A great Thai factory relationship still needs paper. This guide covers the four contracts every serious importer should have in place, what actually works under Thai law, and the clauses that turn a supplier disagreement from a $50K writedown into a $500 arbitration filing.
The 4 Contracts You Actually Need
- NDA (Non-Disclosure Agreement) — before sharing designs
- NNN Agreement (Non-use, Non-disclosure, Non-circumvention) — stronger than NDA for IP
- Master Supply Agreement (MSA) — governs the whole relationship
- Purchase Order — per-shipment specifics attached to the MSA
Key Thai Law Facts (2026)
- Thailand is a Berne Convention and New York Convention signatory — foreign judgments and arbitration awards enforceable
- Trademark registration in Thailand takes 12–18 months; file BEFORE sharing artwork
- Patent enforcement is slow — use trade-secret + NNN protection instead
- Mold / tooling ownership must be explicitly documented — default assumption is factory-owned
- Contracts in English + Thai bilingual are best; Thai version prevails in Thai courts
Must-Have Clauses in Your MSA
| Clause | What it does |
|---|---|
| Mold / tooling ownership | Confirms YOU own tooling even at factory |
| IP assignment | Any co-developed IP transfers to you |
| Non-circumvention | Factory can't sell your design to others |
| Exclusivity (optional) | Category/region exclusivity for commitment |
| Defect remedy hierarchy | Rework → replace → credit → refund |
| Payment terms | 30/70, LC, or open account with cap |
| Force majeure | Explicit Thai floods, port strikes |
| Governing law | Thai law + SIAC arbitration in Singapore |
| Confidentiality survival | 5 years post-termination |
Why SIAC Arbitration (Not Thai Courts)
- Faster: 6–12 months vs 3–5 years in Thai courts
- Enforceable in Thailand under NY Convention
- English-language proceedings
- Fees: $5K–15K for claims under $500K
- Neutral venue both parties respect
Sample NNN Provision (Simplified)
"Supplier shall not (i) use Buyer's Confidential Information or Designs for any purpose other than production of Buyer's Products; (ii) disclose to any third party; or (iii) manufacture or sell Products (or substantially similar products) to any party other than Buyer for a period of 5 years."
Have this reviewed by a Thai-qualified lawyer — ~$400–900 flat fee for a review.
Practical Signing Tips
- Sign at factory in-person if possible — creates commitment weight
- Have Thai version chopped with company seal + director signature
- Keep original + notarized copy
- Register the NNN with the factory's HR + owner cc'd
FAQ
Q: Will a Thai factory sign an NNN? A: Tier-1 OEMs yes, routinely. Small factories may push back — that itself is signal about their client mix.
Q: Do I really need trademark registration in Thailand? A: If the factory sees your logo/design, YES. Filing costs $250–400 per class. Cheap insurance.
Q: Can TUSKO provide templates? A: We share a battle-tested MSA + NNN template with all managed clients. Contact us.
Related: Red Flags & Fraud Prevention · Payment Terms · First-Time Buyer Checklist