DOI: 10.14457/tu.the.2020.141
title: Legal analysis of the principle of mistake in Thai law

description: Apart from enacting new legislation to ensure fairness and bring about increased certainty to commercial transactions, it is necessary to consider the currently applicable law to ascertain whether it is appropriate to address contemporary issues or not. Accordingly, when examining Sections 156 to 158 which pertains to the principle of mistake under Thai law, a question arises as to the adequacy of such three existing provisions in tackling current problematic situations. This is because Section 156 and Section 157 provide several grounds of mistake which will render an expression of intent void or voidable. The purpose of such mechanism is to protect the actual will of the party who is subject to mistake rather than the other party who acted under good faith, with only one exception whereby the mistaken party will not be protected in the case gross negligence on that mistaken party’s part by virtue of Section 158. Apparently, this is a reflection of the subjectivity, rather than the objectivity, principle at play. In view of the foregoing, the author has conducted a comparative study to analyze the principle of mistake. The legal frameworks within the scope of study include English law, French law, and the UNIDROIT Principles of International Commercial Contracts 2016. English law has been chosen to represent a common law country which mainly adheres to the objective principle. French law has been chosen to represent a civil law country which mainly adheres to the subjective principle. The UNIDROIT Principles of International Commercial Contracts 2016 has been chosen as it represents a model law which combines both the objective and subjective principles. From the comparative analysis the author is then able to make suggestions on amendments to Thai law to make Thai law more just to all relevant parties.There are two types of mistakes as enshrined in the Thai Civil and Commercial Code, namely, a mistake of an essential element of a juristic act resulting in voidness as per section 156, and a mistake of a quality of a person or of the property that is deemed as an essential element of the juristic act resulting in voidability as per section 157. Apparently, these two provisions provide protection to the mistaken party to preserve the actual will. There is only one exception in the case of gross negligence pursuant to Section 158 to protect the other bona fide party which is inadequate to maintain the trust between parties and would lead to injustice and uncertainty of commercial transactions as a result of the ease by which a juristic act could be nullified or avoided on the basis of a mistake.In light of the foregoing, the author proposes additional conditions for nullification or avoidance of a bilateral juristic act which is similar to Article 3.2.2 of the UNIDROIT principles. The conditions are that the other party made the same mistake, or the other party caused the mistake, or the other party knew or should have known the mistake, or the other party had not yet acted in reliance at the time of avoidance. Moreover, the insertion of additional exceptions under which a party is not allowed to invoke a mistake as a ground for nullification or avoidance of the juristic act is needed, namely the event that the mistaken party had acknowledged the risk or should not bear the risk of mistake. In so doing, the principle of mistake in Thai law would be more fair and more compatible with the current state of the economy.