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For a construction contract that does not stipulate the consequences of the contract revocation, section 391 of the Thai Civil and Commercial Code, which prescribes the general consequence of contract revocation (i.e. the restitution after rescission), will be applied. It will be the case that each party is bound to restore the other to the former condition as if the contract has never been made. However, the specified contract revocation consequence is not align with the nature of construction contract since, in general, construction contract constitutes certain obligations for both parties to perform its own obligations periodically within the contract period. In addition, within the period of contract obligation, both employer and contractor mutually gain its own benefits. Consequently, if the construction contract is terminated, the consequence should be a contract termination, rather than a contract rescission, which will release both parties from their obligations to effect and to receive future performance. According to the comparative research among Thai laws, English law, German law, and French law regarding the consequence of contract revocation, under German law, contract revocation consequence consists of both contract rescission, which leads to restitution (Rücktritt), and contract termination, which releases both parties from their obligations to effect and to receive future performance (Kündigung). That is to say, the consequences from the revocation of construction contract, which is one type of the hire of work contracts, could lead to the restitution or the release of obligations to effect and to receive future performance, as the case may be. Under French law, there are also two types of contract revocation consequences, which are comparable to those specified under German law. For English law, the consequence of construction contract revocation is a termination which release the obligations to effect and to receive further performance. Each party will be discharged from its own obligations after the contract has been terminated. However, if there are any obligations occurred prior to the contract termination, each party is still obliged and has their liabilities toward each other. In case both parties have specified the consequence of revocation in their contract, such contract will be enforced accordingly, in accordance with the Freedom of Contract principle. Both parties are able to stipulate the consequence of contract revocation to be differ from those specified under section 391 of the Thai Civil and Commercial Code. This is not void under Thai law since section 391 is not considered as a law which relates to public order or good moral. Comparing to English law, German law and French law, the Freedom of Contract principle is recognized under the law of these foreign counties. Both Parties are able to arrange for an agreement based on their decision on the basis that it is not conflicted to the public policy and the law prohibition. If the agreement is conflicted to the public policy or the law prohibition, such agreement will be void. The agreement will consequently be unenforceable. From the studies in relation to the consequence of contract revocation under Thai laws, English law, German law, and French law, there are two proposed solutions as follows: 1. In case the employer exercises the right to terminate the construction contract, which could be exercised without any reasons, there should be an interpretation that the provision of compensation under section 605 of the Civil and Commercial Code is considered as the consequence of contract revocation, without applying the general consequence of contract revocation under section 391 and; 2. In case the construction contract is rescinded for an important reason, paragraph 3 of section 391 should be interpreted by taking into account the interpretation of section 346 of the German Civil Code, which stipulates clearly that there will be a compensation provided for the case where the restitution could not be executed. |
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