At present, hire-purchase creditors, including public companies, private companies, leasing firms, banks, and finance companies, frequently face challenges arising from lessees who fail to make full payments as agreed in their contracts. Due to economic downturns and financial liquidity issues, many lessees struggle to fulfill their obligations, leading them to default on their hire-purchase agreements.

Some lessees, overwhelmed by financial difficulties, may be unaware of their rights and obligations under their contracts. In an attempt to resolve their financial burdens, they may take actions that not only breach civil contracts but also constitute criminal offenses, punishable by fines and imprisonment. These actions may include intentionally selling the hire-purchased vehicle, hiding it, or engaging in fraudulent activities. Additionally, unexpected events such as vehicle loss may raise legal questions regarding the termination of hire-purchase debt and the obligations of lessees. If a case exceeds the statutory limitation period, creditors may face difficulties in enforcing claims.

This article aims to provide answers to key legal questions, including:

1. If a hire-purchased vehicle is lost but the payment has not been completed, does the debt obligation still exist?
2. What is the statute of limitations for hire-purchase cases, and how does it apply under Section 193/30 of the Thai Civil and Commercial Code?
3. If a creditor fails to file a lawsuit within ten years, do they still have the right to take legal action?
4. If a hire-purchased vehicle is sold to a third party, what are the criminal liabilities for both the debtor and the buyer?

1. Does the Loss of a Hire-Purchased Vehicle Terminate the Debt Obligation?

Regardless of how a hire-purchased vehicle is lost, if the payment has not been completed, the hire-purchase debt remains. The ownership of the vehicle remains with the creditor, and the debtor is still obligated to fulfill all payment requirements under the contract. If a hire-purchased vehicle is lost, both creditors and debtors should seek legal counsel immediately to understand their rights and responsibilities. Consulting a lawyer or a specialized legal firm in Thailand can help prevent legal disputes and possible asset enforcement by creditors.

2. Statute of Limitations for Hire-Purchase Cases: 10 Years Under Section 193/30

In cases where claims arise from the termination of a hire-purchase contract, no specific statute of limitations is prescribed by law. Therefore, the general ten-year statute of limitations under Section 193/30 of the Civil and Commercial Code applies. Precedents from Supreme Court rulings establish that the right to claim damages due to a lessee’s breach of contract begins from the contract’s termination date, not from the date the creditor determines the damages. For instance:

• Supreme Court Judgment No. 5002/2557 states that the right to claim damages, such as depreciation losses, starts when the hire-purchase agreement ends, as stipulated under Section 193/12.
• Supreme Court Judgment No. 2742/2556 reaffirms that claims for losses arising from a lessee’s breach of contract are subject to a ten-year limitation period under Section 193/30, beginning from the contract’s termination date.

3. Can a Creditor Still Sue After 10 Years?

If a creditor fails to reclaim the hire-purchased vehicle and does not take legal action within ten years, the right to sue under the hire-purchase contract is time-barred. Consequently, the creditor cannot claim damages related to the contract. However, under Section 1336 of the Thai Civil and Commercial Code, the creditor, as the rightful owner, retains the right to reclaim the vehicle indefinitely from any unauthorized possessor.

Thus, even after ten years, debtors should not assume that creditors lose their right to reclaim the vehicle or demand compensation. Debtors facing financial difficulties should seek legal advice to avoid further liabilities and potential asset seizures.

4. Criminal Liabilities for Selling a Hire-Purchased Vehicle

If a debtor, unable to continue payments, deliberately sells the hire-purchased vehicle to a third party without the creditor’s consent, this constitutes fraud or misappropriation of property. Such actions are punishable under the Thai Penal Code:

• Section 341 (Fraud): Imprisonment for up to three years, a fine of up to 60,000 THB, or both.
• Section 352 (Misappropriation): Imprisonment for up to three years, a fine of up to 60,000 THB, or both.

Additionally, if the buyer knowingly purchases the vehicle despite being aware that it was unlawfully obtained, they may be charged with receiving stolen property under Section 357 of the Penal Code, which carries a penalty of up to five years’ imprisonment, a fine of up to 100,000 THB, or both.

Obtain Trusted Legal Assistance

If you are currently dealing with hire-purchase contract issues and require legal guidance, Trinity & Co Legal is ready to assist. Our team of experienced legal professionals, specializing in various legal fields for over ten years, is committed to providing high-quality services to ensure that clients receive professional legal support in all matters.

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