What is the meaning of “Loan Agreement” under Thai Law?
Loan Agreement is a contract between two parties the “Borrower/Debtor” and the “Lender/Creditor” in which the borrower is obliged to repay the amount in the specific time frame enclosed in the contract depending on the interest that has agreed upon based on the contract but should not exceed the interest rate that the law dictates.
What law governs a Loan Agreement?
Under the Section 653 of Civil and Commercial Code states that a loan of money for a sum exceeding two thousand baht in capital must have a written agreement for it is not enforceable by law in action unless there be some written evidence of the Loan Agreement signed by both the debtor and the creditor accompanied by a signed witness.
In an event that repayment of a loan money was not made by the debtor in a given time period the evidence in writing can be used to file a case by the lender against the borrower proving that an agreement has been breached, along with it any documents evidencing the loan money has been given to the borrower by the creditor can also be used for filling a legal lawsuit.
In terms of the time being for filling a case in the court, in accordance under section 193/30, stated that the complain of the creditor should be made and file to the court within ten years from the time that breached has been made in compliance to the signed agreement.
Whereas, for the side of debtor/borrower, in accordance to section 193/10 “after the lapse of the time period prescribe for claims by the creditor, the debtor may have the rights or entitled to refuse to follow of what has agreed upon.