Legal Problems Relating to Agreement for Hire – Purchase of Machinery

Abstract

          This thesis had the objective to study and analyze the problems of hire-purchase contract of machinery in Thailand which had legal issues in making hire-purchase contract of machinery that had unfairness in hire-purchase contract of machinery in Thailand and found the problems in the provision of the Civil and Commercial Code on hire-purchase contract.

          From the study, it was found that Thailand had law governing the current hire-purchase which was outdated. The Civil and Commercial Code, Chapter 3 Specific Contracts, Category 5 Hire-purchase Section 572 to Section 574. There were only 3 sections. The last amendment was in 1932 and it had been enforced up to the present. We could see that the existing provision on hire-purchase was not sufficient to enforcement so other provisions in the Civil and Commercial Code were used as applicable such as the provision on lease of property and the provision on purchase and sale to close the law gap. After various legal provisions were applied, it still caused problems in enforcement due to the condition of Thailand which was quickly growing and the problem of the bailers who had financial control and more power than the hirers. Therefore, the bailers were the ones who specified the terms and conditions in the hire-purchase contract in advance in the form of ready-made contract and the hirers had not bargaining power or objecting the right and duty of the hirers and if the hirers defaulted the contract and did not pay the installments, the bailers brought the case to the court, the hirers had no chance of objecting his right and duty so the hirers surrendered themselves to the liability in the contract with unfairness of terms and conditions in the hire-purchase contract of the bailers which is inconsistent with freedom of intent of contract parties causing the hirers become disadvantages in contract.

          Therefore, this thesis recommended that there should be improvement of the legal criteria and procedure relating to hire-purchase of machinery for clarity and could be enforced with other properties similar to machinery. The law should specify the right and duty of the bailers and hirers, liability, damage remedy, contract termination period and method of selling at auction in order to be applied in the dispute of hire-purchase of machinery and could bring fairness to bailers and hirers equally.