Theoretical problems of the interpretation of contracts in the Thai civil and commercial code: final research report

The Thai Civil and Commercial Code contains two main provisions dealing with the interpretation of a contract, namely, Section 171 (“In the interpretation of a declaration of intention, the true intention is to be sought rather than the literal meaning of the words or expressions”) and Section 368 (“Contracts shall be interpreted according to the requirements of good faith, ordinary usage being taken into consideration”). There has been a long debate among Thai scholars in relation to the application of these two provisions. On the one hand, the majority view takes the approach that Sections 171 and 368 can be applied simultaneously, claiming to be consistent with the German legal position, which is their origin. On the other hand, opponents argue that Section 171 must be applied before Section 368, provided that the parties’ common intention can be found. It is explored in this research that at first glance these two approaches to interpreting a contract appear to be in a stark contrast