Can a car dealer keep your whole deposit?
A large deposit is common when ordering a premium car. If you change your mind, can the dealer keep all of it? This decision answers two questions: who was in breach, and how much the dealer could keep.
In short
- The order form gave only an estimated delivery month, so the dealer was not late until the buyer set a reasonable deadline.
- The buyer refused to pay the balance and take the car, so the buyer was in breach and the dealer could forfeit the deposit.
- The deposit was out of proportion. The court cut the forfeiture to 100,000 baht and ordered 900,000 baht returned.
What happened
The buyer ordered a car and paid a deposit of 1,000,000 baht. The order said the car would be delivered "approximately within July 2015". When the dealer later told the buyer to pay the balance and take the car, the buyer refused and asked for the deposit back.
Who was in breach?
"Approximately within July" is not a calendar date. Where a contract has no fixed date for performance, the party waiting for performance must give the other a reasonable deadline first.
There was no evidence that the buyer had asked the dealer to deliver by a set date. So the dealer was not in default just because the car had not arrived, and the buyer had no right to end the contract on that ground. The contract stayed in force.
When the dealer asked the buyer to pay and take delivery and the buyer refused, the buyer broke the contract. The dealer was therefore entitled to forfeit the deposit.
Estimated delivery dates. If your order says delivery is "approximately" in a given month and the car does not arrive, write to the dealer and give a clear, reasonable deadline before you cancel. Without that notice, you may be the one held in breach.
How much could the dealer keep?
Under section 7 of the Unfair Contract Terms Act, where a deposit is to be forfeited and it is out of proportion, the court may reduce the forfeiture to the actual damage. Because this rule concerns public order, the Supreme Court can apply it on its own initiative.
In decision No. 1383/2563, comparing the deposit with the price of the car and the dealer's loss, the Supreme Court reduced the forfeiture to 100,000 baht and ordered the dealer to return 900,000 baht.
The dealer did not have to pay interest on the refund, because it was not in default and the refund arose from the buyer's own breach.
What this means for buyers
- Read how the delivery date is worded. "Approximately" or "estimated" usually means you must give notice before you can treat the dealer as late.
- If you are the one who cancels, you can still ask for an excessive deposit to be reduced.
- Keep the order form, receipts and all messages with the sales staff.
Legal references
- Unfair Contract Terms Act B.E. 2540 (1997), section 7
- Supreme Court decision No. 1383/2563 (2020)
This explainer gives general information about Thai law as at 14 October 2026. It is not advice on your situation. Interest rates and amounts in court decisions reflect the law when each decision was made. Contact the office before you act.