Thailand’s cabinet has approved the draft Act on Liability for Defective Goods, commonly called Thailand’s “Lemon Law.” The Draft Act is currently pending consideration by Parliament.

The draft law aims to strengthen buyers’ position in pursuing cases against sellers. While the Civil and Commercial Code offers provisions governing liability for defective goods, it is difficult in practice for buyers to successfully make a claim against sellers, particularly where defects are latent and not discoverable at the time of sale or delivery. By introducing product-specific rules and clearer remedies, the new law is intended to modernize Thailand’s consumer protection framework and align it more closely with international standards, and to help relieve the buyer’s burden of proof against the seller in product liability cases.

If enacted, the draft act will take effect 180 days after publication in the Government Gazette, giving businesses a transition period to assess their compliance obligations.

This article provides an overview of the key provisions of the draft act and highlights some practical considerations for businesses operating in Thailand.

Scope and Key Definitions

The draft act applies to sellers—defined as persons who sell goods in the ordinary course of business—and protects buyers, a term defined broadly to include not just the original purchaser but also transferees and successors in title. This expands the class of people who can bring claims.

The law does not apply to used goods, live animals, or goods exempted by future ministerial regulation. It also leaves intact any separate warranties, promises, advertisements, or other guarantees a seller has given; those remain enforceable alongside the new statutory rights.

General Liability for Defective Goods

Sellers are liable for defects that exist at the time of delivery, regardless of whether the seller knew about them. Liability arises where a defect reduces:

• The benefit intended under the purchase contract;
• The goods’ normal intended use; or
• The benefit the buyer could reasonably expect based on product information published publicly by the seller or its representative.

On the third point, however, a seller can avoid liability if it can prove that the published information was corrected before the sale or that the information did not influence the buyer’s purchasing decision. Sellers are also liable for defects caused by incorrect or incomplete installation or assembly. Additionally, they are liable for defects in cases where the buyer installs or assembles the product in accordance with the manual, but the manual itself provides incorrect or incomplete instructions. Liability extends to instructions, and to components or accessories sellers install or provide at the time of sale, even if installed at the buyer’s request.

Presumption of Defect

A key feature of the draft act is a buyer-friendly presumption: if goods are found to be defective within six months of delivery, the defect is presumed to have existed at the time of delivery. This shifts the burden of proof to the seller and significantly strengthens the buyer’s position in any dispute.

The draft act also blocks sellers from contracting around these statutory protections. Any agreement made before the buyer discovers a defect that deviates from the draft act to the buyer’s detriment is void, preventing sellers from using standard-form disclaimers or presale waivers to limit their liability.

Remedies Available to Buyers

The draft act provides buyers with a structured set of remedies that may be available when the seller is liable for defects. The buyer may:

• Demand repair of the defective goods;
• Demand replacement with new goods of the same type and kind;
• Request a reduction of the purchase price; or
• Terminate the purchase contract (i.e., demand a refund less depreciation as specified in the draft act).

These remedies do not affect the buyer’s separate right to claim damages and reasonable expenses.

Each remedy comes with certain requirements:

• Repair: The seller must complete repairs within 60 days of receiving the goods. If the repair causes any deterioration of the goods, the buyer may claim damages or a reduction of the purchase price. The seller may elect to replace the goods instead of repairing, and if the seller cannot repair the goods within 60 days or refuses to do so, the buyer may request a reduction of the purchase price or terminate the contract.
• Replacement: The replacement item must be new, unused, and of the same type and kind. The seller can elect to repair first if replacement would create an unreasonable burden, but if the seller refuses both repair and replacement (or cannot repair within 60 days), the buyer may request a reduction of the purchase price or terminate the purchase contract.
• Purchase price reduction: The seller can opt to repair or replace first if a reduction to the purchase price would cause an unreasonable burden, but if the seller refuses all remedies, the buyer may terminate the contract.
• Purchase contract termination: When a buyer would like to terminate the contract, the notice in writing must be given to the seller within six months of the right to terminate arising. The seller may deduct depreciation for use when calculating the refund, but interest accrues on the refund from the date the seller originally received payment, and the buyer’s right to claim damages under section 391 of the Civil and Commercial Code is unaffected.

Whether a remedy creates an “unreasonable burden” depends on factors such as the type and value of the goods, the nature of the defect, and the time and cost involved in repair.

The remedy available also depends on how serious the defect is. For nonmaterial defects, the buyer must ask for repair before pursuing any other remedy. For material defects discovered within seven days of delivery, the buyer can skip straight to demanding replacement, and may terminate the contract if the seller refuses or cannot replace the goods.

Special Situations

The draft law also addresses a few special arrangements:

• Hire-purchase: A hirer has the same rights as a buyer. If repair or replacement exceeds the installment period, the hirer may defer payments.
• Third-party credit arrangements: Credit recipients may exercise buyer’s rights directly against sellers. Written notice to the creditor is required for replacement or termination.
• Installment sales: Buyers may withhold unpaid installments upon discovering a defect.
• Exchange contracts: The draft act also applies to exchange (barter) arrangements.

Special Rules for Vehicles

Automobiles and The draft act establishes enhanced protections for buyers of automobiles and motorcycles, as defined under the Motor Vehicle Act.

For a set period after delivery, sellers face strict liability for defects appearing within one year or 10,000 km for automobiles, whichever comes first, and six months or 5,000 km for motorcycles. Exceptions apply for force majeure or defects caused by the buyer’s own fault.

The presumption that a defect existed at delivery lasts for one year for automobiles and six months for motorcycles.

Other specific rules depend on the type and severity of the defect, as well as the surrounding circumstances:

• Safety-related material defects that cannot be fixed or may cause bodily harm: The seller must replace the vehicle. If no new vehicle of the same type is available, the buyer may terminate the contract.
• Nonmaterial defects: The buyer must ask for repair first. The seller bears the repair costs and must compensate the buyer for loss of use during the repair, though it may choose to replace the vehicle instead.
• Repair deadline missed or repair refused: If the seller cannot complete repairs within 90 days for an automobile or 60 days for a motorcycle, or refuses to repair the vehicle, the buyer can move to demanding a reduction of the purchase price, or termination if the defect in the automobile or motorcycle affects the safety of using it.
• Seller unwilling to act: If the seller cannot repair the vehicle, refuses to do so, and does not replace it, the buyer may have a third party carry out the repair at the seller’s expense.

On termination, the buyer may claim compensation for loss of use, the purchase price plus interest, and other damages, subject to a deduction for depreciation based on how long the vehicle was used.

Special Rules for Electrical and Electronic Appliances and Engine-Powered Devices

Separate rules apply to electrical and electronic appliances and engine-powered devices (not including components of vehicles covered under the vehicle rules above). Liability extends to components and accessories provided at the time of sale, but not general goods purchased separately afterward.

If a material defect is discovered within 14 days of delivery, the buyer may demand replacement with goods of the same type and kind, and terminate the contract if the seller refuses. On termination, the buyer may claim compensation for loss of use, the purchase price plus interest, and other damages, again subject to a deduction for depreciation.

Statute of Limitations

Claims must be brought within:

• One year for general goods;
• Two years for automobiles and motorcycles; and
• Two years for electrical and electronic devices.

The period begins on the date the defect is discovered, or on the date the seller accepts an obligation to repair, replace, or reduce the price. Periods during which the parties are in negotiations do not count toward the limitation period.

Transitional Provisions

The draft law is generally intended to apply even to contracts made before it takes effect, though several provisions limit its retroactive reach:

• Termination formalities: The written notice and six-month termination period requirements do not apply retroactively.
• Limitation periods: The new limitation periods do not apply retroactively, except that the negotiation tolling provisions apply if negotiations began after the act takes effect.
• Pending disputes: The defect presumption and strict liability provisions do not apply to cases or disputes already before a court or arbitration tribunal.
• Preexisting waivers: The rule voiding presale waivers does not apply to agreements already validly entered into under section 483 of the Civil and Commercial Code.

Implications for Businesses

The draft act represents a significant shift in Thailand’s product liability landscape. Businesses manufacturing, distributing, or selling goods in Thailand should take note of the heightened exposure for sellers. The presumption of defect (six months for general goods, a year for automobiles) places the burden on sellers to prove that defects arose after delivery. In addition, the rule voiding pre-contractual disclaimers limits sellers’ ability to manage liability through standard contract terms.

The broader definition of “buyer” is also notable. Because transferees and successors in title can bring claims, sellers can no longer assume that liability ends with the original purchaser.

Operators in the vehicle and electronics sectors should particularly note the stricter obligations that apply to them. Vehicle sellers must be ready to replace vehicles with safety-related defects, with no option to simply repair. Electronics manufacturers must be prepared for immediate replacement demands within 14 days of delivery if material defects are found.

On the operational side, businesses should review and upgrade relevant operations and procedures, such as:

• Quality-control processes, to minimize defect rates;
• After-sales service capabilities, to meet the draft act’s 60-day (general goods) and 90-day (automobiles) repair deadlines;
• Warranty policies and standard sale agreements, to ensure compliance and remove provisions that the new rules would render void; and
• Customer-facing communications and advertising materials, as their content may be a basis for liability if they shape a buyer’s expectations.
• Finally, businesses should model potential financial exposure under the new remedies regime, including replacement costs, loss-of-use compensation, interest on refunds, and depreciation disputes. Insurance coverage should also be reviewed to ensure alignment with the expanded liability framework.

As the draft act continues through the legislative process to eventual passage, it will be important to watch for any amendments during the parliamentary process, the issuance of ministerial regulations and royal decrees that may expand or limit the goods covered, and the start of the 180-day implementation timeline once the law is enacted.