The sale-and-purchase agreement is the document that actually governs a Koh Samui property transaction. Everything before it is preliminary, and everything after it follows from what it says. It sets out what is being sold, for how much, on what schedule, under what conditions, and what happens when one side fails to perform.
It is also the point at which most buyers stop reading carefully, usually because the document is long and the commercial terms were agreed weeks earlier. That is a mistake, because the commercial terms are only part of what the agreement does. This guide works through its clause structure and explains what each part changes about a buyer’s position. It stays off ownership structures, title deeds, and closing costs, which are separate subjects.
What the Sale-and-Purchase Agreement Covers
A sale-and-purchase agreement, usually shortened to SPA, is the binding contract to transfer a specific property from seller to buyer on defined terms. Unlike the reservation stage, it is intended to be complete: if a term is not in the agreement, it generally does not form part of the deal.
That completeness matters more than it sounds. Verbal assurances given during viewings, promises about furniture, undertakings to finish outstanding work, and agreed repairs all have to appear in the document to be enforceable. An agreement that omits them is not evidence that the conversation never happened, but it is usually the only evidence that counts.
The SPA also fixes the mechanics of completion. It says when money moves, in what order relative to the transfer of ownership, and what each party must produce at the Land Office on the day.
Where It Sits After the Reservation Agreement
The SPA follows the reservation stage, and it supersedes it. Where a reservation agreement secured a short exclusivity window in exchange for a deposit, the SPA converts that into a binding commitment to complete.
Two things should carry across cleanly from one document to the other. The reservation deposit should be credited against the purchase price rather than sitting alongside it, and the commercial terms agreed at reservation stage should appear unchanged. A figure or condition that has quietly shifted between the two documents is worth raising before signing, not treating as a drafting detail.
It is also worth confirming that the SPA states the reservation agreement ceases to have effect. Leaving both documents live risks two agreements running in parallel with inconsistent terms.
Parties, Property, and Price: Getting the Basics Exactly Right
The opening clauses look administrative and are routinely skimmed, which is precisely why errors survive in them.
The seller named in the agreement should match the person or entity registered as the owner. Where a company sells, the signatory needs authority to bind it, and where an individual sells through a representative, that authority should be documented. A mismatch here is not a technicality; it goes to whether the person promising to transfer the property is able to.
The property description should identify the land by its title document reference and the structures separately where they are documented separately. On Koh Samui this distinction is common, particularly with villas, and a description that covers only one of the two creates obvious problems later.
The price should be stated in a single currency with the exchange mechanism defined if payment is made in another. Who bears the cost of currency movement between signing and completion is a real commercial term, not an administrative detail, and silence on it tends to favour whoever is receiving the money.
The Payment Schedule and What Triggers Each Instalment
Most agreements stage payment rather than taking it in one sum. The question worth asking of each instalment is not when it is due but what triggers it.
Date-based triggers put the risk on the buyer, because payment falls due whether or not the seller has done anything. Milestone-based triggers tie money to progress, so an instalment becomes payable when a defined event occurs, such as a permit being issued, a stage of construction being certified, or a document being produced.
Milestone triggers are stronger protection, but only where the milestone is objectively verifiable. A clause tying payment to work being completed to the seller’s satisfaction returns the advantage to the seller, because the test is theirs to apply.
The final balance is normally paid at the Land Office against transfer. A staged payment structure that front-loads payment before transfer increases exposure, and that exposure should be matched by something in return, whether a bank guarantee, a mortgage registration, or a corresponding reduction in price.
Completion Date and What Happens If It Slips
The completion date is when ownership transfers and the balance is paid. The clause worth reading is not the date itself but the one describing delay.
Agreements commonly set a fixed date with a grace period, after which the defaulting party becomes liable. What varies is whether the grace period and the consequences apply symmetrically. It is normal to find a buyer who pays late facing forfeiture, and a seller who transfers late facing nothing at all.
Where completion depends on something outside both parties’ control, such as a government office timeline, the agreement should say so and provide for extension rather than default. Treating an administrative delay as a breach helps nobody and creates leverage for whichever side is readier to use it.
Conditions Precedent: What Must Be True Before Completion
Conditions precedent are the facts that must hold before either side is obliged to complete. They are the buyer’s main protection in the agreement, and their absence is one of the most consequential omissions a draft can contain.
Typical conditions include clear title free of encumbrance, the seller holding authority to sell, required permits being in place, and land measurements matching the title documents. Each one converts an assumption into a contractual requirement.
The clause should also say what happens if a condition is not met. The useful answer is that the buyer may withdraw and recover sums paid. A weaker version gives the buyer a right to withdraw while leaving the money with the seller, which is not meaningfully a right at all.
Who Pays What at Transfer
Transfer involves government fees and taxes, and the agreement should allocate each one explicitly rather than relying on local custom. Custom varies by transaction type and is not a term either party can enforce.
The allocation itself is negotiable and frequently negotiated. What matters is that the agreement states it unambiguously, because the alternative is a dispute at the Land Office counter on the day of transfer, when both sides have the least room to manoeuvre.
Where a party agrees to bear a cost, it is worth confirming whether that covers the amount assessed on the day or the amount estimated at signing, since the two can differ.
Warranties the Seller Gives, and What They’re Worth
Warranties are statements of fact the seller promises are true, covering matters such as the absence of undisclosed encumbrances, outstanding disputes, or unpaid charges against the property.
Their practical value depends on two things the clause may not address. The first is survival: whether the warranties continue to have effect after completion, or expire at transfer and become unenforceable exactly when problems tend to surface. The second is recourse, meaning what the buyer can actually claim if a warranty proves false.
A warranty from a seller who will be difficult to pursue afterwards is worth less than the same words from a party who remains reachable. That is a commercial judgment rather than a legal one, but it belongs in the assessment.
Default and Remedies on Both Sides
The default clause describes what counts as failure to perform and what follows. Read it twice, once from each side.
Buyer default usually means failure to pay, and the standard consequence is forfeiture of sums already paid. Seller default is where drafting more often goes quiet. A balanced clause gives the buyer a defined remedy, typically return of all sums paid plus a penalty, and where appropriate a right to enforce the sale rather than merely to be repaid.
An agreement where the buyer’s default is defined in detail and the seller’s is not described at all is not neutral drafting. It is a position, and it is negotiable.
Key Clauses to Check Before Signing
The following are the provisions worth close reading, and renegotiation where necessary, before the document is signed.
Payment triggers
Confirm whether each instalment is triggered by a date or a verifiable milestone, and that any milestone is objectively testable rather than subject to the seller’s judgment.
Completion mechanics
Check the completion date, the grace period, and whether delay consequences apply equally to both parties.
Conditions precedent
Confirm the conditions cover title, authority to sell, permits, and measurements, and that failure entitles the buyer to withdraw and recover money paid.
Default terms
Read buyer default and seller default side by side and ask whether the remedies are proportionate.
Assignment
Check whether the buyer may transfer the contract to another party before completion, which matters for anyone buying through a structure not yet established, or who may want to resell before transfer.
Governing language
Where the agreement exists in Thai and English, establish which version prevails if the two diverge. This is routinely overlooked and occasionally decisive.
Off-Plan Agreements: The Additional Clauses That Apply
Buying off-plan adds terms that do not arise in a resale, because the agreement covers something that does not yet exist.
Specifications matter here in a way they otherwise would not. The agreement should attach the plans and the materials schedule, and should state what tolerance of variation is permitted. A clause allowing substitution of materials of equivalent quality is normal, but equivalence needs a standard, otherwise it is decided by the party doing the substituting.
The completion mechanism also changes. Payment is usually tied to construction stages, so each stage needs a definition and ideally independent certification. Handover should depend on a defects inspection, with a defined period for rectification before final payment.
Finally, the agreement should address what happens if the development is not completed at all. Protection here varies considerably between developers, and it is a question to ask before signing rather than one to discover the answer to later.
Conclusion
A sale-and-purchase agreement is long because it is doing a great deal of work. It converts an informal understanding into enforceable obligations, allocates risk between the parties, and determines what either side can do when something goes wrong.
Most of the buyer’s protection sits in three places: the conditions precedent, the payment triggers, and the default clause. If reading time is limited, those are where it should go. They are also the clauses most often weak in a first draft, and most readily improved by asking. If you would like an agreement reviewed before you sign, get in touch.
Frequently Asked Questions
Is a sale-and-purchase agreement legally binding in Thailand?
Yes. Once signed it is the binding contract governing the transaction, which is why its terms matter more than anything agreed verbally beforehand. Terms not recorded in the document generally do not form part of the deal.
Can a sale-and-purchase agreement be changed after signing?
Only by agreement between both parties, usually by a written amendment signed by both. This is why it is far easier to negotiate a clause before signing than to revisit it afterwards, when the other side has no obligation to agree.
What happens to the reservation deposit?
It should be credited against the purchase price rather than treated as a separate payment. Confirm the agreement states this explicitly, since a document that is silent on the point leaves room for it to be treated as an additional fee.
What are conditions precedent, and why do they matter?
They are facts that must be true before either side is obliged to complete, such as clear title or the seller’s authority to sell. They convert assumptions into contractual requirements, and their absence removes the buyer’s main protection in the agreement.
Who pays the transfer fees and taxes?
Whoever the agreement says. The allocation is negotiable and varies by transaction, so it should be stated explicitly rather than left to local custom, which is not enforceable by either party.
Is an off-plan agreement different?
Yes, materially. It adds specifications, construction-stage payment triggers, defects inspection and rectification at handover, and terms covering what happens if the development is not completed.
