Process
Ending a villa construction contract early: the employer's right to terminate (CCC 605-607)
While a villa is still unfinished, Thai law lets the owner end the building contract, but they must compensate the contractor for the loss this causes. This guide covers Sections 605-607: termination, what happens if the contractor dies or cannot continue, and subcontracting.
Right Way Phangan · Editorial
Updated 8 October 2026
Can you fire your builder halfway through a villa? Generally yes: under CCC Section 605, as long as the work is not finished, the employer may terminate the contract, but must compensate the contractor for any injury resulting from the termination. The right is not free, and it does not replace a termination clause for the contractor's breach.
What the three sections say
- Section 605 — termination by the employer. Available until the work is finished. The price of using it is compensation for the contractor's resulting loss; how much is a question of fact, usually argued over work done, materials ordered and lost profit.
- Section 606 — personal contracts. Where the contractor's personal qualifications were essential, the contract ends if the contractor dies or, without fault, can no longer do the work. If part of the work already done is useful to the employer, they must accept it and pay reasonable remuneration for it.
- Section 607 — subcontracting. The contractor may use subcontractors for all or part of the work, except the major part that required the contractor's own ability. The contractor remains responsible for the work and for any subcontractor's mistakes.
Practical points for Koh Phangan owners
- Terminating for breach is different. If the builder is late or defective, the remedies for default and rescission apply; see rescission and notice-and-cure and builder defects liability. Section 605 is the no-fault exit.
- Document the state of works before terminating: a dated survey, photos and a payment reconciliation, ideally by an independent engineer, to fix what is owed.
- Check the contract. A negotiated clause may set termination notice or a compensation formula; for residential builds also read the controlled construction contract rules.
- Unpaid builders have leverage. See the contractor's preferential lien before the final settlement.
- Subcontractors on island sites are normal. Ask who does structural work and make sure the contract names the main contractor as liable under Section 607.
- Set-off of what the builder owes you against what you owe needs a proper declaration; see set-off.
Takeaway: the owner can usually exit an unfinished build, but pays for the exit. Get a joint inventory of works and money before sending any termination notice, and have a Thai lawyer review the wording. The section texts used here are unofficial translations; the Thai original governs.
Key points
- Section 605 lets the employer terminate until the work is finished.
- The employer must compensate the contractor for loss resulting from the termination.
- Section 606 ends personal-skill contracts on the contractor's death or inability, with useful completed work still paid for.
- Section 607 allows subcontracting except the major part requiring the contractor's own ability; the contractor stays liable.
- Record the state of works and payments before terminating.
Sources
General information, not legal advice. Thai property law is fact-specific — verify any structure with a licensed Thai lawyer before you commit. Independent legal due diligence is part of every transaction we handle.
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