Distribution Agreement in Thailand: Template, Key Clauses and Local Law (2026)

A distribution agreement is a contract where a supplier (the principal) appoints an independent business (the distributor) to buy its products and resell them, in the distributor's own name and for its own account, inside a defined territory. The distributor takes title to the goods and carries the stock and credit risk. That is what separates a distributor from a commercial agent, who only solicits orders for a commission and never owns the goods. In Thailand there is no single statute you fill in to create a valid distribution agreement, and no distributor-protection law. The contract rests on the general rules of the Civil and Commercial Code, with the Trade Competition Act setting the limits on resale pricing and vertical restraints, and the Foreign Business Act shaping who may distribute. This guide sets out the local law that actually bites, the clauses a Thailand distribution agreement should contain, and a section-by-section skeleton you can adapt. It is general information, not legal advice. Confirm the detail with qualified Thai counsel before you sign. ## Thailand: the local law that shapes your agreement Thailand has no specific distributorship or commercial agency statute. A distribution agreement is an ordinary contract under the Civil and Commercial Code, so the parties have wide freedom to set their own terms, and there is no automatic goodwill indemnity on termination. The Code's general principles of contract and good faith apply, so an abrupt end to a long, open-ended relationship can expose the terminating party to a damages argument where no clear notice was given. A clear notice clause is the simplest protection. ### The Trade Competition Act The main external constraint is the Trade Competition Act B.E. 2560 (2017), which took effect on 5 October 2017 and is enforced by the Trade Competition Commission of Thailand. It replaced the 1999 Act and strengthened the regime. For distribution, the relevant areas are abuse of a dominant position, anti-competitive agreements, and unfair trade practices between business operators. In 2018 the Commission issued guidelines clarifying what counts as an unfair trade practice. Fixing a minimum resale price, imposing absolute territorial restrictions and certain exclusive-dealing arrangements are the sensitive areas, so keep resale pricing to a recommendation and keep territorial and exclusivity terms proportionate. ### Foreign ownership The point that catches foreign suppliers out is who may actually distribute. The Foreign Business Act restricts certain trading, wholesale and retail activities by majority foreign-owned companies, often requiring a foreign business licence or meeting a capital threshold. Many foreign suppliers therefore appoint a Thai distributor or set up an appropriately structured local entity. Check the ownership and licensing position before you design the distribution model. ## The clauses a Thailand distribution agreement should contain A workable distribution agreement sets out the commercial deal and the legal protections together. The core clauses are: - Appointment and territory. Name the parties and products, define the territory, and say whether the appointment is exclusive, non-exclusive or selective.

• Products and changes. Define the product range and say what happens when the supplier adds, discontinues or reformulates a product.
• Sales targets and minimums. Targets, how they are measured, and the consequence of a miss.
• Pricing and payment. The supplier may set its wholesale price and recommend a resale price, but should not impose a minimum resale price. Set payment terms, currency, taxes and credit limits.
• Orders, delivery and risk. Ordering, lead times, delivery terms (an Incoterms rule), and when title and risk pass.
• Intellectual property and brand. A limited trade mark licence for resale only, with quality standards and no transfer of goodwill in the marks.
• Marketing and online sales. Marketing commitments and the rules on website and marketplace selling.
• Product compliance. Registrations, permits, labelling and sector licences (for example for food, cosmetics or medical devices) that apply to the goods in Thailand.
• Term, renewal and termination. Fixed or open-ended term, renewal mechanics, and termination for cause, insolvency and change of control, with the notice each requires. A clear notice period answers the Code's good-faith concerns.
• Post-termination. Stock buy-back, run-off sales, return of materials and survival of confidentiality.
• Confidentiality, data protection and non-compete. Confidentiality, a data protection clause fit for Thailand's Personal Data Protection Act, and any reasonable post-term non-compete.
• Governing law, language and disputes. Governing law, the court or arbitration seat, and the contract language. A Thai-language version is often needed for local authorities. ## A distribution agreement skeleton you can adapt Use this running order as a drafting checklist. It is a skeleton, not a finished contract, and it is not legal advice. 1. Parties and recitals

2. Definitions
3. Appointment, territory and exclusivity
4. Products and product changes
5. Distributor obligations (targets, stock, promotion, standards)
6. Supplier obligations (supply, support, training, materials)
7. Pricing, orders, delivery, title and risk
8. Intellectual property and trade mark licence
9. Product compliance, registrations and labelling
10. Marketing, online selling and resale conditions
11. Confidentiality and data protection
12. Term and renewal
13. Termination and notice periods
14. Consequences of termination (stock, run-off, non-compete)
15. Governing law, jurisdiction or arbitration, and language
16. Boilerplate (assignment, force majeure, notices, anti-bribery, entire agreement) ## Common mistakes to avoid - Ignoring foreign-ownership limits. The Foreign Business Act can restrict a majority foreign-owned company from trading, wholesale or retail without a licence. Settle the ownership and licensing model before you draft.

• Fixing the resale price. A recommended price is fine, a minimum resale price risks breaching the Trade Competition Act B.E. 2560 (2017).
• Leaving termination vague. With no clear notice period, the Code's good-faith principles can be used to argue that an abrupt end to a long relationship was wrongful. Set the notice period expressly.
• Overlooking product registrations. Food, cosmetics, medical devices and similar goods need registrations and permits in Thailand that belong in the contract.
• Keeping no records. Targets, price changes, registrations, renewals and notice deadlines all need tracking. A missed renewal or a late notice undoes careful drafting. ## Keeping the agreement alive after signing The work does not stop at signature. A Thailand distribution agreement sets targets to track, product registrations to maintain, a term and renewal date to diarise, price lists that change, and termination notice windows you cannot afford to miss. Most disputes come not from a badly drafted clause but from a renewal that auto-extended unnoticed or a registration that lapsed. That is the case for keeping drafting, review, version history and obligation tracking in one place rather than spread across email, a shared drive and a spreadsheet. Adira is one such AI workspace: you draft from your own templates, see each clause flagged as favourable, neutral or unfavourable to you, edit clauses in plain English, and keep a live timeline of every version, renewal and obligation, built on Anthropic's Claude. Adira is India-first today; deeper support for Thai law is on its roadmap rather than live, so treat it as a workflow layer here and keep local counsel for the legal substance.