The Thai government has released an updated draft Liability for Defective Goods Act after the Office of the Consumer Protection Board completed its second round of public hearings on the law in December 2023. The draft law sets out a new liability regime for different types of goods, and is being drafted in response to concerns over inadequate protection for buyers and the current lack of clear liability regulations for defective goods.
Key Points in the Draft Act
The latest draft introduces new and broader definitions for "seller" and "buyer," which replace "business operator" and "consumer" as defined in the previous draft.
The act will apply to and govern hire-purchase contracts and sales contracts and will have retroactive effect on agreements that were made before the act's effective date.
The draft's new liability regime has the following characteristics:
- Liability provisions are specified for different categories of goods while excluding used products and living animals.
- Sellers are presumed to be at fault for defects that exist at the time of delivery, with specific timelines and conditions for (1) automobiles and motorcycles; (2) electrical appliances, electronic devices, and mechanical devices; and (3) other products.
- Agreements made before the discovery of a defect are deemed void if they conflict with the act or unfairly burden buyers.
The latest draft also sets new prescription periods:
- For the "other products" category, the prescription period is one year from the discovery of a defect or from the seller's agreement to repair, replace, or reduce the sale price.
- For the "automobiles and motorcycles" and "electrical appliances, electronic devices, and mechanical devices" categories, the prescription period is two years under similar conditions.
Now that the draft Liability for Defective Goods Act has passed the public hearing stage, its potential impact on the public is being assessed further before the draft continues moving through the legislative process.
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