by the Criminal Procedure Code. The processes differ in several respects, including timelines for filing pleadings, drafting complaints, submission of witness lists, and the burden of proof.
In civil cases, documentary evidence is often the most critical, as certain types of contracts must be proven through written evidence to establish their validity. In criminal cases, however, courts tend to place greater weight on eyewitness testimony, as it reflects direct experience of the alleged offense.
In this regard, the preparation of documentary evidence, witness testimony, and physical evidence in both types of cases must align with the issues in dispute and support the client’s legal position.
If you want to consult with a law firm in Thailand regarding breach of commercial contracts or a fraud case, please contact our litigation lawyers in Bangkok at info@herrera-partners.com
