Section Code: 0340 - 0353
Thai Civil and Commercial Code
EXTINCTION OF OBLIGATION
Section 340. Release of Obligation
If the creditor declares to the debtor an intention to release the obligation, it is extinguished.
When an obligation has been evidenced by writing, the release must also be in writing or the document embodying the obligation be surrendered to the debtor or cancelled.
Section 341. Discharge by Set-Off
If two persons are bound to each other by obligations whose subject is of the same kind and both of which are due, either debtor may be discharged from his obligation by set-off to the extent to which the amounts of the obligations correspond, unless the nature of one of the obligations does not admit of it.
The provisions of the foregoing paragraph do not apply, if the parties have declared a contrary intention; but such intention cannot be set up against a third person acting in good faith.
Section 342. Set-Off Declaration
Set-off is made by a declaration of intention by one party to another. A condition or time commencement or ending cannot be added to such declaration.
The declaration of intention mentioned in the foregoing paragraph relates back in its effect to the time when both obligations could first have been set-off.
Section 343. Set-Offs and Indemnification
A set-off may be made even though the place of performance of the two obligations is different; but the party who makes the set-off must indemnify the other party for any damage caused thereby.
Section 344. Statute of Limitations does not exclude Set-Off
A claim against which there is a defense may not be set-off. Prescription does not exclude set-off, if the claim barred by prescription was not barred at the time at which it could have been set-off against the other claim.
Section 345. No Set-offs from Unlawful Act
If an obligation arises from an unlawful act, the debtor cannot avail himself of a set-off against the creditor.
Section 346. Set-Off must be subject to Judicial Attachment
If a claim is not subject to judicial attachment, it is not subject to set-off.
Section 347. Third Debtor
A third debtor who has received from the Court an order of prohibition of payment cannot set up against the seizing creditor an obligation subsequently acquired by him.
Section 348. Priority of Set-offs
If either party has several claims suitable for set-off, the party making the set-off may specify the claims which are to be set-off against each other. If the set-off is declared without such specification, or if the other party objects without delay, provisions of Section 328 paragraph 2 apply mutatis mutandis.
If the party making the set-off owes the other party interest and costs in addition to the principal performance, the provisions of Section 329 apply mutatis mutandis.
Section 349. Novation
When the parties concerned have concluded a contract changing the essential elements of an obligation, such obligation is extinguished by novation.
If a conditional obligation is made unconditional, or a condition is added to an unconditional obligation, or if a condition is changed, it is regarded as a change of an essential element of such obligation.
A novation by a change of the creditor is governed by the provisions of this Code concerning transfer of claims.
Section 350. Agreed Change of Terms
A novation by a change of the debtor may be effected by a contract between the creditor and the new debtor, but this cannot be done against the will of the original debtor.
Section 351. No Obligation then Contract is Annulled
If the obligation resulting from a novation does not come into existence, or is annulled, because of an illegality in its ground or because of some reason unknown to the parties, the original obligation is not extinguished.
Section 352. Rights or Pledges can be transferred to new obligation of Novation
The parties to a novation may, to the extent of the subject of the original obligation, transfer a right of pledge or mortgage given as security for it to the new obligation; but if such security was given by a third person, his consent is necessary.
Section 353. Merger of Obligation
If rights and liabilities in an obligation become vested in the same person, the obligation is extinguished, except when it has become the subject of the right of a third person, or when a bill has been re-indorsed according Section 917 paragraph 3.