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Article 6.642. Right to withdraw from a contract of loan for use


1. Each of the parties to a contract of loan for use shall have the right to terminate, at any time, an open-ended contract of loan for use having notified the other party thereof three months in advance unless another time limit has been provided for by the contract.


2. Unless otherwise provided for by the contract, the loan recipient shall likewise have the right to terminate, at any time, a fixed-term contract of loan for use having notified the other party about the intended termination of the contract at least one month in advance.

 


Article 6.643. Change of the parties to a contract of loan for use


1. The lender shall have the right to sell the thing or transfer it for use to a third person for payment.  In this event, the rights and duties under the previous contract of loan for use shall pass to the new owner or user if that contract, in the case of it being subject to registration, was registered in the public register in accordance with the procedure established by laws, or the new owner and user knew or should have known about it at the time of concluding the contract.


2. In the event of the death or reorganisation of the lender, his rights and duties shall pass to the successor of his rights.

 


CHAPTER XXXIII

CONTRACTING


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CHAPTER XXXIII

CONTRACTING

 


SECTION ONE

GENERAL PROVISIONS

 


Article 6.644. Concept of a contract for work


1. Under a contract for work, one party (the contractor) shall undertake to perform certain work at his own risk in accordance with the instruction of another party (the client), and transfer the results thereof to the client, while the latter shall undertake to accept the work performed and pay for it.


2. The provisions determined in this Section shall be correspondingly applicable to individual types of contract (consumer, construction, etc.) unless otherwise provided for by the provisions of other Sections of this Chapter.


3. The contractor and the client shall not be bound by any relations of subordination or other affiliation.


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Article 6.645. Subject matter of a contract for work


1. A contract for work shall be concluded for the manufacture or transfer of the results of a certain work, or for the performance of any other work with the ensuing transfer of the results created in the process of this work to the client.  Prior to the conclusion of the contract, the contractor must submit to the client all the necessary information related to the performance of the work, likewise the information concerning the materials and the time necessary for the performance of the work.


2. Where the contract is concluded for the manufacture of a thing, the contractor shall transfer to the client, together with the manufactured thing, the rights thereto. 


3. Unless otherwise provided for by the contract, the contractor shall perform the work at his own risk and independently determine the methods of fulfilling the task set by the client.


4. Where the character and value of the work performed is relatively insignificant in comparison with the value of the manufactured, purchased or processed thing, the contract shall be deemed to be a sales contract rather than a contract for work.

 


Article 6.646. Permits/licences for individual types of work

It may be provided for by laws that certain types of work may be performed only upon obtaining a permit/licence issued in accordance with the procedure established by laws.


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Article 6.647. Performance of work using the materials and means of the contractor


1. Unless otherwise provided for by the contract, the contractor must perform the work agreed in the contract using his own materials and with his means and forces.


2. In performing the work using his own materials, the contractor shall be liable for any inferior quality of the materials.


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1. In supplying the contractor with materials, the client must also transfer to him the documents certifying the conformity of the materials.


2. Where the materials supplied by the client are not fit for use or defective, of which the contractor needs to know, the contractor must immediately notify the client thereof.


3. If the work is performed in whole or in part using the materials of the client, the contractor shall be liable for the improper consumption of the materials. The contractor must submit to the client a report on the expenditure of the materials and return the balance thereof or, with the consent of the client, reduce the price of the work by taking into account the cost of the unconsumed materials remaining with the contractor.


4. Where the work is performed using the materials of the client under the contract of client order, the receipt issued by the contractor to the client when concluding the contract must contain the precise name, description and valuation of the materials determined by agreement between the parties. 


5. The contract for work may provide for the consumption rate of the materials, the time limits for the return of their balance and basic waste, likewise the liability of the contractor for the failure to perform these duties, or improper performance thereof.


6. Where the contractor has not achieved the result stipulated by the contract or the result achieved has defects which make the thing unfit for use in accordance with the designation provided for in the contract or it its normal designation due to


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or the result achieved has defects which make the thing unfit for use in accordance with the designation provided for in the contract or it its normal designation due to defects in the materials granted by the client, the contractor shall have the right to demand payment for the work performed only if he proves that the defects in the materials were impossible to be noticed in accepting them from the client.


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Article 6.649. Distribution of risks between the parties


1. Unless otherwise provided for by laws or a contract for work:


1) the risk of accidental perishing or damaging of the materials or equipment transferred for the performance of work shall be borne by the party granting them;


2) the risk of accidental perishing or damaging of the result of the work fully completed or that of its intermediary stage shall be borne by the contractor until the acceptance thereof by the client.


2. In the event of delay in the transfer or the acceptance of the result of the work performed, the risks provided for in paragraph 1 of this Article shall be borne by the party in delay.


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Article 6.650. General contractor and the subcontractor


1. Unless the laws or the contract for work stipulate that the contractor has to perform the task personally, the contractor shall have the right to involve other persons (subcontractors) to perform his obligations. In the event where subcontractors are involved for the performance of the task, the contractor shall act in the capacity of a general contractor.


2. The contractor who has involved subcontractors to perform the contract in violation of laws or the rules established in the contract shall be liable towards the client for any damage caused by the subcontractors in the performance of the contract.


3. The general contractor shall be liable towards the client for the failure to perform or improper performance of the obligations by the subcontractors, and towards the subcontractors, for the failure to perform or improper performance of the obligations by the client.


4. Unless otherwise provided for by laws or the contract, the client and the subcontractor shall have no right to raise monetary claims to one another connected with the violation of the contracts concluded by each of them with the general contractor.


5. With the consent of the general contractor, the client shall have the right to conclude contracts with other persons for performance of individual works.  In this event, those persons shall be directly liable towards the client for the failure to perform or improper performance of the contract.


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Article 6.651. Particularities of a contract for work where the work is performed by several persons


1. Where the work is performed by two or more persons, in the event of the indivisibility of the subject matter of the obligation, they shall be liable towards the client as solidary co-debtors and co-creditors.


2. In the event of the divisibility of the subject matter of the obligation, each of the persons indicated in paragraph 1 of this Article shall acquire the rights and duties with respect to the client within the limits of the corresponding participatory share (partial obligation) unless otherwise provided for by the contract.


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Article 6.652. Time limits for the performance of work


1. The beginning and end of performance of work shall be indicated in the contract for work. The parties may also determine the time limits for completing individual stages of work (intermediate time limits).


2. Unless otherwise provided for by laws or the contract, the contractor shall be liable for the violation of the time limits for both the beginning and end of work, likewise for the violation of the intermediate time limits.


3. Upon the agreement of the parties, the time limits for the performance of the work specified in the contract may be changed in accordance with the procedure indicated in the contract for work.


4. Where the contractor violates the time limit for the performance of the entire work, the client shall have the right to refuse acceptance of the work performed as a result of fulfilment of the obligation and claim damages from the contractor related to the delay in fulfilment in the cases where, due to the delay, the fulfilment of the obligation became of no significance to the client.


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1. The contract for work shall specify the price of work or the methods and criteria for its calculation.  In the event where the price is not specified in the contract, it shall be determined in accordance with the procedure established in Article 6.198 of this Code.


2. The price indicated in the contract for work shall include the payment to the contractor for the work performed and the compensation of expenses incurred by him.


3. The price of the work specified in the contract may be determined by drawing up a definitive or approximate estimate. Where the work is performed in accordance with the estimate drawn up by the contractor, the estimate shall enter into force and become part of the contract for work from the moment it is confirmed by the client.


4. Where it is necessary to perform additional work or where, for any other important reasons, the contractor has to increase the price of some individual works, he must inform the client thereof in due time. If the client refuses to increase the price, the contractor shall have the right to withdraw from the contract. In this event, the contractor shall have the right to demand from the client payment for the work performed. The contractor who fails to inform the client in due time about the necessity to increase the price for the work must perform the contract for the price foreseen therein.


5. In the instances where a definite price for the work to be performed is indicated in the contract, the contractor shall have no right to increase


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In the instances where a definite price for the work to be performed is indicated in the contract, the contractor shall have no right to increase the price, nor the client to reduce it. The same provision shall apply to those instances where, at the moment of concluding the contract for work, it was not possible to determine the exact amount of work subject to performance nor all the expenses necessary for the performance thereof.


6. In the event of a substantial increase of the price of materials or equipment supplied by the contractor, or also of the services rendered to the contractor by third persons, and where the contractor could not have foreseen such increase at the time when the contract for work was concluded, the contractor shall have the right to demand an increase of the established price of the work or to dissolve the contract in accordance with the provisions established in Article 6.204 of this Code.


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Article 6.654. Economies of the contractor


1. In the event where the actual expenses of the contractor prove to be lower than those taken into account in determining the price of work, the contractor shall retain the right to the payment for work as established in the contract for work unless the client proves that the economies produced negative effect on the quality of work as determined in the contract.


2. A distribution of the economies received may be provided for in the contract.

 


Article 6.655. Procedure for payment for work


1. Unless advance payment for work performed or individual stages thereof has been provided for in the contract for work, the client must pay the contractor the stipulated price after the final acceptance of the results of work on condition that the work has been performed properly and on time or, with the consent of the client, before the set time limit.


2. The contractor shall have the right to demand an advance payment or an earnest only in the instances provided for in the contract.


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Article 6.656. Right of the contractor to exact remuneration due to him

Where the client fails to perform his obligation to pay the remuneration established in the contract for work or other amount agreed by the parties to the contract, the contractor shall have the right to exact the amounts due to him under the contract for the work performed using the equipment belonging to the client, balance of the unused materials, or any other property of the client, until full payment by the client, or to retain the result of the work until proper performance of the obligation by the client.

 


Article 6.657. Liability of the contractor for failure to preserve the property granted to him by the client

The contractor must take all measures necessary to ensure the preservation of the property entrusted to him by the client and shall be liable towards the client for any loss or damage of this property.


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1. The client shall have the right to verify the progress and quality of work at any time without interfering in the economic and commercial activities of the contractor.


2. In the event of the contractor failing to embark upon the performance of work on time, or where he is working so slowly that the completion of the work on time becomes clearly impossible, the client shall have the right to revoke the contract and claim compensation of damages.


3. If during the performance of work it becomes evident that it will not be properly performed, the client shall have the right to designate a reasonable period to the contractor for the elimination of defects, and in the event of the failure to perform this demand by the independent work contractor within the designated period, to revoke the contract and either claim compensation of damages or authorise a third person to rectify the work at the expense of the contractor.


4. In the event of emergence of important reasons, the client shall have the right, at any time before the work is completed, to revoke the contract at the same time effectuating payment to the contractor for the performed part of the work and compensating the damages caused by the dissolution of the contract, including into the damages the economies received by the contractor due to the dissolution of the contract.


5. In the event of defects being discovered in the course of acceptance of the work, the client shall have the right to deduct from the amounts due to the contractor for the work performed the amount


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in the course of acceptance of the work, the client shall have the right to deduct from the amounts due to the contractor for the work performed the amount necessary to eliminate the defects.  The client shall retain this right also in the instances where hidden defects of work are discovered. However, the client shall have no such right in the event where the contractor adequately ensures the performance of his obligation.


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Article 6.659. Circumstances of which the contractor is obliged to warn the client


1. The contractor must immediately warn the client and, until receiving instructions from him, suspend the work in the event of discovering:


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1. The contractor must immediately warn the client and, until receiving instructions from him, suspend the work in the event of discovering:


1) unfitness or inferior quality of the materials, other property or documents received from the client;


2) possible consequences threatening the fitness or stability of the work due to the compliance with the instructions of the client concerning the methods of performance of work;


3) other circumstances beyond the control of the contractor which threaten the fitness, stability or security of the work.


2. The contractor who fails to warn the client about the circumstances indicated in paragraph 1 of this Article, or continues to work without awaiting for the receipt of the client’s reply within the period indicated in the contract, or, where this period is not indicated, within a reasonable time, or fails to comply with the timely instructions of the client, shall not be entitled to refer to the circumstances indicated in paragraph 1 of this Article and shall be liable for the defects of the thing.


3. If the client, notwithstanding a timely and substantiated warning by the contractor concerning the circumstances indicated in paragraph 1 of this Article, within a reasonable time fails to replace unfit or inferior quality materials, other property or documents, or to change his instructions concerning the methods of performance of work, or to eliminate other circumstances which threaten the fitness or stability of the work to be performed, the contractor shall have the right to revoke the contract and claim compensation of damages.


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Article 6.660. Assistance of the client


1. The client must, in the instances and in accordance with the procedure established in the contract for work, render assistance to the contractor in the performance of work.  Where the client fails to perform this duty, the contractor shall have the right to claim from him compensation of damages, including additional expenses caused by idle time or postponement of the time limits for the performance work or by the increase of the cost of work.


2. In the instances where the performance of work under the contract has become impossible as a consequence of failure on the part of the client to fulfil his obligation indicated in paragraph 1 of this Article, or improper fulfilment thereof, the contractor shall have the right to demand the payment of the price specified in the contract, taking into account the part of the work performed, and the compensation of damages, or to dissolve the contract.


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Article 6.661. Legal effects of the failure to perform counter-duties of the client


1. The contractor shall have the right not to embark upon the work, or to suspend the work in progress in the event of failure on the part of the client to perform his counter-duties established in the contract for work (failure to grant materials, equipment, documents, etc.), or if the client obstructs the performance of the contract by the contractor, or if there any other circumstances which explicitly testify to the fact that the contractor will fail to perform his duties on time (Article 6.219 of this Code).


2. Unless otherwise provided for by the contract for work, the contractor shall have the right, in the circumstances indicated in paragraph 1 of this Article, to revoke the contract and claim compensation of damages.


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1. The client must, within the periods and in accordance with the procedure provided for in the contract for work, inspect with the participation of the contractor and accept the work performed or its result.  In the event of discovering any deviations from the terms of the contract which impair the quality of the result of work, or any other defects in the work, the client must immediately inform the contractor accordingly. The acceptance of the work performed shall be formalised by drawing up an act by which the client certifies an unconditional acceptance, or that with a reservation clause, and the contractor certifies the transfer of the work performed.


2. Having discovered any defects of work in the course of acceptance, the client may rely upon the fact of the defects only in the instances where in the act or any other document certifying the acceptance of the work performed, these defects were recorded, or the right of a subsequent claim on the part of the client concerning their elimination is stipulated.


3. Unless otherwise provided for by the contract, the client, having accepted the work without verification, shall lose the right to rely upon the fact of defects which could have been discovered by ordinary means of acceptance of the work (obvious defects).


4. Having discovered, after the acceptance of the work, defects thereof or any deviations from the contract which could not have been discovered by ordinary means of acceptance of the work (latent defects), likewise those intentionally concealed by the contractor, the client must


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which could not have been discovered by ordinary means of acceptance of the work (latent defects), likewise those intentionally concealed by the contractor, the client must notify the contractor thereof within reasonable time after their discovery. 


5. In the event where a dispute arises between the contractor and the client because of the defects of the work, each party shall have the right to demand expert examination. The expenses of the expert examination shall be borne by the contractor, except in cases where the expert examination establishes the absence of any violations of the contract on the part of the contractor, or any causal link between the actions of the contractor and the defects discovered. In such events, the expenses of the expert examination shall be borne by the party which requested such examination, and if it was designated by agreement between the parties, by both parties equally.


6. Unless otherwise provided for by the contract for work, in the event where the client evades acceptance of the work performed, the contractor shall have the right, upon the expiry of one month from the date when the work should have been accepted under the contract and after having notified the client in writing twice, to sell the result of the work and to deposit the amount received, less all payments due to him, in the name of the client (Article 6.56 of this Code).


7. In the event where the evasion of the client to accept the work entails delay in the transfer of the results of the work, the risk of accidental


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In the event where the evasion of the client to accept the work entails delay in the transfer of the results of the work, the risk of accidental perishing or damaging of the result of the work shall pass to the client from the moment when the transfer of the result to the client should have been executed.


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Article 6.663. Quality of work


1. The quality of the work performed by the contractor must conform to the conditions of the contract for work and, in the absence of any determination of quality in the contract, to the requirements ordinarily presented for work of the respective nature. The result of the work performed must, at the moment of transfer to the client, possess the characteristics specified in the contract for work or ordinarily required and must be fit for use in accordance with its designation within the limits of a reasonable period.


2. In the event where obligatory requirements for work to be performed are established by the law or the contract for work, the contractor, acting as an entrepreneur, must comply with those requirements. The parties may establish in the contract for work a duty of the contractor to perform the work in accordance with requirements which are higher than the established obligatory requirements.


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Article 6.664. Guarantee of the quality of work


1. In the event where a guarantee period for the result of the work is established by the law or the contract for work, the result of the work must correspond to the established quality requirements during the entire guarantee period.


2. Unless otherwise provided for by the contract for work, the guarantee of the quality shall extend to all component parts of the result of the work.


3. In the event of defects being discovered during the guarantee period, the contractor must gratuitously eliminate the defects or compensate to the client the expenses of their elimination.


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Article 6.665. Liability of the contractor for the improper quality of work   


1. In the instances where the work is performed with deviations from the conditions of the contract, which renders the result of the work unfit for use in accordance with its designation as determined in the contract or impairs the possibilities (conditions) for its use in accordance with its designation under the contract and, where the designation is not specified in the contract, in accordance with its ordinary use, the client shall have the right, unless otherwise provided for by the law or the contract, at his choice to require from the contractor:


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1) elimination of defects without compensation within a reasonable period;


2) commensurate reduction of the price for work;


3) compensation of his expenses for the elimination of the defects when the right of the client to eliminate them has been provided for in the contract for work.


2. The contractor shall have the right instead of eliminating the defects to perform the work anew without compensation and compensate to the client damages caused by the delay of performance. In this event, the client must return the result of work previously transferred to him to the contractor, provided that it is possible to do so in view of the character of the work.


3. Where the contractor fails to eliminate the deviations from the contract or other defects within a reasonable time, or the defects prove to be essential and cannot be eliminated, the client shall have the right to dissolve the contract and claim the compensation of damages.


4. The conditions of a contract for work which relieve the contractor from liability for certain defects shall not exempt him from liability if the client proves that such defects were caused by the fault or gross negligence of the contractor.


5. In the event where the work was performed using the materials of the contractor, the contractor shall be liable for the quality of the materials as a seller under a sales contract.


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1. Unless otherwise provided for by the law or the contract for work, the client shall have the right to present demands connected with defects in the result of work on condition that they have been discovered within the time limits established in this Article.


2. In the instances where no guarantee period is established, the defects in the result of work must be discovered within a reasonable time but not exceeding two years from the date when the result of work was transferred unless other time limits are provided for by the law or the contract for work.


3. The client shall have the right to present demands connected with defects in the result of work which were discovered within the period of guarantee.


4. In the instances where the guarantee period provided for by the contract does not exceed two years and the defects in the result of work are discovered by the client upon the expiry of the guarantee period but within the limit of two years from the date when the result of work was transferred, the contractor shall be held liable for those defects if the client proves that the defects arose before the transfer of the result of the work or for reasons which occurred before that moment.


5. Unless otherwise provided for by the contract for work, the guarantee period shall start to run from the moment when the result of the work was accepted or ought to have been accepted by the client.


6. The rules established in paragraphs 2 to 6 of Article 6.335 of this Code shall apply for the calculation


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accepted by the client.


6. The rules established in paragraphs 2 to 6 of Article 6.335 of this Code shall apply for the calculation of the guarantee period unless otherwise provided for by law or the contract for work, or any other conclusion arises from the essence of a particular contract for work.


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Article 6.667. Prescription


1. Prescription for claims arising in connection with defects of the work performed shall constitute one year, except in cases provided for by this Code.


2. In the instances where, under the contract for work, the result of the work was accepted in parts, the prescription shall commence from the date of acceptance of the result of the work as a whole.


3. In the event where a guarantee period is established by the law or the contract for work, and the statement concerning the defects was presented within that guarantee period, the prescription shall commence from the date of the statement concerning the defects.

 


Article 6.668. Duty of the contractor to transfer information to the client

The contractor must transfer to the client, together with the result of the work, information about the use of the subject matter of the contract for work if such duty of the contractor is established in the contract for work, or the character of the information is such that without it the use of the result of the work is impossible for the designation specified in the contract.


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Article 6.669. Duty of the parties in respect of confidentiality

If any of the parties in the framework of performance of a contract for work has received information from the other party considered to be commercial secret or any other confidential information stipulated in the contract, this party shall have no right to communicate such information to third persons without the consent of the other party.

 


Article 6.670. Return of property to the client

In the instances where the client dissolves the contract on the grounds provided for in paragraph 2 of Article 6.658 and paragraph 3 of Article 6.665 of this Code, the contractor must return to the client the materials and any other property transferred, and where this proves to be impossible, compensate their value in money.

 


Article 6.671. Legal effects of the dissolution of a contract for work before acceptance of the result of work

In the event of the dissolution of a contract for work on the grounds provided for by the law or contract before the acceptance of the result of work, the client shall have the right to demand transference to him of the result of the work performed, and the contractor in this event shall have the right to demand payment for the actually performed work.

 


SECTION TWO

CONTRACTING FOR CONSUMER WORK


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SECTION TWO

CONTRACTING FOR CONSUMER WORK

 


Article 6.672. Concept of a contract for consumer work


1. Under a contract for consumer work, the contractor, who is an entrepreneur, shall undertake to perform, in accordance with the order of the client, who is a consumer, certain work intended to satisfy domestic or other personal needs of the client or those of his family, while the client shall undertake to accept the result of the work performed and pay for it.


2. The contract for consumer work shall be governed by the provisions of this Code on the consumer contract.

 

 


Article 6.673. Guarantees of the client


1. The contractor shall have no right to demand inclusion of additional work or services into a contract for consumer work.  The client shall have the right to refuse payment for work or services that have not been indicated in the contract.


2. The client shall have the right, at any time before the acceptance of the result of work, to dissolve the contract, having paid a part of the determined price commensurate to the work performed.


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Article 6.674. Granting information to the client about the proposed work   


1. Prior to the conclusion of the contract, the contractor must submit to the client all the necessary and accurate information related to the proposed work, its types, price and form of payment, also, upon the request of the client, other data related to the contract and the work to be performed. In the event where it is significant due to the character of the work, the contractor must indicate to the client the specific person who will perform the work provided for in the contract. 


2. The client shall have the right to dissolve the contract without paying for the work performed and claim compensation of damages in the instances where, as a consequence of incompleteness or inaccuracy of information submitted by the contractor, a contract was concluded for the performance of work not possessing the properties which the client had in mind.


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Article 6.675. Performance of work using the materials of the contractor


1. If the work is performed using the materials of the contractor, upon the conclusion of the contract, the client shall pay for the materials the entire or a part of the price specified in the contract, the materials shall be paid for by the client when concluding the contract in whole or in a part of the price specified in the contract, with the final payment executed to the contractor after the completion of the work.


2. The contract for consumer work may specify that the material is granted by the contractor on credit, also that the client will pay for the material by instalments.


3. A change of price of the material after the conclusion of a contract for consumer work shall not entail a resettlement of accounts.

 


Article 6.676. Price and payment for work


1. The price of work shall be determined by agreement between the parties to the contract for work.


2. The work must be paid for by the client after the transference of the result of the work by the contractor.  With the consent of the client, the work may be paid for when concluding the contract in full or by issuing an advance, or the payment may be effectuated later at the time agreed upon by the parties.


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Article 6.677. Duty of the contractor to notify the client about the conditions of use of the result of work

In transferring the result of work to the client, the contractor must notify him about the conditions of its use and indicate to the client the requirements to be complied with when using the result of the work, as well as possible consequences for the client himself and other persons of the failure to comply with such requirements.


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Article 6.678. Legal effects of discovery of defects in the work


1. In the event of the discovery of defects during the acceptance of the result of work or during the use thereof, the client must, within the time limits established in Article 6.666 of this Code, at his choice, present one of the demands stipulated in Article 6.665 of this Code, or require repeated performance of the work without compensation, or claim compensation for the expenses incurred by him for the elimination of the defects.


2. The demand concerning the elimination without compensation of such defects in the result of the work which may pose danger to the life or health of the client or other persons may be presented by the client or his legal successor within two years, and where the subject matter of the contract was a building, installation or any other construction works, within the period of ten years from the moment of acceptance of the result of work unless a more extended period is determined by laws or the contract. Such demand may be presented irrespective of when these defects were discovered, likewise if they were established after the expiry of the guarantee period.


3. Where the contractor fails to fulfil the demands specified in paragraph 2 of this Article, the client shall have the right, within the same period, to require either the return of part of the price paid for the work or compensation for the expenses incurred by him for the elimination of the defects.


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Article 6.679. Legal effects of the failure by the client to appear for receipt of the results of work


1. In the event of the failure by the client to appear for receipt of the result of work or other avoidance to accept the work, the contractor must warn the client in writing of his duty to accept the result of the work.


2. In the event of the failure by the client to take over the result of work within two months from the date of the warning indicated in paragraph 1 of this Article, the contractor shall have the right to sell the subject matter of the contract for a reasonable price and to deposit the amount received, less all payments due to him, in the name of the client into a depository account of the notary, bank or any other credit institution located in the place of residence of the client.

 


Article 6.680. Rights of the client in the event of the failure by the contractor to perform the work indicated in the contract or improper performance thereof

In the event of the failure by the contractor to perform the work indicated in the contract for consumer work or improper performance thereof, the client shall have the right to take advantage of the rights of a purchaser established in Article 6.334 of this Code.

 


SECTION THREE

CONSTRUCTION CONTRACTING


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SECTION THREE

CONSTRUCTION CONTRACTING

 


Article 6.681. Concept of a construction contract


1. Under a construction contract, the contractor shall undertake, within the period established in the contract, to build the construction works or perform other construction work according to the task of the client, while the client shall undertake to create the necessary conditions for the contractor to perform the construction work, to accept the result of the work performed, and pay the price stipulated in the contract.


2. A construction contract shall be concluded for the construction or reconstruction of enterprises, buildings, dwelling houses and other construction works, as well as for the performance of assembly, launching or any other work. The provisions of this Section shall likewise apply to work related to major repairs of buildings or installations unless otherwise provided for by the contract.


3. A construction contract may establish the duty of the contractor to ensure the maintenance of the constructed object after its acceptance by the client within a period specified in the contract.


4. In the instances when under a construction contract the work is performed for the purpose of satisfaction of a natural person’s (client’s) personal, family or household needs not related with his business or profession, the provisions governing the contract for consumer work shall apply to this contract.


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Article 6.682. Distribution of risk between the parties


1. The risk of accidental perishing or damage of the object of construction or a part thereof shall be borne by the contractor until its acceptance by the client.


2. In the event of accidental perishing or damage of the object of construction or a part thereof before its acceptance as a consequence of inferior quality of materials, components or structures granted by the client, or due to the performance of erroneous instruction of the client, the contractor shall have the right to demand payment of the entire price of the work indicated in the contract, provided that the contractor has performed the duties established in paragraph 1 of Article 6.659 of this Code.  In the event of the failure by the client to comply with the request of the contractor to change materials, components, structures or instructions which may pose a threat to the surroundings or would result in essential violations of the technical regulations established in the construction documents, the contractor must immediately dissolve the contract.


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Article 6.683. Insurance of the object of construction


1. A construction contract may establish the duty of the party on whom the risk of accidental perishing or damage of the construction object is placed to insure the construction object, materials or other property used in the construction process, likewise the duty to insure civil liability of that party for damage caused to other persons.  


2. The party on whom the duty to insure the construction object or his civil liability is placed must submit to the other party, within the periods established in the contract, the evidence of conclusion of the contract of insurance, also the data on the insurance enterprise, the sum of insurance and the essential conditions of insurance.


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1. The contractor must perform the construction work in accordance with the requirements established in the technical construction regulations and the contract/contractual documentation determining the price of work and quality requirements applicable to the construction works/work.


2. The composition of the documents related with the contract (technical construction regulations) must be indicated therein. The contract must likewise specify which of the parties and within what period must grant certain technical construction regulations.


3. Unless otherwise provided for by the construction contract, the contractor shall be deemed to be obliged to perform himself all the work indicated in the technical construction regulations.


4. Where the contractor discovers, in the course of construction, the need for work which is not indicated in the technical construction regulations and which requires performance of additional construction work and a corresponding increase in the price of the contract, the contractor must inform the client accordingly. Where the contractor does not receive a reply from the client to his communication within the period established in the contract or, where such period is not indicated in the contract, within a reasonable time, the contractor shall have the right to suspend the performance of the work concerned. In this case, the damages caused by the suspension of the work must be borne by the client unless he proves the absence of necessity to perform additional work.


5. In the event of the failure by the contractor to perform the duty indicated in paragraph 4 of this Article, he shall be deprived of the right to demand payment from the client for the


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by the contractor to perform the duty indicated in paragraph 4 of this Article, he shall be deprived of the right to demand payment from the client for the additional work performed and claim compensation of damages incurred unless he proves that the necessity for immediate actions was in the interests of the client while the suspension of work might have brought about perishing or damage of the construction object.


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Article 6.685. Change in the contractual documentation


1. The client shall have the right to make changes in the contractual documentation on condition that the price of the additional work caused by the changes does not exceed fifteen per cent of the total price of construction work specified in the contract, and the changes do not alter the character of the work provided for in the contract. The parties may also provide for other conditions for making changes in the contractual documentation.


2. The contractor shall have the right to demand a revision of the price of the contract if, for reasons beyond his control, the actual price of the work has increased by more than fifteen per cent (Article 6.204 of this Code).


3. The contractor shall have the right to claim compensation for reasonable expenses incurred by him in connection with the establishment and elimination of the defects in the contractual documentation.


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Article 6.686. Supply of materials and equipment for construction


1. The duty relating to the supply of materials, equipment, components and other structures for construction shall be borne by the contractor unless the construction contract attributes this duty to the client.


2. The party whose duty it is to supply materials and equipment for construction shall be liable for the defects thereof which render those materials and equipment impossible to be used without impairing the quality of the construction work unless it is proved that it was impossible to use those materials and equipment due to circumstances for which the other party is liable.


3. In the event where the defects referred to in paragraph 2 of this Article are discovered in the materials and equipment provided by the client, and the client refuses to replace them, the contractor must dissolve the contract and demand payment for the actually performed work.


4. The contractor shall have no right to use the materials provided by the client for his own needs unless otherwise provided for by the contract for work.

 


Article 6.687. Payment for work


1. The client must pay for the construction work performed within the periods and in accordance with the procedure determined in the construction contract.


2. The parties may agree upon payment at certain periods or in full after acceptance of the object of construction.


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Article 6.688. Other duties of the client


1. The client must provide, in a timely manner, a land plot for construction (construction site).  The size and condition of the land plot provided must conform to the conditions specified in the construction contract and enable the timely commencement of proper performance and timely completion of the construction by the contractor.


2. In the instances and in accordance with the procedure provided for by the contract, the client must also transfer for the use of the contractor buildings and installations, provide transportation services, install temporary electric power or water supply networks, obtain the necessary permits authorising the contractor to perform certain work, as well as render other services provided for in the contract.


3. Payment for the services specified in paragraph 2 of this Article shall be effectuated in the instances and pursuant to the procedure established in the construction contract.


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Article 6.689. Right of the client to control and supervise construction work


1. The client shall have the right to exercise control and supervision of the course and quality of construction work being performed, the compliance with the schedules of construction work, the quality of the materials supplied by the contractor, and the use of the materials provided by the client.  In implementing this right, the client shall have no right to interfere in the economic and commercial activities of the contractor.


2. Upon the discovery of any deviations from the conditions of the contract which may impair the quality of construction work or any other defects, the client must immediately notify the contractor thereof. Failure by the client to notify about the detected defects shall deprive him of the right to rely on them in the future.


3. The contractor must follow the client’s instructions received in the course of the construction if such instructions are not contrary to the conditions of the construction contract and the technical construction regulations, and do not represent interference in the economic and commercial activities of the contractor.


4. Where the contractor fails to properly perform the contract, he shall have no right to rely on the fact that the client failed to exercise control and supervision of the construction work, except in the cases where the duty of the client to exercise such control and supervision is established by law or the contract.


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Article 6.690. Participation of the projecting and other institutions in the fulfilment of the duties and exercise of the rights of the client


1. The client shall fulfil his duties and exercise his rights relating to control and supervision of the construction with the participation of the projecting and other institutions (engineer, constructor, consultant, etc.). The rights and duties of the projecting institution relating to control and supervision of the construction shall be determined in the contract concluded between the client and the projecting and other institutions, as well as in the construction contract.


2. The list of construction works subject to authorial supervision of the construction to be exercised by the projecting institution shall be determined by the technical construction regulations.


3. Mandatory expert examination of projects may be established by laws.


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Article 6.691. Cooperation of the parties to a construction contract


1. In the course of performing a construction contract, the parties to the contract shall be obliged to cooperate (duty of cooperation). In the event of appearance of obstacles which hinder proper performance of the contract, each of the parties to the contract shall be obliged to take all reasonable measures within their control to eliminate such obstacles. The party which fails to perform this duty shall lose the right to claim compensation of damages caused by the failure to eliminate the relevant obstacles.


2. Expenses incurred by a party in eliminating the obstacles specified in paragraph 1 of this Article shall be borne by the other party in the instances and amounts determined in the construction contract.

 


Article 6.692. Duties of the contractor related to ensuring environmental protection and work safety

When performing construction and work connected therewith, the contractor must comply with the requirements of laws and technical construction regulations concerning environmental protection and work safety. The contractor shall be liable for the violation of these requirements.


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Article 6.693. Legal effects of conservation of construction work

If, for reasons beyond the control of the parties, the construction work is suspended and the construction object subjected to conservation, the client must effectuate payment in full for all the construction work performed until conservation, likewise compensate damages caused by the suspension of work and conservation of the object, including therein all the advantages which the contractor has received or could have received as a consequence of the termination of work.


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1. Upon receipt of the contractor’s notification of the readiness to hand over the result of work or, where this is provided for in the contract, of the completion of a stage of the work performed, the client must immediately  embark upon the acceptance thereof. The conditions of handing over and acceptance of work shall be determined by laws and the contract for work concluded by the parties.


2. The acceptance of work shall be organised and effectuated by the client at his expense unless otherwise provided for by the construction contract. In the instances provided for by laws and technical construction regulations, representatives of the relevant state and municipal institutions shall participate in the acceptance of the result of work.


3. Having accepted the result of an individual stage of work, the client shall bear the risk of accidental perishing or damage of this result, except in cases where this occurs due to the fault of the contractor. In the instances where the client starts to use the construction works before acceptance, the risk of accidental perishing thereof shall be borne by the client unless otherwise provided for by the contract.


4. The handing over of the work and the acceptance thereof shall be formalised by an act to be signed by both parties. In the event of the refusal of one of the parties to sign the act, a relevant notation shall be made thereon, and the act shall be signed by the other party. A unilateral act of handing over may be declared null and void by the court if


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thereon, and the act shall be signed by the other party. A unilateral act of handing over may be declared null and void by the court if it decides that the first party had substantial grounds for the refusal to sign the act.


5. In the instances provided for by laws or the construction contract or where it arises from the character of work, preliminary testing and control measurements must be performed prior to the acceptance of the result of the work. In those instances, the acceptance of work may be effectuated only upon obtaining positive results of the preliminary testing and control measurements.


6. The client shall have the right to refuse acceptance of the result of work in the event of discovery of defects which render it impossible to use the result for the purposes established in the construction contract and which cannot be eliminated by the client or the contractor.


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Article 6.695. Liability of the contractor for the quality of work 


1. The contractor shall be liable to the client for any deviations from the requirements of the technical construction regulations and also for the failure to achieve the indicators of the objects of construction specified in these documents or the contract (productive capacity of the enterprise, resistance, etc.).


2. In the event of reconstruction of constructions works and installations, the contractor shall be liable for any reduction or loss of reliability, durability or resistance of the construction works or installations.


3. The contractor shall not be liable for minor deviations from the technical construction regulations made with the consent of the client if he proves that these deviations have not influenced the quality of the construction object and will not bring about any negative consequences.


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Article 6.696. Liability for the collapse of a construction works


1. The contractor, the architect, the contractor of an expert examination of the design documentation of a construction works and the technical supervisor of the construction shall be respectively liable for the collapse of the constructions works and the resultant damage if the object collapsed due to the defects in the design, constructions or the performance of construction work, or due to unsuitable ground soil.


2. The architect, the contractor of an expert examination of the design documentation of the construction works, or the technical supervisor of the construction may be relieved from liability if it is proved that the collapse of the object was not caused by defects in the design, constructional defects or inadequate supervision or control of the construction work, but through faulty actions of the contractor or the client.


3. The contractor may be relieved from liability if it is proved that the collapse of the object occurred through the fault of the architect, the contractor of an expert examination of the design documentation of the construction works, or the technical supervisor of the construction who were chosen by the client, or through faulty actions of the client.


4. Where it is impossible to establish through the fault of which of the specific persons indicated in paragraph 1 of this Article the collapse of the construction works has occurred, they shall all be solidarily liable.


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Article 6.697. Guarantee of the quality of work


1. Unless otherwise provided for in the construction contract, the contractor shall ensure, throughout the whole guarantee period, the compliance of the object of construction with the indicators established in the technical construction regulations and its fitness for use for the designation specified in the contract.


2. The parties to the contract shall have the right to establish, upon their agreement, a more extended guarantee period.


3. The contractor, the architect, the contractor of an expert examination of the design documentation of the construction works, and the technical supervisor of the construction shall be liable for the defects discovered within the guarantee period unless it is proved that the defects occurred as a consequence of the normal wear and tear of the object or parts thereof, its inappropriate use, or improper repair made by the client or third persons engaged by him, or any other faulty actions of the client or third persons engaged by him.


4. The guarantee period shall be interrupted for the entire period during which the object could not be used as a consequence of the discovered defects for which the contractor is liable.


5. Upon discovering defects of the object within the guarantee period, the client must make a claim to the contractor within a reasonable time from their discovery.


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Article 6.698. Guarantee periods


1. The contractor, the architect, the contractor of an expert examination of the design documentation of the construction works and the technical supervisor of the construction shall be liable for the collapse of the object or any defects if the object collapsed or the defects were discovered within the time limit of:


1) five years;


2) ten years, where hidden elements of the construction works (constructions, pipelines, etc.) exist;


3) twenty years, where intentionally concealed defects exist.


2. The time limits specified in paragraph 1 of this Article shall start to run from the day when the result of all the work completed by the contractor is handed over to the client (when the construction is carried out by contracting) or from the day of completion of construction (in the case of self-dependent or mixed-type construction).


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Article 6.699. Elimination of defects at the expense of the client


1. A construction contract may provide for the duty of the contractor, at the request of the client and at the client’s expense, to eliminate the defects of the work for which the contractor is not held liable.


2. The contractor shall have the right to refuse fulfilment of the duty indicated in paragraph 1 of this Article in the instances where the elimination of the defects is not directly connected with the subject matter of the construction contract or they cannot be eliminated for reasons beyond the control of the contractor.

 


SECTION FOUR

CONTRACTING FOR DESIGN AND SURVEY WORK

 


Article 6.700. Concept of a contract for design and survey work

Under a contract for design and survey work, the contractor (architect, surveyor) shall undertake to perform survey and design work in accordance with the task of the client, draw up technical documentation or produce any other result of work and transfer it to the client, while the latter shall undertake to accept the result and pay for it.


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Article 6.701. Task of design and survey work


1. Within the periods and in accordance with the procedure established in the contract, the client must submit to the contractor the task for design and survey work as well as any other data necessary for drawing up the technical documentation. The task and other primary data may also be prepared by the contractor under the authorisation of the client. In that event, the task shall become obligatory to both parties from the moment when it is confirmed by the client.


2. The contractor must perform the work in compliance with the requirements of the task and other primary data and may depart therefrom only with the consent of the client.


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Article 6.702. Duties of the contractor


1. The contractor must:


1) perform design and survey work in accordance with the requirements established by the contract, the task and other primary data;


2) coordinate the prepared technical documentation with the client in accordance with the procedure stipulated in the technical construction regulations, and in the cases established by the law, with the relevant state or municipal institutions, or perform an expert examination of the technical documentation;


3) cooperate with the client in the course of performing the work and coordinating the prepared technical documentation;


4) within the periods and in accordance with the procedure established in the contract, transfer the prepared technical documentation or the result of the survey work to the client;


5) safeguard commercial secrets or any other confidential information of the client.


2. The contractor shall have no right to transfer the result of work to third persons without the consent of the client.


3. The contractor must guarantee to the client the absence of the right of any third persons to prohibit or obstruct the performance of design or survey work, nor prohibit or obstruct the performance of work in accordance with the technical documentation prepared by the contractor.


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Article 6.703. Liability of the contractor for the quality of work


1. The architect/surveyor shall be liable for improper drawing up of the technical documentation or performance of survey work, as well as for the re-performance of the construction work as a consequence of improperly performed design/survey work or improperly drawn up technical documentation, as well as for defects of work/documentation which were discovered in the course of the work in accordance with the prepared technical documentation or when accepting the result of survey, or in the process of operation of the object produced on the basis of that work.


2. In the instances of discovery of defects in the technical documentation or in the survey work, the contractor must, at the request of the client, correct without compensation the defects of the technical documentation or re-perform the survey work, and compensate for the damage to the client, unless otherwise provided for by the contract.


3. Mandatory expert examination of projects may be established by laws.


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Article 6.704. Duties of the client

In accordance with a contract for design and survey work, the client must:


1) pay to the contractor the established price in full after the completion of all the work or in parts after the completion of individual stages of work provided for in the contract; 


2) use the result of work received from the contractor exclusively for the purposes specified in the contract, not transfer it to third persons, nor publish the data of the result of the work without the consent of the contractor;


3) cooperate with the contractor in the course of work and coordination of the prepared technical documentation;


4) compensate the contractor for additional expenses caused by a change of the task or the primary data, where the changes were conditioned by the circumstances beyond the control of the contractor;


5) involve the contractor as a third person in a lawsuit brought against the client by third persons in connection with defects in the technical documentation or design and survey work.

 


SECTION FIVE

CONTRACTING FOR WORK FINANCED FROM THE BUDGET OF THE STATE

OR MUNICIPALITIES


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Article 6.705. Performance of construction and design work for the needs of the State or municipalities


1. Construction, design or survey work, as well as architectural and engineering activities and related technical consultations intended for the satisfaction of the needs of the State or municipalities financed from the budget of the State or municipalities shall be performed under contracts for works concluded on the basis of a public tender, except in cases provided for by laws.


2. Contracts for works referred to in paragraph 1 of this Article shall be governed correspondingly by provisions of this Code unless otherwise provided for by laws.

 


Article 6.706. Content of a contract for work concluded on the basis of a public tender

In the event where a contract for work is concluded on the basis of a public tender, the content of the contract shall be determined in accordance with the announced conditions of the tender and the proposals submitted by the contractor who has won the tender.

 


CHAPTER XXXIV

RESEARCH, EXPERIMENTAL,

DEVELOPMENT AND TECHNOLOGICAL WORK


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Article 6.707. Concept of a contract for research, experimental, development or technological work


1. Under a contract for research, one party (the executor) shall undertake to conduct research in accordance with the terms of reference of the other party (the client), and, in accordance with a contract for experimental, development or technological work, to work out a model of a new product or its production development documentation, or a new technology, while the client shall undertake to accept the work and pay for it.


2. A contract with the executor may be concluded for the performance of the work in total or for its individual stages (elements).


3. Unless otherwise provided for by laws, the risk of accidental impossibility to perform the contract shall be borne by the client.


4. The conditions of the contract must correspond to the provisions on intellectual property established by this Code and other laws.


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Article 6.708. Performance of work


1. The executor must conduct research personally. The executor shall have the right to involve third persons for the performance of research work pursuant to the contract only upon a written consent of the client.


2. The executor shall have the right to involve third persons for the performance of experimental, development or technological work unless otherwise provided for by the contract.  Relations between the executor and third persons shall be governed accordingly by Article 6.650 of this Code.

 


Article 6.709. Confidentiality of information


1. Unless otherwise provided for by the contract, both parties must ensure confidentiality of information related with the subject matter of the contract, the performance of the contract and the results obtained.  The type of information to be deemed confidential pursuant to the contract shall be determined by agreement between the parties.


2. Each of the parties may divulge the information deemed confidential pursuant to the contract exclusively upon the consent of the other party.


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Article 6.710. Right of the parties to the result of work


1. The parties to the contract shall have the right to use the result of work performed to the extent and on the terms determined in the contract.


2. Unless otherwise provided for by the contract, the client shall have the right to use the results of the work transferred, and the executor shall have the right to use the results of the work obtained for their own needs.   

 


Article 6.711. Duties of the executor

Under a contract for research, experimental, development or technological work, the executor must:


1) perform the work in accordance with the terms of reference agreed upon with the client and transfer the results of the work to the client within the period indicated in the contract;


2) agree with the client upon the necessity of using the legally protected results of intellectual activity that belong to third persons and the acquisition of the rights for the use thereof;


3) eliminate by his own means and at his own expense defects violating the conditions of the contract or the terms of reference, which occurred through his fault;


4) immediately inform the client about the impossibility of obtaining the anticipated results or the inexpediency of continuing the work;


5) guarantee to the client that the transferred results of the work performed do not violate the exclusive rights of other persons.


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Article 6.712. Duties of the client


1. The client must transfer to the executor the information indicated in the contract as necessary for the performance of work, accept the results of the work performed and pay for them.


2. The contract may provide for the duty of the client to transfer to the executor the terms of reference and agree with him upon the programme and theme of the work.

 


Article 6.713. Impossibility of achieving the anticipated results in conducting research

In the event where, in the course of conducting research, it becomes obvious that it is impossible to achieve the anticipated results as a consequence of circumstances beyond the control of the executor, the client shall be obliged to pay the executor for the work performed before the impossibility became obvious, but not in excess of the respective part of the price of the work specified in the contract.


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Article 6.714. Impossibility of continuing experimental, development or technological work

In the event where, in the course of performance of experimental, development or technological work, it becomes obvious that it is impossible or inexpedient to continue the work through no fault of the executor, the client shall be obliged to pay a part of the price of the work specified in the contract which is proportional to the part of the work performed, as well as to pay other reasonable expenses incurred by the executor in attempting to perform the work.

 


Article 6.715. Liability of the executor for violation of the contract


1. The executor shall be liable towards the client for violation of the contract unless he proves that the contract was violated not through his fault.     


2. The executor shall be obliged to compensate to the client for the damages caused by the defects of the work within the limits of the value of the work performed in the event where it is established in the contract that the damages shall be subject to compensation within the limits of the value of the work performed. Lost incomes shall be compensated only in the instances provided for in the contract.

 


CHAPTER XXXV

PROVISION OF REMUNERATIVE SERVICES

 


SECTION ONE

GENERAL PROVISIONS


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SECTION ONE

GENERAL PROVISIONS

 


Article 6.716. Concept of a service contract


1. Under a service contract, one party (the provider of services) shall undertake to provide to the other party (the client), by commission of the latter, certain services of non-material nature (intellectual) or other services which are not related to the creation of a material object (to perform certain actions or pursue certain activities), and the client shall undertake to pay for the services provided.


2. The provisions of this Chapter shall apply only to those services in respect of which no relationship of employment or other subordination exists between the provider of services and the client.


3. The rules established by the provisions of this Chapter shall apply to the provision of audit, consultancy, personal healthcare, veterinary, information, education, tourist or other remunerative services, to the exclusion of the services provided in accordance with the rules laid down in Chapters XXXIII, XXXIV, XXXVI, XXXVIII, XL, XLI, XLII, XLIV, XLVI, XLVII and L of this Book.


4. The consumer service contract shall be governed by the provisions of this Code on the consumer contract.


5. Other laws may establish additional requirements applicable to remunerative services of individual types, which are not provided for in this Chapter.


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Article 6.717. Performance of the service contract


1. Unless the service contract establishes otherwise, the provider of services must provide the services himself.


2. In compliance with the contract, the provider of services shall be free to choose the methods and measures to perform the contract.


3. Unless the contract establishes otherwise, the provider of services may involve third persons to perform the contract. In the latter case, however, the provider of services shall be personally liable to the client for the proper performance of the contract.


4. Where services are provided by more than one person, all providers of the services shall be liable for the proper performance of the contract, to the exclusion of the cases where the non-performance of the contract or improper performance thereof occurred through no fault of anyone of them.


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1. The provider of services must be honest and reasonable in the provision of services, so as to serve the best interests of the client.


2. Having regard to the type of services, the provider of services must, in the provision of services, act in accordance with the established practices and standards applicable to the relevant profession.


3. The provider of services must provide the services in accordance with the terms of the contract and following the instructions of the client. If the instructions of the client are in violation of laws, established rules of the professional activities, standards, professional ethics or the terms of the contract, the provider of services shall have the right to refuse to follow such instructions and to terminate the contract.


4. The provider of services shall have the right to deviate from the terms of the contract or the instructions of the client where specific circumstances necessitate such deviation for the interests of the client or in order to discharge the latter’s commission, and where the executor was unable to inform the client thereof in advance.  In this case, the executor must notify the client of the deviations as soon as the circumstances permit.


5. If the contract provides for an obligation on the part of the provider of services to achieve a certain result, the provider of services may be relieved from liability for the non-performance of the said obligation only where the provider of services proves that he could not meet the obligation for reasons of force majeure.


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the non-performance of the said obligation only where the provider of services proves that he could not meet the obligation for reasons of force majeure.


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Article 6.719. Duty of the provider of services to furnish information  


1. Before entering into a service contract, the provider of services must provide the client with detailed information concerning the nature of the services to be provided, the terms of their provision, the price of the services, the schedule for the provision thereof, possible consequences, and any other information which may have an influence on the client’s determination to enter into the contract.  


2. Where public services are rendered, or where the provision of services constitutes a business of the provider of services, the client must be given public access to the information indicated in paragraph 1 of this Article either at the registered office of the provider of services or at any other place freely accessible to each potential client.


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1. The price of services shall be fixed by agreement between the parties and may be modified after the conclusion of the contract only in accordance with the terms of the contract and in the cases stipulated by the contract.


2. The client shall be obliged to pay an increase in the price of services exceeding the price fixed at the time of the conclusion of the contract only where the provider of services furnishes proof that the increase was unavoidable to ensure proper performance of the contract and could not have been foreseen at the time of the conclusion of the contract.


3. The client shall pay for the services rendered within the time and in accordance with the procedure established in the contract.  Unless the contract provides otherwise, the client shall be obliged to pay the whole price when all the contracted services are provided.  By agreement between the parties, part of the price may be paid at the time of the conclusion of the contract or at any agreed time thereafter, and the final settlement shall be effectuated upon the performance of the contract by the provider of services.


4. If the performance of the contract is impossible through the fault of the client, the client shall be obliged to pay the whole price fixed in the contract, unless the contract provides otherwise.


5. If the performance of the contract is impossible as a result of the circumstances for which no party to the contract is responsible, the client shall be obliged to remunerate the provider of services for the actual expenses incurred


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the circumstances for which no party to the contract is responsible, the client shall be obliged to remunerate the provider of services for the actual expenses incurred by the latter, unless the contract provides otherwise.


6. The client shall also be obliged to reimburse the provider of services for the expenses incurred by the latter and related to the performance of the contract to the extent that such expenses are not covered by the price of the services. The client shall also be obliged to reimburse the provider of services for the latter’s losses related to the provision of services and incurred at the time of the provision of services in the event of unforeseen specific circumstances for which the provider of services is not responsible. Where the provision of certain services constitutes professional activities (business) of their provider, the client shall be obliged to reimburse such provider for the losses incurred by the latter only where the losses result from specific circumstances not covered by a normal risk characteristic to a certain type of profession or business.


7. If services are provided by commission of two or more clients, all the clients shall bear solidary liability to the provider of services in the cases provided for in this Article.


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Article 6.721. Unilateral termination of the contract


1. The client shall have the right to unilaterally terminate the contract even though the provision of services by the provider is already in progress. In this case, the client must pay the provider of services a part of the agreed price in proportion to the services rendered and reimburse other reasonable expenses incurred by the provider of services for the purpose of performance of the contract before the date of receipt of the notice of termination of the contract from the client.


2. The provider of services shall have the right to terminate the contract unilaterally for important reasons only.  In this case, the provider of services must fully reimburse the client for the losses incurred.

 


Article 6.722. Report of the provider of services 

Unless the service contract provides otherwise, the provider of services must:


1) at the request of the client, communicate to him all the information on the services rendered and the progress in their provision;


2) at the request of the client, forthwith submit a report to the client on the services rendered or progress in their provision;


3) forthwith furnish to the client all what the provider of services has received during the provision of services for the benefit of the client.


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Article 6.723. Termination of the service contract


1. The death of the client does not terminate the contract unless it has been entered into specifically in view of the personal qualifications of the client, or the performance of the contract thereby becomes impossible or useless. The contract on the said grounds shall be terminated from the date the provider of services becomes aware or ought to have become aware of the death of the client. The provider of services must, in all cases, ensure that all adequate measures available to him are taken to protect the interests of the client.


2. The contract shall be terminated by the death or legal incapacity in this area of the provider of services, or his limited legal capacity in this area unless analogous services may be adequately continued by his successors who are entitled thereto. The successors of the provider of services, who are aware of the commission, must ensure that all adequate measures available to them are taken to protect the interests of the client.


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Article 6.724. Subsidiary application of other provisions of this Code to service contracts

The provisions of this Book, which establish general provisions of the contract for work (Articles 6.644 to 6.671) and regulate the contract for consumer work (Articles 6.672 to 6.680) shall apply to service contracts in so far as they are not in violation of Articles 6.716 to 6.723 of this Code and peculiarities of the subject matter of the service contract.     

 


SECTION TWO

PROVISION OF PERSONAL HEALTHCARE SERVICES


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1. Under a contract for personal healthcare services, a person who is entitled to provide healthcare services due to his professional or business activities (the provider of healthcare services) shall undertake to provide to the other party (the patient) healthcare services stipulated in the contract, and the patient shall undertake to pay the agreed price to the provider of healthcare services. Where personal healthcare services are provided to a third person rather than the person who has entered into the contract, the said third person shall be considered as the patient (the actual recipient of personal healthcare services).  In this case, the person who has entered into the contract shall be the client.


2. The concept of personal healthcare services referred to in paragraph 1 of this Article shall mean activities, including examination and counselling directly relating to an individual, undertaken for the purpose of treating the individual, preventing him from falling ill or assessing the condition of his health. This concept shall also include nursing of the patient and related activities, as well as material provision for the patient, which is necessary for the pursuit of personal healthcare activities, with the exception of pharmaceutical activities.


3. The rules of this Section shall not apply to the following types of activities: activities intended for determining the health condition of an individual or for providing healthcare to an individual who is represented by the provider of such care in the settlement of a dispute in court or in the fulfilment of obligations, so that the represented individual receives insurance benefits or social benefits; as well as activities


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settlement of a dispute in court or in the fulfilment of obligations, so that the represented individual receives insurance benefits or social benefits; as well as activities aimed at determining one’s endowment or aptitude for learning, fitness to work or to perform a specific type of activity; and forensic pathology. Similarly, the rules of this Section shall not apply to personal healthcare services the costs of which are paid (compensated), pursuant to laws, from the budget of the compulsory health insurance fund, the State budget or municipal budgets.


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Article 6.726.  Patients who are minors


1. A minor who has reached the age of sixteen may enter into the contract for personal healthcare services in his own name and perform other legal actions directly related to such a contract. 


2. A minor who has reached the age of sixteen shall be responsible for the fulfilment of all obligations arising from this contract, and this may not have any affect on his parents’ duty to bear the costs of care for and upbringing of the minor.


3. Laws may provide for the cases where only a person of full age may become party to the contract for personal healthcare services.


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Article 6.727. Provision of information to the patient


1. The provider of personal healthcare services must inform the patient, in a form comprehensible to the latter and with an explanation of the special medical terms involved, of the condition of his health, disease diagnosis, possible treatment methods, prognosis of the treatment and other circumstances which may have an effect upon the patient’s decision to consent to or refuse the proposed treatment, as well as of the consequences of the patient’s refusal of the proposed treatment.


2. The provider of personal healthcare services shall have the right to withhold the information indicated in paragraph 1 of this Article from the patient only in those instances where such notification would have a detrimental effect upon the patient (would cause harm to the health of the patient or even endanger his life). In such instances, all the information indicated in paragraph 1 of this Article shall be submitted to the patient’s representative and shall be considered as information provided to the patient.  The said information shall be communicated to the patient as soon as the risk of causing the said harm to the patient by the notification of such information is eliminated.


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Article 6.728. Right not to know


1. The information provided for in paragraph 1 of Article 6.727 of this Code must not be provided to the patient against his will. The will of the patient must be clearly expressed and attested by his signature. 


2. The restrictions on the provision of information to the patient, as provided for in paragraph 1 of this Article, shall not apply where the patient’s reluctance/refusal to receive information may result in harmful effects upon the patient or other individuals.


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Article 6.729. Consent of the patient


1. The patient may not be treated or be provided any other healthcare and/or nursing against his will, unless otherwise established by legislation. The laws may provide for the cases where a written consent of the patient is required for the provision of healthcare services to the patient.


2. The patient under the age of sixteen may not be treated or be provided any other healthcare and/or nursing against the will of at least one of his parents or his statutory representative, unless the laws provide otherwise. The patient under the age of sixteen, on condition that his age and the level of development permit him to correctly assess the condition of his health and a proposed course of treatment, may not be treated against his will, unless the laws provide otherwise. The laws may provide for the cases where a written consent of at least one of the parents of the minor or of his statutory representative is required to provide healthcare services to the patient. The doctor must select the methods of treatment that would most suit the interests of the minor.


3. The modalities of treatment of the patient and the patient with mental or behavioural disorders who are unable to correctly assess the condition of their own health shall be established by the relevant laws.


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Article 6.730. Indication of the patient’s consent in his medical documents 

The provider of personal healthcare services must include information on all the actions undertaken (personal healthcare services), to which the patient has given his consent, into the medical documents of the patient, and the patient or his representative must attest these documents by their signature.

 


Article 6.731. Cooperation of the patient with the provider of personal healthcare services

The patient must give to the provider of personal healthcare services all possible information and assistance which may be reasonably required for the performance of the contract.

 


Article 6.732. Degree of care

In the pursuit of his activities, the provider of personal healthcare services must ensure such a degree of care which is expected from an honest provider of personal healthcare services.  His activities must be based on responsibility stipulated by the relevant laws, other legal acts and professional standards of providers of healthcare services.

 


Article 6.733. Necessity of patients’ medical documents

Providers of personal healthcare services must keep at their disposal (process and fill in) patients’ medical documents of the established form and type (patient medical records and other medical documentation), fill in the said documents and store them in accordance with the procedure prescribed by laws.


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Article 6.734. Destruction of records in the medical documents 


1. The provider of personal healthcare services shall destroy the documents indicated in Article 6.733 of this Code within a period of three months after the destruction is demanded (requested) by the patient, with the exception of derogations established by the relevant laws.


2. Paragraph 1 of this Article shall not apply if a request for destruction concerns the stored documents, which may reasonably be considered as having a certain legal or medicinal value to other individuals rather than the patient, as well as in cases where the destruction of the documents is forbidden by the relevant law.


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Article 6.735. Patient’s right to access the records contained in his medical documents 


1. The patient must, at his request, be provided with all his medical documents, with the exception of cases when this may be harmful to the patient’s health or even endanger his life. In the said cases, the restrictions on the provision of information must be noted in the medical documents of the patient.


2. The patient shall have the right to request that copies of his medical documents be made at the expense of the patient. This right of the patient may be restricted only in accordance with the procedure prescribed by laws. The provider of personal healthcare services must explain to the patient the meaning of the records contained in his medical documents. If the request of the patient is based on reasonable grounds, the doctor must rectify, complete, eliminate, clarify and/or change the inaccurate, non-exhaustive or ambiguous data, or the data which is not related to the diagnosis, treatment or nursing.


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Article 6.736. Provision of information


1. The provider of personal healthcare services may not furnish any other persons with the information on the patient without the latter’s consent and may not give access to the copies of the official documentation referred to in Article 6.733 of this Code. If information is nevertheless provided to other persons, it may be provided in so far as this does not cause any harm to the private life of the patient or any other person. Information on the patient must be furnished if the provision of information is prescribed by legislation.


2. Persons directly participating in the performance of the contract for healthcare services as well as the person who acts as an auxiliary of the person providing healthcare, provided that the information is necessary to the latter to act as an auxiliary, shall not be considered as other persons.


3. This category shall also exclude those persons whose consent in performing the contract for personal healthcare services is required in accordance with Articles 6.729 and 6.744 of this Code. However, where the provider of personal healthcare services, in furnishing information on the patient or giving access to such information or copies of the patient’s documents, may not be considered as complying with the degree of care which is expected from an honest provider of personal healthcare services, the provider of personal healthcare services shall not perform such actions.


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Article 6.737. Research

The laws shall regulate the conduction of research and the provision of information on the patient for the purpose of research.

 


Article 6.738. Observers 


1. The provider of personal healthcare services shall provide healthcare services without the presence of any other person to the exclusion of the patient himself, unless the patient has expressed his consent to the presence of external observers at the time of provision of healthcare services.


2. Persons whose professional assistance is required for the provision of healthcare services under the contract shall not be considered as other persons within the meaning of paragraph 1 of this Article.

 


Article 6.739. Right to terminate the contract


1. Unless there are important reasons for the termination of the contract for personal healthcare services (failure to follow the instructions of the provider of healthcare services, failure to pay for the services rendered, etc.), the provider of healthcare services may not terminate this contract.


2. The patient shall have the right to terminate the contract at any time.  

 


Article 6.740. Price of the contract

The client (the patient) shall pay to the provider of personal healthcare services the agreed price fixed by the contract, except where the provider of personal healthcare services receives remuneration for his work by law or on some other grounds, as prescribed in the contract.


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Article 6.741. Healthcare institutions

Where personal healthcare services under a contract are provided in a healthcare institution that is not a party to the contract, in all cases liability on the part of the healthcare institution shall also arise, which shall be analogous to liability of the party to the contract.

 


Article 6.742. Prohibition to limit or exclude liability

Liability of the provider of personal healthcare services and, in cases provided for in Article 6.741 of this Code, liability of the healthcare institution, may not be limited or excluded.

 


Article 6.743. Scope of application

Where personal healthcare services are provided in accordance with the general requirements set for the profession of a medical practitioner or the principles of medical ethics/deontology, i.e. not pursuant to the contract for personal healthcare services, the rules of this Section shall apply in so far as this is compatible with the nature of legal relations.


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1. If the patient has not reached the age of sixteen, the obligations of the provider of healthcare services shall be discharged to the parents of the minor or the guardian/curator of the patient.


2. The rule specified in paragraph 1 of this Article shall also apply in cases where the minor, even though he or she has attained the age of sixteen, cannot be considered to be capable of reasonably assessing his interests, to the exclusion of the cases where the patient whose capacity to make reasonable assessment is doubted has reached the age of majority, and the person has been placed under guardianship/curatorship or the guardian/curator has been appointed to him.  In the latter case, the obligations shall be discharged to the guardian/curator.  


3. Where the adult patient cannot be considered to be capable of reasonably assessing his interests, and neither curatorship nor guardianship has been established in respect of such person, all the obligations of the provider of personal healthcare services to the patient shall be discharged to the person who is authorised in writing by the patient to act on behalf of the patient. In the absence of the authorised person or where the authorised person fails to take the necessary actions, the obligations must be discharged to the patient’s spouse or cohabitee/partner, unless the latter refuse that, or in the absence of the patient’s spouse or cohabitee/partner, the obligations shall be discharged to


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latter refuse that, or in the absence of the patient’s spouse or cohabitee/partner, the obligations shall be discharged to the patient’s parent or to an adult child, or to an adult sibling, or to an adult grandchild, or to a grandparent, unless the latter refuse that. Where the adult patient cannot be considered to be capable of reasonably assessing his interests, his family members shall be requested to give a consent for discharging the obligations of the provider of personal healthcare services to the patient in the following order: the spouse, cohabitee/partner, parents/adoptive parents, adult children, adult siblings, adult grandchildren, grandparents. Upon receipt of the consent of one of the persons, in accordance with the order of priority established in this paragraph, for discharging the obligations of the provider of personal healthcare services to the patient, the consent of other persons shall not be required.


4. The provider of personal healthcare services shall fulfil his obligations to the patient’s statutory representatives as provided for in paragraphs 1 and 2 of this Article, as well as to persons listed in paragraph 3 of this Article, provided that the fulfilment of such obligations complies with the degree of care that is expected from an honest provider of personal healthcare services.


5. The person established in this Section, to whom the provider of personal healthcare services must discharge his obligations pursuant to paragraph 2 or 3 of this Article, must act


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person established in this Section, to whom the provider of personal healthcare services must discharge his obligations pursuant to paragraph 2 or 3 of this Article, must act with such care which is expected from an honest representative.  In the discharge of his obligations, the person must involve the patient as much as possible.


6. If the patient objects to the provision of healthcare services to him, to which the persons specified in paragraphs 2 and 3 of this Article had already given their consent, such services may be provided only if this is clearly necessary in order to avoid serious harm to the patient.


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Article 6.745. Emergencies

Where, pursuant to Article 6.744 of this Code, instead of the patient’s consent, the consent of the person indicated in the said Article is required for the provision of healthcare services, the services may be provided without the consent of such person provided that there is insufficient time to obtain the consent of the said person in cases where immediate action is needed to save the life of the patient.

 


Article 6.746. Use of human tissues and organs

Human tissues and organs taken from an anonymous person during the provision of personal healthcare services may be used in cases and pursuant to the procedure prescribed by laws.

 


SECTION THREE

PROVISION OF PACKAGE TRAVEL SERVICES


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SECTION THREE

PROVISION OF PACKAGE TRAVEL SERVICES

 


Article 6.747. Package travel contract


1. Under a package travel contract, one party (the tour organiser) shall undertake to organise, in return for payment, a package travel for the other party (the tourist), while the tourist shall undertake to pay the tour organiser for the services provided. A package travel shall also include a tour where it is sold by concluding separate contracts on the provision of tourism services between the tourist and the provider(s) of tourism services.


2. For the purposes of this Section, the terms ‘travel retailer’, ‘tour organiser’, ‘package travel’, ‘tourist’ and ‘provider of tourism services’ shall be interpreted as defined in the Law of the Republic of Lithuania on Tourism.


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Article 6.748. Provision of information and documentation prior to conclusion of a package travel contract    


1. When offering its services, the tour organiser must, prior to conclusion of a package travel contract, provide the tourist with clear, comprehensible, and non-misleading written information on paper or on other durable medium, including:


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1) the basic terms and conditions of the package travel and/or the main characteristics of the services provided:


a) the tour destination(s), travel route and durations of stay with dates indicated, and where accommodation is included, the number of included overnight stays;


b) the means of transport, its data and categories, points, dates and time of departure and return, waiting time, locations, and transport connections at stopovers. In cases where the exact time has not yet been set, the tour organiser or the travel retailer shall inform the tourist of an approximate time of departure and return;


c) the place and main characteristics of accommodation, and where it is established in accordance with the relevant rules of the host country, information on the tourist category or class;


d) catering or catering services;


e) visits, guided tour(s) or other services included in the final price of the package travel;


f) whether a particular travel service will be provided to the tourist as a member of a group (in cases where this is not obvious, depending on the circumstances) and, where possible, information on the approximate size of the group;


g) the language in which the services will be provided where the access of the tourist thereto depends on the information supplied orally;


h) the information on whether the package travel is essentially suitable for persons with reduced mobility and, at the request of the tourist, accurate


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the information on whether the package travel is essentially suitable for persons with reduced mobility and, at the request of the tourist, accurate information on the suitability of the package travel depending on the needs of the tourist;


2) the details or contact information (name and surname of the natural person or name, address, telephone number, and e-mail (if any) of the legal person) of the tour organiser and/or the travel retailer;


3) the total cost of the package travel, which includes taxes, any additional contributions, charges and other expenses, or, where those costs cannot be calculated on reasonable grounds before the conclusion of the contract, information on the additional costs which the tourist may still incur;


4) the procedure for paying for the package travel, including the part of the price to be paid in advance, and the payment schedule of the remaining amount;


5) the minimum number of tourists required for the package travel to take place and the time limit referred to in paragraph 2 of Article 6.751 of this Code during which the tourist may terminate the contract if the minimum number of tourists is not obtained for the package travel;


6) the passport and visa requirements, including the approximate duration of visa issuing process;


7) health-related formalities (information on the epidemiological status of communicable diseases in the country of destination, compulsory and recommended preventive measures, information on the procedure of health insurance);


8)


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status of communicable diseases in the country of destination, compulsory and recommended preventive measures, information on the procedure of health insurance);


8) the right of the tourist to terminate the package travel contract in accordance with the procedure laid down in Article 6.750 of this Code;


9) the right of the tourist to withdraw, within fourteen days, in accordance with the procedure laid down in paragraph 1 of Article 6.22810 of this Code, from the package travel contract concluded outside the commercial premises;


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10) optional or compulsory insurance to cover the costs arising from the termination of the package travel contract or assistance, including the return of the tourist to the initial point of departure, in the event of an accident, illness or death.


2. The tour organiser shall inform the tourist in a clear, comprehensible and prominent manner in a form preferred by the tourist of any change to the information referred to in paragraph 1 of this Article. The tour organiser shall provide all this information on a durable medium prior to conclusion of the package travel contract.


3. Where the tour organiser fails to provide the tourist with the information referred to in point 3 of paragraph 1 of this Article prior to conclusion of the package travel contract, the tourist shall not be obliged to pay any additional fees, charges or other costs levied by the tour organiser which have not been included in the total cost of the package travel.


4. The tour organiser shall provide the tourist with the necessary receipts, vouchers, tickets, and information on the scheduled time of departure and, where applicable, the duration of registration and scheduled waiting time at stopovers and transport connections and time of arrival in good time before the commencement of the package travel. The documents referred to in this paragraph shall be provided to the tourist in the form in which the package travel contract referred to in Article 6.749 of this Code has been drawn up.


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Article 6.749. Conclusion and content of the package travel contract


1. The package travel contract must be drawn up in a clear and comprehensible language. The contract concluded in a written form must be legible.


2. The tour organiser must include in the package travel contract the information specified in paragraph 1 of Article 6.748 of this Code, as well as clear and comprehensible information on:


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1) the special requirements of the tourist which the tour organiser has agreed to satisfy;


2) the fact that the tour organiser is responsible, in accordance with Article 6.754 of this Code, for proper provision of all services under the package travel contract and that the tour organiser must provide necessary assistance to the tourist;


3) the name and contact details of the insurance undertaking which has issued the guarantee of fulfilment of obligations or the name and contact details of the financial institution which has granted the financial guarantee, including their address, and the contact details of the institution authorised by the Government (address, telephone, e-mail);


4) the name, address, telephone, e-mail and, if any, fax number of the local representative, tour manager, contact point of the tour organiser or other service which enables the tourist to contact the tour organiser quickly, communicate with or seek assistance from the tour organiser in the event of difficulties, or to lodge a claim for improper performance of or failure to perform the package travel contract;


5) the obligation of the tourist to inform, without undue delay, the tour organiser, using contact details referred to in point 4 of this paragraph, of any case of improper performance of or failure to perform the package travel contract discovered by the tourist during the package travel;


6) the details to directly contact a minor or a person accompanying a minor in the current location of the minor


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tourist during the package travel;


6) the details to directly contact a minor or a person accompanying a minor in the current location of the minor where, in accordance with the package travel contract which includes accommodation, the minor travels unaccompanied by his parent or other accompanying person;


7) the internal procedure for settlement of claims by the tour organiser, alternative means of dispute settlement applied to a concluded package travel contract, where applicable, the entity for out-of-court consumer dispute resolution dealing with disputes over the performance of the package travel contract, and electronic means of dispute settlement;


8) the right of the tourist to transfer the package travel contract to another tourist in accordance with Article 6.753 of this Code.


3. The information referred to in paragraph 2 of this Article and paragraph 1 of Article 6.748 of this Code shall be considered an integral part of the package travel contract. The information referred to in points 1, 3, 4, 5 and 7 of paragraph 1 of Article 6.748 of this Code may not be altered, unless the parties to the package travel contract expressly agree otherwise.


4. The standard terms of the package travel contract shall be approved by an institution authorised by the Government.


5. The tour organiser, after the conclusion of the package travel contract or without undue delay thereafter, shall present to the tourist, on a durable medium, a copy of the package travel contract or an acknowledgement of the conclusion of the


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undue delay thereafter, shall present to the tourist, on a durable medium, a copy of the package travel contract or an acknowledgement of the conclusion of the contract. The tourist shall have the right to request a paper copy of the package travel contract where it has been concluded in the physical presence of the parties.


6. Where the package travel contract is concluded outside the commercial premises, a copy of the package travel contract or an acknowledgement of the conclusion of this contract shall be provided to the tourist on paper or, if the tourist agrees, on another durable medium.


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1. The tourist shall have the right to terminate the package travel contract at any time before the commencement of the package travel. 


2. Where the tourist terminates the package travel contract, the tour organiser may require the tourist to pay a reasonable fee for the termination of the package travel contract. In cases where a termination fee is laid down in the package travel contract, the amount of the fee shall depend on the time remaining before the commencement of the package travel, the estimated reduction of costs incurred by the tour organiser, and the income which the tour organiser expects to receive or would receive if the package travel was sold to another person. In cases where no termination fee is provided for in the package travel contract, the termination fee must correspond to the price of the package travel, less the amount saved due to the decrease in the costs of the tour organiser and the income resulting from the sale of the package travel to another person.


3. At the request of the tourist, the tour organiser must provide the justification for the amount of the termination fee. In any case, the amount of the termination fee may not exceed the price of the package travel established in the package travel contract.


4. The tourist shall have the right to terminate the package travel contact without paying any termination fee referred to in paragraph 2 of this Article in the following cases:


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1) where the tour organiser changes the terms of the package travel contract before the commencement of the package travel in the circumstances specified in paragraph 2 of Article 6.752 of this Code;


2) where, due to the shortcomings indicated by the tourist, the package travel contract may no longer be performed and the tour organiser fails to eliminate the shortcomings within a reasonable period set by the tourist. In the cases provided for in paragraph 3 of Article 6.7521 of this Code, the tourist may request a reduction of the price of the package travel or a compensation for damage;


3) in the event of force majeure at the place of destination of the package travel or in its immediate vicinity, which may render it impossible to operate the package travel or to transport the tourists to the place of destination of the package travel. In this case, the tourist shall be entitled to request a refund for the payments made for the package travel, but he shall not be entitled to any additional compensation for damage.


5. The tourist shall have the right, without indicating any reasons, to withdraw within fourteen days from the package travel contract concluded outside the commercial premises, giving notice to the tour organiser in accordance with the procedure laid down in paragraphs 6 and 7 of Article 6.22810 of this Code.


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Article 6.751. Right of the tour organiser to terminate the package travel contract before the commencement of the package travel


1. The tour organiser shall have the right to terminate the package travel contract before the commencement of the package travel, reimburse the tourist for any money paid for the package travel and compensate for the damage suffered by the tourist.


2. Where the number of persons who have acquired a package travel is smaller than the minimum number of tourists specified in the contract, the tour organiser shall have the right to terminate the package travel contract only if the tour organiser has provided information on the termination of the package travel contract on this ground on a durable medium no later than:


1) twenty days before the commencement of the package travel if the duration of the travel is longer than six days;


2) seven days before the commencement of the package travel if the duration of the travel is not shorter than two days and not longer than six days;


3) forty-eight hours before the commencement of the package travel if the duration of the travel is shorter than two days.


3. The damage referred to in paragraph 1 of this Article shall not be compensated where:


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1) the number of persons who have acquired a package travel is smaller than the minimum number of tourists specified in the package travel contract and the tourist has been informed in writing of the right of the tour organiser to withdraw from the contract on this ground within the time limit specified in paragraph 2 of this Article;


2) the tour organiser cannot perform the package travel contract due to force majeure and immediately informs the tourist, prior to the commencement of the package travel, of the termination of the package travel contract.


4. The tour organiser shall reimburse, not later than within fourteen days from the date of the termination of the package travel contract, all the payments made by the tourist or on his behalf for the package travel, except where, within this time limit, the tourist and the tour organiser agree, in the cases specified by the Law on Tourism, on the compensation for the unperformed package by means and under the conditions laid down in this Law.


5. No longer effective from 23 January 2021.


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Article 6.752. Changes to the terms and conditions of the package travel contract before the commencement of the package travel


1. The tour organiser shall have no right to unilaterally change the terms and conditions of the package travel contract before the commencement of the package travel, with the exception of the price in accordance with the procedure laid down in Article 6.7521 of this Code, unless all of the following circumstances exist:


1) the tour organiser is entitled to it under the package travel contract;


2) the changes to the package travel contract are not substantial;


3) the tour organiser has provided the tourist with information on the changes on a durable media in a clear and comprehensible manner in the form preferred by the tourist.


2. The tourist shall have the right, at his choice, to agree, within a reasonable period specified by the tour organiser, to the changes to the terms and conditions of the package travel contract proposed by the tour organiser or to terminate the package travel contract and not to pay the termination fee in the presence of at least one of the following circumstances/conditions:


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1) the tour organiser is forced to substantially change any of the main conditions and/or characteristics of the package travel services referred to in point 1 of paragraph 1 of Article 6.748 of this Code before the commencement of the package travel;


2) the tour organiser cannot meet the special requirements of the tourist specified in the package travel contract;


3) the tour organiser proposes to increase the price of the package travel by more than 8 per cent in accordance with Article 6.7521 of this Code.


3. Where the tourist terminates the package travel contract on the basis of the circumstances referred to in paragraph 2 of this Article, the tour organiser may offer the tourist another package travel of equivalent or higher quality.


4. Where the changes to the package travel contract referred to in paragraph 2 of this Article or the package travel contract referred to in paragraph 3 of this Article result in a lower quality or a lower price of the package travel, the tourist shall be entitled to claim a partial refund of the payments made.


5. Where the package travel contract is terminated in accordance with paragraph 2 of this Article and the tourist disagrees with the alternative package travel offered by the tour organiser, the tour organiser must reimburse all the money paid by the tourist or paid on his behalf without undue delay, but not later than within fourteen days from the date of termination of the package travel contract. Provisions concerning the limitation period for filing claims established


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delay, but not later than within fourteen days from the date of termination of the package travel contract. Provisions concerning the limitation period for filing claims established in paragraph 1 of Article 6.252, points 1 and 2 of paragraph 1 and paragraph 2 of Article 6.7541, paragraphs 1 and 2 of Article 6.755 of this Code, paragraph 1 of Article 11 of the Law on Treaties and the Law on Tourism shall apply mutatis mutandis to the parties to the package travel contract.


6. The tour organiser shall, without undue delay, provide the tourist with the information on a durable medium in a clear and comprehensible manner on:


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1) the proposed changes to the package travel contract referred to in paragraph 2 of this Article and their influence on the price of the package travel in the cases referred to in paragraph 5 of this Article;


2) the reasonable time limit within which the tourist must inform the tour organiser of his decision pursuant to paragraph 2 of this Article;


3) the consequences if the tourist fails to reply within the time limit specified in point 2 of this paragraph;


4) when offered, an alternative package travel and its price.


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Article 6.7521. Change in the price of the package travel contract


1. The tour organiser shall have the right to increase the price of a package travel after the conclusion of the package travel contract only if all of the following conditions are met:


1) the package travel contract provides that the tour organiser may increase the price of the package travel;


2) the travel package contract clearly specifies the right of the tourist to a price reduction in the event of a reduction in the costs referred to in paragraph 2 of this Article and indicates how the revised price is to be calculated;


3) the tour organiser informs the tourist, on a durable medium in a clear and comprehensible manner, about the increase of the price at least twenty days before the commencement of the package travel, indicating the reasons for the price increase and how the price increase was calculated.


2. The increase in the price of a package travel referred to in paragraph 1 of this Article shall be possible only when it is directly determined by:


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1) a change in the price of tourist transport due to the costs of fuel or other energy resources;


2) a change in the fees or charges levied by third persons not directly involved in the operation of the package travel on services which are included in the package travel contract;


3) a change in the exchange rate of the foreign currency related to the package travel.


3. The tourist shall have the right to demand a reduction in the price in the following cases:


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1) in the event of a decrease in the costs specified in paragraph 2 of this Article;


2) due to improper performance of the package travel contract, unless the tour organiser proves that the package travel contract is performed improperly through the fault of the tourist;


3) where proposed alternative services result in lower quality of the package travel than indicated in the package travel contract;


4) where the tour organiser cannot, for justified reasons, offer alternative services to the tourist or the tourist refuses them in accordance with paragraph 5 of Article 6.754 of this Code;


5) where, due to the shortcomings indicated by the tourist, the package travel contract may no longer be performed and the tour organiser fails to eliminate the shortcomings within a reasonable period set by the tourist.    


4. Having reduced the price of a package travel, the tour organiser shall have the right to deduct the actual administrative costs from the amount to be returned to the tourist, providing, at the request of the tourist, justification for such administrative costs.


5. Where the price increase referred to in paragraph 1 of this Article exceeds eight per cent of the final price of the package travel, the tourist shall have the right to terminate the package travel contract or choose an alternative package travel offered by the tour organiser in accordance with Article 6.752 of this Code.


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Article 6.753. Change of the parties to the package travel contract


1. The tourist shall have the right to transfer his right to a package travel to another person who will acquire all the rights and obligations of the tourist under the package travel contract, provided that the tourist gives a reasonable notice to the tour organiser before the commencement of the package travel. The tourist’s notice shall in all cases be considered reasonable if it is submitted at least seven days before the commencement of the package travel.


2. The tourist who transfers the right to a package travel and the other person shall bear solidary liability to the tour organiser for the payment of the price of the travel and costs related to the transfer of the right to the package travel.


3. The tour organiser shall inform the tourist who transfers his right to a package travel to another person about the actual costs of the transfer of the right to the package travel and shall provide the supporting evidence thereof. The costs must be reasonable and not exceed the actual costs incurred by the tour organiser for the transfer of the package travel contract.


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Article 6.754. Liability of the tour organiser for improper performance of the package travel contract


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1. The tour organiser must perform the package travel contract taking into account the legitimate expectations of the tourist, which, according to the nature of the package travel contract and the services provided, the tourist may have held, regardless of whether those services are to be provided by the tour organiser or by other providers of tourist services.


2. Where the services specified in the package travel contract are provided in violation of the terms of the package travel contract, the tour organiser must, within a reasonable time limit set by the tourist, eliminate the shortcomings indicated by the tourist, with the exception of the cases specified in paragraph 3 of this Article.


3. The tour organiser may refrain from eliminating the shortcomings referred to in paragraph 2 of this Article where this is not possible or it would lead to disproportionate costs taking into account the extent of the shortcomings and the value of improperly provided services referred to in the package travel contract. Where the tour organiser fails to eliminate the shortcomings for the reasons set out in this paragraph, the provisions of Article 6.7541 relating to the compensation for damage shall apply. 


4. Where the tour organiser fails to eliminate the shortcomings for the reasons other than those referred to in paragraph 3 of this Article within a reasonable time limit designated by the tourist, the tourist may do it himself and demand reimbursement of the necessary costs. Where the shortcomings are to be eliminated immediately, the tourist shall not be required to indicate the time


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do it himself and demand reimbursement of the necessary costs. Where the shortcomings are to be eliminated immediately, the tourist shall not be required to indicate the time limit.


5. Where the tour organiser is unable to provide a substantial part of services under the package travel contract, he shall offer to the tourist, without additional costs, appropriate alternative services, the quality of which, if possible, is equivalent to or higher than the quality specified in the package travel contract, in order to continue the package travel, as well as in cases where the service of return of the tourist to the point of departure is not provided as agreed. The tourist may refuse the proposed alternatives if they are not comparable to those agreed in the package travel contract or if the price reduction granted is inadequate.


6. Where a package travel covers a passenger transport service, the tour organiser must ensure, in the cases referred to in paragraph 5 of this Article, that the tourist is returned, at no additional cost, to the initial point of departure or transported to another place agreed by the tourist, and must reimburse the tourist for the services which have not been provided.


7. Where the tour organiser is unable to ensure the return of the tourist under the package travel contract due to force majeure, the tour organiser must cover the costs of the necessary accommodation, the category of which is,  where possible, equivalent to the one specified in the contract for the period of duration of the force


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the necessary accommodation, the category of which is,  where possible, equivalent to the one specified in the contract for the period of duration of the force majeure, but not exceeding three nights for each tourist, unless longer periods are provided for in other laws or legal acts of the European Union.


8. The limitation of costs referred to in paragraph 7 of this Article shall not apply to persons with reduced mobility as defined in Article 2(a) of Regulation (EC) No 1107/2006 of the European Parliament and of the Council of 5 July 2006 concerning the rights of disabled persons and persons with reduced mobility when travelling by air (OJ 2006 L 204, p. 1) and to accompanying persons, pregnant women and unaccompanied minors, as well as persons who require special medical assistance, provided that the tourist informs the tour organiser of his special needs at least forty-eight hours before the commencement of the package travel. In the cases provided for in this paragraph, the tour organiser may not limit its liability on the basis of force majeure if a respective transport service provider cannot rely on such circumstances in accordance with the legal acts of the European Union.


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Article 6.7541. Compensation for damage


1. The tourist shall have the right to claim, without undue delay, compensation for pecuniary and non-pecuniary damage in the following cases:


1) where, due to the shortcomings indicated by the tourist, the package travel contract may no longer be performed and the tour organiser fails to eliminate the shortcomings within a reasonable time limit set by the tourist;


2) where the tour organiser is unable, for justified reasons, to offer alternative services to the tourist or the tourist refuses them in accordance with paragraph 5 of Article 6.754;


3) in other cases provided for by this Code.


2. The tour organiser shall not be liable for improper performance of the package travel contract if the tour organiser proves that the package travel contract has been performed improperly:


1) through the fault of the tourist;


2) through the fault of the third party not related to the provision of services under the package travel contract and as a consequence it has not been possible to anticipate or avoid the fault.


3) due to force majeure;


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1. If damage, other than damage arising from the death or health impairment of the tourist, as well as intentional damage or damage caused by gross negligence, is done to the tourist in the course of provision of a service provided for in the package travel contract, but the service is not provided by the tour organiser itself, the liability of the tour organiser for such damage may be limited to a triple price of the package travel.


2. The right of the tourist to receive compensation for damage or a reduction of the price shall not affect the rights of passengers under Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (OL 2004 L 046, p. 1); Regulation (EC) No 1371/2007 of the European Parliament and of the Council of 23 October 2007 on rail passengers’ rights and obligations (OL 2007 L 315, p. 14); Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents (OL 2009 L 131, p. 24); Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and


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1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004 (OL 2010 L 334, p. 1); Regulation (EU) No 181/2011 of the European Parliament and of the Council of 16 February 2011 concerning the rights of passengers in bus and coach transport and amending Regulation (EC) No 2006/2004 (OL 2011 L 55, p. 1); and international conventions.


3. Compensation for damage paid by the tour organiser in accordance with Article 6.7541 of this Code or a reduction of the price granted by the tour organiser to the tourist in accordance with Article 6.7521 of this Code, or compensation paid or a price reduction granted in accordance with the legal acts of the European Union and international conventions referred to in paragraph 2 of this Article shall be deducted from each other in order to avoid double compensation.


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CHAPTER XXXVI

MANDATE

 


Article 6.756. Concept of a contract of mandate


1. Under a contract of mandate, one party (the mandatary) shall undertake to perform, in the name of and at the expense of another party (the mandator) certain legal actions in respect of third persons.


2. The powers granted to the mandatary and the written document confirming thereof shall be referred to as a power of attorney.

 


Article 6.757. Subject matter of a contract of mandate


1. Under a contract of mandate, the mandator may authorise the mandatary to perform legal actions related with the defence of the mandator, execute administration of the mandator’s property in total or a part thereof, perform procedural actions on behalf of the mandator in the court and other institutions, as well to as effectuate any other legal actions.


2. The person’s consent to assume the mandate may be expressed explicitly or, taking in regard the concrete circumstances, by silence.


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Article 6.758. Remuneration of the mandatary


1. A contract of mandate may be either by gratuitous title or by onerous title.


2. A contract of mandate entered into by natural persons shall be presumed to be by gratuitous title, except in cases where the legal action performed by the mandatary on behalf of another person constitutes professional or business activity of the mandatary. In the instances where one or both parties to a contract of mandate are entrepreneurs, the contract shall be presumed to be by onerous title.


3. In the instances where the contract is onerous, the amount of the mandatary’s remuneration shall be determined by the contract of mandate or by laws. In the event where neither the contract nor laws determine the amount of the remuneration, the payment shall be determined taking into consideration usages, market prices, the character and duration of the services rendered, recommendations of the professional association of the persons engaged in rendering relevant services, and other circumstances.


4. The mandatary acting as a commercial representative of the mandator shall have the right to withhold things subject to transfer to the mandator until the latter fully remunerates the mandatary for the services rendered.


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Article 6.759. Fulfilment of mandate in accordance with the instructions of the mandator


1. The mandatary must fulfil the mandate given to him in accordance with the instructions of the mandator.  he instructions of the mandator must be lawful, practical and definite.


2. The mandatary shall have the right to deviate from the instructions of the mandator if, in the light of the particular circumstances, this is necessary in the interests of the mandator and the mandatary has not been able to enquire of the mandator in advance, or has not received any reply to his enquiry within a reasonable period. In this event, the mandatary must inform the mandator about the deviations as soon as it becomes possible.  


3. In the instances where the mandatary operates as a commercial representative, the mandator  may, in his own interest, grant the mandatary the right to deviate from the mandate without a preliminary enquiry. In this event, the commercial representative must, within a reasonable period, inform the mandator about the deviations unless otherwise provided for by the contract.


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1. The mandatary must fulfil the mandate in good faith and with prudence and diligence in the best interests of the mandator, and avoid any conflict between his personal interests and those of the mandator.


2. The mandatary must fulfil the mandate personally, except in cases where the contract provides for exceptions, as well as where the law permits a substitution of mandatary.


3. When fulfilling the mandate, the mandatary must furnish the mandator, upon the latter’s request or, where the concrete circumstances warrant it, without any request, with all the information concerning the course of fulfilment of the mandate.


4. Having fulfilled the mandate, the mandatary must, without delay, inform the mandator accordingly, submit a report with documents of justification appended, and return the power of attorney unless otherwise provided for by the contract.


5. The mandatary must transfer to the mandator, without delay, everything received in the course of fulfilment of the mandate.  


6. Where in the instances provided for by the contract, the law or usages, the mandatary takes assistance of third persons for the fulfilment of the mandate, he shall be liable towards the mandator for the actions of those persons, and shall be bound to compensate for any damage caused to the mandator by the actions thereof.


7. In the instances where a mandate is fulfilled by several


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bound to compensate for any damage caused to the mandator by the actions thereof.


7. In the instances where a mandate is fulfilled by several mandataries, they shall be solidarily liable towards the mandator unless otherwise provided for by the contract.


8. The mandatary shall have no right to use, in his own interests, the information or property obtained in fulfilling the mandate, except in cases provided for by the law or the contract, likewise when the mandator gives his consent to such use. Where the mandatary fails to perform this duty, he must compensate the mandator for the damage incurred by him as a result, likewise return everything that is considered to be his unjust enrichment; and in the cases where he has unlawfully used a thing or money, he must pay accordingly the lease or the interest on the sums used.


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Article 6.761. Duties of the mandator


1. The mandator must cooperate with the mandatary to facilitate the fulfilment of the mandate by the latter.


2. The mandator must, without delay, accept from the mandatary everything fulfilled by him in accordance with the contract of mandate.


3. Unless otherwise provided for by the contract, the mandator must provide to the mandatary the means necessary for the fulfilment of the mandate, compensate the mandatary for any expenses which were necessary for due fulfilment of the mandate and, in case of necessity, issue advance payment needed to cover the expenses related with the fulfilment of the mandate.


4. Upon the due fulfilment of the mandate by the mandatary, the mandator must pay remuneration to the former if the contract is onerous.


5. The mandator must compensate the mandatary for any damage incurred in the course of fulfilment of the mandate where there is no fault of the mandatary in his actions, and other persons liable for the damage are not bound to compensate for it.

 


Article 6.762. Substitution

The mandatary shall have the right to appoint another person in the fulfilment of the mandate (substitution) exclusively in the cases and under the procedure established in Article 2.145 of this Code.


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Article 6.763. Termination of a contract of mandate


1. In addition to the grounds common to the extinction of obligations, a contract of mandate shall be terminated as a consequence of:


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1. In addition to the grounds common to the extinction of obligations, a contract of mandate shall be terminated as a consequence of:


1) revocation of the power of attorney by the mandator;


2) renunciation of the power of attorney by the mandatary (Article 2.146 of this Code);


3) expiry of the time limit of the power of attorney;


4) death of a party to the contract;


5) liquidation of one of the parties to the contract of mandate;


6) initiation of bankruptcy proceedings against one of the parties;


7) declaration of one of the parties to the contract to be legally incapable in a certain area, of limited legal capacity in a certain area, or missing.


2. In the instances where the mandator appoints a new mandatary for the performance of the same actions, the contract of mandate shall be considered terminated from the moment when the first mandatary is notified about the appointment of a new mandatary.


3. In the instances where the mandator due to his health or other serious reasons is unable to revoke the power of attorney on his own, any interested person or a public prosecutor shall have the right to apply to the court for the revocation of the power of attorney where it is necessary in the interest of the mandator, or the public interest.


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Article 6.764. Legal effects of the termination of a contract of mandate


1. If a contract of mandate is terminated by the mandator before the mandate is fulfilled in full, he must compensate all the expenses incurred by the mandatary in the fulfilment of the mandate and also pay remuneration commensurate to the work performed, except in cases where the contract was terminated due to serious reasons, or the mandatary continued to fulfil the mandate after he learned or should have learned about the termination of the contract.


2. The mandatary shall be liable for the damage incurred by the mandator as a result of renunciation of the contract by the mandatary submitted without serious reasons or at an inopportune time.


3. In the instances of commercial representation, the special rules provided for in Articles 2.152 to 2.168 of this Code shall apply.


4. Upon the termination of a contract of mandate, the mandatary must submit a report to the mandator and return everything he has received under the contract, also perform all the actions which are a necessary consequence of his activity in order to avoid occurrence of damages to the mandator.


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Article 6.765. Duties of the heirs of the mandatary and of the liquidator


1. In the event of death of the mandatary, his heirs must notify the mandator about the termination of the contract and take the measures necessary in order to protect the property or documents of the mandator with subsequent transference of such property and documents to the mandator.


2. The same duties as indicated in paragraph 1 of this Article shall rest upon the liquidator of a legal person in liquidation that is a mandatary.


3. The provisions established in paragraphs 1 and 2 of this Article shall also apply in respect of the guardian of the mandatary declared legally incapable in this area, in respect of the mandatary declared to be of limited legal capacity in this area and his curator, or in respect of the administrator of the mandatary against whom bankruptcy proceedings have been opened.

 


CHAPTER XXXVII

FRANCHISE


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CHAPTER XXXVII

FRANCHISE

 


Article 6.766. Concept of a franchise contract


1. Under a franchise contract, one party (the franchiser) shall undertake to grant to the other party (the franchisee), for remuneration, for a certain period or for an indefinite period, the right to use, in the franchisee’s business activities, a complex of exclusive rights which belong to the franchiser (right to the trade name, right to the trade or service mark, right to protected commercial/industrial information, etc.), while the other party shall undertake to pay for that the remuneration determined in the contract.


2. A franchise contract shall provide for the use of a complex of exclusive rights, business reputation and commercial experience of the franchiser to a determined extent (by establishing the minimum and maximum amount of use, or any other form). A franchise contract may also determine the territory of use applicable to such exclusive rights, business reputation or commercial experience, or the field of business for the use thereof (sale of goods, rendering of services, etc.).


3. Only enterprises/entrepreneurs may be parties to a franchise contract.


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Article 6.767. Form of a franchise contract


1. A franchise contract must be concluded in writing. Failure to comply with the requirement of the written form shall render a franchise contract null and void.


2. A franchise contract may be invoked against third persons only if the fact of conclusion of the franchise contract is registered, in accordance with the procedure established by laws, in the Register of Legal Entities in which the franchiser is registered. If the franchiser is registered in a foreign state, the fact of conclusion of the franchise contract must be registered in the Register of Legal Entities in which the franchisee is registered.


3. Where the subject matter of a franchise contract is an object protected in accordance with the industrial property law, the fact of conclusion of the franchise contract must also be registered in accordance with the procedure established by laws in the relevant institution effectuating registration of objects of industrial property law and the rights thereto.


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1. A franchise contract may provide for the right of the franchisee to permit other persons to use the complex of exclusive rights granted to him, or a part of this complex on the terms of sub-franchise. The terms of a sub-franchise contract must be stipulated in advance in the franchise contract or agreed upon later with the franchiser. A franchise contract may also establish a duty of the franchisee, after the contract has been concluded, to grant other persons the right to use, within a determined period, the said rights on the terms of sub-franchise.


2. A sub-franchise contract may not be concluded for a longer period than the franchise contract.


3. If a franchise contract is null and void, a contract of sub-franchise concluded on the basis thereof shall also be null and void.


4. In the event of the dissolution of a fixed-term franchise contract before its expiry, the rights and duties of the sub-franchisee under the sub-franchise contract shall pass to the franchiser if he agrees to accept the rights and duties under the sub-franchise contract, except in cases when it is otherwise provided for by the franchise contract. The same rules shall also apply in the event of the dissolution of an open-ended franchise contract.


5. Unless otherwise provided for by the franchise contract, the franchisee shall bear subsidiary liability towards


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dissolution of an open-ended franchise contract.


5. Unless otherwise provided for by the franchise contract, the franchisee shall bear subsidiary liability towards the franchiser for the actions committed by the sub-franchisees.


6. The provisions of this Chapter shall apply in respect of a contract of sub-franchise unless it arises otherwise from the peculiarities of the sub-franchise.


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Article 6.769. Remuneration under a franchise contract


1. The franchisee must pay to the franchiser the remuneration determined in the franchise contract.


2. The remuneration may be determined in the form of a fixed lump sum and/or payable in instalments, deductions being made from the receipts of the franchisee or calculated in any other way specified in the contract.

 


Article 6.770. Duties of the franchiser


1. The franchiser must:


1) transfer to the franchisee technical and commercial documentation and submit other information necessary to the franchisee in order to exercise the rights granted to him under the franchise contract, likewise train the franchisee and his employees with regard to all the issues related with the exercise of the transferred rights;


2) issue to the franchisee licences provided for by the contract and ensure their formalisation in accordance with the established procedure.


2. Unless otherwise provided for by the franchise contract, the franchiser must:


1) ensure the registration of the franchise contract;


2) render to the franchisee ongoing technical and consultative support and assistance in training of the franchisee’s employees;


3) execute control of the quality of goods produced, work performed or services rendered by the franchisee under the franchise contract.


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Article 6.771. Duties of the franchisee

Taking into account the character and peculiarities of the activity performed, as well as the terms of the franchise contract, the franchisee must:


1) use in his activities, in the manner specified in the franchise contract, the trade name, and the trade and service mark of the franchiser;


2) ensure the quality of the goods produced, work performed or services rendered under the franchise contract;


3) comply with the directions and instructions of the franchiser in respect of the use of the rights, external and internal design of the business premises of the franchisee, as well as any other terms of activity specified in the franchise contract;


4) render to buyers/clients any additional services which they could reasonably expect in acquiring/ordering goods, work or services directly from the franchiser;


5) not divulge to other persons any commercial/industrial secrets or any other confidential information received from the franchiser;


6) conclude a sub-franchise contract where this duty is provided for in the franchise contract;


7) inform the buyers/clients, by the most obvious means to them, that the franchisee is acting under the franchise contract and is using the trade name, trade and service mark of the franchiser or any other symbols of individualisation thereof.


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Article 6.772. Limitation of the rights of the parties


1. The parties to a franchise contract may provide for only such conditions for limiting competition which are not prohibited by the competition law.


2. In the event where the requirement set forth in paragraph 1 of this Article is satisfied, the franchise contract may establish the following limitations of the rights of the parties:


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1) obligation of the franchiser not to grant to other persons analogous complexes of exclusive rights for the use thereof on the territory consolidated for the franchisee, or refrain from own analogous activity in the same territory;


2) obligation of the franchisee not to compete with the franchiser in the territory specified in the contract in the business activity carried out by the franchisee with the use of the exclusive rights granted to him;


3) prohibition for the franchisee to receive, under a franchise contract, analogous exclusive rights from competitors/potential competitors of the franchiser;


4) obligation of the franchisee to agree with the franchiser upon the location of the business premises determined in the contract, as well as the external and internal design thereof.


3. The terms of a franchise contract limiting the rights of the parties thereto may be declared null and void upon the grounds and in accordance with the procedure established by the law regulating competition if these terms limit competition.


4. The terms of a franchise contract prohibited by the competition law shall be invalid, in particular such terms by virtue of which:


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1) the franchiser is entitled to determine the prices, or their lower limit, of the goods produced or work performed, or services rendered by the franchisee;


2) the franchisee is entitled to sell goods, perform work or render services exclusively to a certain category of buyers/clients or exclusively to buyers/clients residing in the territory determined in the franchise contract.


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Article 6.773. Liability of the franchiser in relation to claims brought against the franchisee


1. The franchiser shall be subsidiary liable for claims brought against the franchisee concerning the quality of the goods, work or services sold or rendered by the franchisee under the franchise contract.


2. With regard to claims brought against the franchisee as the manufacturer of the goods/products of the franchiser, the franchiser shall be solidarily liable with the franchisee.


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Article 6.774. Right of the franchisee to conclude a franchise contract for a new term


1. The franchisee who has duly performed his duties under a franchise contract shall have the right, upon the expiry of the term of the franchise contract, to conclude a new contract for a new term on the same conditions.


2. The franchiser shall have the right to refuse to conclude a franchise contract for a new term provided that he undertakes not to conclude, within three years from the date of expiry of the term of the contract, with any other persons, an analogous franchise contract which would extend over the same territory on which the terminated contract operated. If, before the expiry of the three-year time limit, the franchiser wishes to grant the same exclusive rights to other persons, he must propose conclusion of a new contract to the franchisee or compensate the damages incurred by him.  When concluding a new contract, the conditions thereof may not be more onerous for the franchisee than the conditions of the previous contract.

 


Article 6.775. Change of the conditions of a franchise contract

A franchise contract may be modified by agreement between the parties upon general grounds.  The fact of modification of the contract may be invoked against third persons only if this fact has been registered in accordance with the procedure established in paragraph 2 of Article 6.767 of this Code.


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Article 6.776. Termination of a franchise contract


1. Each party to a franchise contract concluded for an indefinite period shall have the right to repudiate the contract having notified the other party thereof six months in advance unless a more extended period has been established in the contract.


2. The dissolution (termination) of a franchise contract shall be subject to registration in accordance with the procedure established in paragraph 2 of Article 6.767 of this Code.


3. In the event where the franchiser loses the right to the trade name or a trade/service mark without a replacement thereof by a new analogous right, the franchise contract shall terminate.


4. In the event of bankruptcy proceedings being initiated against the franchiser or the franchisee, the franchise contract shall terminate.


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Article 6.777. Substitution of the parties


1. If one or more of the exclusive rights which constitute the subject matter of the franchise contract pass to another person, the franchise contract shall remain valid. The new franchisee shall become a party to the franchise contract in that part of the rights and duties which is related to the exclusive rights transferred thereto.


2. In the event of the death of the franchiser or the franchisee, their rights and duties under the franchise contract shall pass to the heir on condition that he is an entrepreneur and continues the business or starts a business within six months from the date of opening of the inheritance. Otherwise, the franchise contract shall terminate. The effectuation of the rights and performance of the duties of the deceased under the franchise contract, before the acceptance of these rights and duties by the heir, shall be executed by the property administrator appointed by the court.


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Article 6.778. Effects of change of the trade name and trade/service mark of the franchiser

In the event of a change of the trade name or trade/service mark of the franchiser which constitute the subject matter of the franchise contract, the franchise contract shall be valid in respect of the new trade name or trade/service mark unless the franchisee demands termination of the contract and compensation of damages. In the event of the continuation of the validity of the contract, the franchisee shall have the right to request commensurate reduction of the franchiser’s remuneration unless otherwise provided for by the contract.

 


Article 6.779. Effects of termination of exclusive rights


1. In the event of the expiry of an exclusive right which constitutes the subject matter of a franchise contract or where this right terminates upon any other grounds, the franchise contract shall continue to be valid, except for the terms and conditions relating to the terminated right, while the franchisee shall have the right, unless otherwise provided for in the contract, to require commensurate reduction of the remuneration due to the franchiser.


2. In the event of termination of any of the exclusive rights, the fact of concluding a franchise contract shall be subject to re-registration unless the franchisee demands termination of the contract and compensation of damages.

 


CHAPTER XXXVIII

COMMISSION


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Article 6.780. Concept of a commission contract


1. Under a commission contract, one party (the commission agent) shall undertake to conduct, upon the mandate of the other party (the committent), for remuneration, one or several transactions in his own name but at the expense of the committent.


2. The commission agent shall acquire the rights and duties in respect of the transaction concluded by the commission agent with a third person, even though the committent was also named to the third person or entered into direct relations with the third person in regard to the performance of the transaction. 


3. A commission contract may be fixed-term or open-ended.  


4. A contract of commission may be concluded with or without specifying the territory of the performance thereof, likewise with or without a duty of the committent not to grant to third persons the right to conclude a contract in his interests and at his expense, the conclusion of which has been entrusted to the commission agent.


5. A commission contract may or may not specify the things that are the subject matter of the contract.


6. The peculiarities of individual types of commission contracts may be determined by laws.


7. In the instances where parties to a commission contract are enterprises/entrepreneurs, the commission contract may only provide for such conditions to limit competition which are not prohibited by the competition law.


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Article 6.781. Remuneration for commission


1. The committent must pay remuneration to the commission agent. In the event where the commission agent acted as surety for the performance of the transaction by a third person, the committent must also pay additional remuneration to the commission agent in the amount established in the contract. If the amount of the remuneration for commission or the additional remuneration is not established in the contract, it shall be determined in accordance with the provisions of Article 6.198 of this Code.


2. In the event of failure to perform a commission contract due to reasons for which the responsibility falls upon the committent, the commission agent shall retain his right to remuneration for the commission as well as compensation for the expenses incurred.

 


Article 6.782. Performance of commission


1. The commission agent must perform the assumed commission mandate on the conditions most advantageous to the committent and in accordance with the instructions of the committent or, in the absence of such instructions, in accordance with the usual business customs and the requirements of business practice.


2. In the instances where the commission agent concluded a transaction on conditions more advantageous than those specified by the committent, the additional advantage derived from the transaction shall be enjoyed by the commission agent unless otherwise provided for by the contract.


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Article 6.783. Liability for failure to perform the transaction


1. The commission agent shall not be liable towards the committent for the failure of a third person to perform the transaction concluded with him at the expense of the committent, except in cases when the commission agent acted as surety for the performance of the transaction by the third person, or failed to display the necessary caution in the selection of the third person as a party to the transaction.


2. In the event of the failure of a third person to perform the transaction concluded with the commission agent, the latter must immediately inform the committent thereof, collect the necessary evidence, and, at the demand of the committent, assign the right of claim to him in respect of that transaction.


3. In the instances provided for in paragraph 2 of this Article, the commission  agent may assign the right of claim to the committent irrespective of any prohibition or limitation of such assignment in the transaction between the commission agent and the third person. Nevertheless, assignment of the right of claim in such cases shall not relieve the commission agent from liability against the third person for the violation of the agreement prohibiting or limiting the assignment of the right of claim.


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Article 6.784. Sub-commission


1. Unless otherwise provided for by the commission contract, the commission agent shall have the right, for the purpose of performing the commission contract, to conclude a contract of sub-commission with another person. Nevertheless, even in such instances, the commission agent shall remain liable towards the committent for the actions of the sub-commission agent. 


2. Under a contract of sub-commission, the commission agent shall acquire the rights and duties of the committent with respect to the sub-commission agent.


3. Upon the termination of a contract of sub-commission, the committent shall have no right, without the consent of the commission agent, to enter into direct relations with the sub-commission agent unless otherwise provided for by the contract.


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1. The commission agent shall have the right to deviate from the instructions of the committent in the circumstances where this is necessary for the interests of the committent, and where the commission agent could not obtain in advance the approval of the committent, or did not receive any reply within a reasonable time after his enquiry was sent. In this event, the commission agent must inform the committent about the deviations as soon as it becomes possible.


2. In the instances where the commission agent operates as an enterprise/entrepreneur, the committent may grant the commission agent the right to deviate from his instructions without prior permission. In this event, the commission agent must inform the committent about the deviations within a reasonable period unless otherwise provided for by the contract.


3. The commission agent who has sold a thing at a price lower than agreed with the committent must compensate to the latter for the difference in prices unless he proves that he had no possibility to sell the thing at the agreed price and the sale at a lower price enabled the committent to avoid even greater losses. In the instances where the commission agent was obliged to acquire the committent’s permission in advance to sell a thing at a lower price, he must also prove that he had no possibility to obtain such permission in advance.


4. If the commission agent has purchased a thing at a higher price than agreed with the


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had no possibility to obtain such permission in advance.


4. If the commission agent has purchased a thing at a higher price than agreed with the committent, the latter, not wishing to accept such purchase, must notify the commission agent thereof within a reasonable time upon receipt of the notice from the commission agent about the conclusion of a transaction with a third person. Otherwise, it shall be deemed that the committent has accepted the performance of the obligation.  If the commission agent informs that he accepts the difference in prices at his own expense, the committent shall have no right to repudiate the concluded contract.


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Article 6.786. Right of ownership of the committent


1. Things received by the commission agent from the committent or acquired at the expense of the latter shall be in the ownership of the committent from the moment of the transfer.


2. The commission agent shall have the right to retain the things in his possession which are subject to transfer to the committent or to the person indicated by the latter if the committent fails to perform his obligations in respect of the commission agent.


3. In the event where the committent is declared insolvent (bankruptcy proceedings have been initiated against him), the commission agent shall lose the right of retention and acquire the right of pledge in respect of the thing concerned, while his claims for the amount of the thing retained shall be satisfied together with the claims secured by the pledge.

 


Article 6.787. Satisfaction of claims of the commission agent from the amounts due to the committent 

The commission agent shall have the right, in accordance with the contract of commission, to deduct the amounts due to him from all the amounts received by him on the account of the committent. Nevertheless, the creditors of the committent who enjoy preference with respect to priority of satisfaction of their claims to the commission agent shall not lose the right to satisfy their claims from the amounts deducted by the commission agent.


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Article 6.788. Liability of the commission agent for the loss, shortage or damage of the committent’s thing


1. The commission agent shall be liable towards the committent for the loss, shortage or damage of the committent’s thing situated with the commission agent unless he proves that this happened not through his fault.


2. If the commission agent, in accepting a thing transferred by the committent or received by the commission agent for the committent, notices damage or shortage thereof which is evident from external inspection, likewise if damage has been caused by somebody to the committent’s thing situated with the commission agent, the commission agent must take measures to protect the rights of the committent, gather the necessary evidence and immediately notify the committent thereof.


3. The commission agent who has not insured the committent’s thing situated with the commission agent shall be liable towards the committent exclusively in the cases where the latter has obligated him to insure the property at the expense of the committent, or if the commission agent was obliged to insure the thing pursuant to the commission contract or the law.


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Article 6.789. Report of the commission agent 


1. Upon the performance of the commission, the commission agent must submit a report to the committent and transfer to him everything he has received under the commission, likewise transfer, upon the demand of the committent, all the rights acquired by the committent in respect of a third person arising from the transaction concluded by the commission agent.


2. In the instances where the committent has objections with regard to the report, he must inform the commission agent accordingly within three months from the date of receipt of the report. Otherwise, the report shall be considered to be accepted unless there is another agreement.

 


Article 6.790. Duty of the committent to accept performance of commission

The committent must:


1) accept from the commission agent everything received under the commission;


2) inspect the thing acquired for him by the commission agent and notify the latter without delay about any defects discovered in the thing;


3) relieve the commission agent from the commitments assumed by him to a third person in the performance of the commission.


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Article 6.791. Compensation for expenses incurred in the performance of the commission


1. The committent must, in addition to the commission payment and, in relevant instances, also additional payment for the suretyship assumed (del credere), compensate the commission agent for the necessary expenses incurred by him in the performance of the commission unless otherwise  agreed between the parties.


2. The commission agent shall have no right to demand compensation for the deposit of the committent’s thing situated with the commission agent unless otherwise provided for by the law or the contract.

 


Article 6.792. Termination of a commission contract


1. A commission contract shall terminate as a consequence of: 


1) refusal by the committent to perform the commission contract;


2) refusal by the commission agent to perform the commission contract in the cases provided for by the law or contract;


3) death of the commission agent, declaration thereof to be legally incapable in this area, of limited legal capacity in this area or to be missing, liquidation thereof or declared insolvent (initiation of bankruptcy proceedings).


2. In the event where bankruptcy proceedings are initiated against the commission agent, all the rights and duties with regard to a transaction concluded by him under the instructions of the committent shall pass to the committent.


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Article 6.793. Revocation of commission


1. The committent shall have the right, at any time, to withdraw from the commission contract by revoking the commission given to the commission agent. In this event, the commission agent shall have the right to demand compensation for the expenses caused by the revocation of the commission. 


2. In the instances where the commission contract was concluded for an indeterminate term, the committent must inform the commission agent about the revocation of the commission not later than thirty days in advance unless the commission contract provides for a more extended period. In such cases, the committent must remunerate the commission agent for the transactions concluded by him before the revocation of the commission and compensate the commission agent for the damages suffered.


3. Having revoked the commission, the committent must, within the period established in the contract, or immediately if such period has not been established, instruct the commission agent of how to dispose of the committent’s thing situated with him. Where the committent fails to perform this duty, the commission agent shall have the right to hand over the thing for deposit at the expense of the committent or sell it at a most advantageous price for the committent.


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Article 6.794. Refusal by the commission agent to perform commission


1. Unless otherwise provided for by the contract, the commission agent shall have no right to refuse performance of the commission assumed, except in cases where the refusal is caused by the impossibility to perform the commission or the committent has violated the commission contract.


2. In the instances where the commission agent has the right to refuse commission, he must inform the committent in writing about his refusal. The commission contract shall continue to be valid for two weeks from the date when the committent receives the notification from the commission agent about the refusal of the commission.


3. In the instances where the commission agent refuses performance of the commission assumed on the grounds that the committent has violated the commission contract, he shall be entitled to both compensation of the expenses incurred and the remuneration for the commission.


4. Having refused performance of the contract, the commission agent must take measures necessary for the protection of the committent’s thing.


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Article 6.795. Instructions in respect of property in the event of refusal by the commission agent to perform commission or upon revocation of the commission by the committent


1. The committent, having received the notification of the commission agent about the latter’s refusal to perform commission, must, within one month from the date of receipt of the notification, issue instructions concerning his property situated with the commission agent.


2. If the committent fails to issue instructions in regard of his thing situated with the commission agent within the established period, the commission agent shall have the right to hand over the thing for deposit at the expense of the committent or, with the purpose of satisfying his claims related with the committent, to sell the thing at the most advantageous price for the committent.

 


CHAPTER XXXIX

DISTRIBUTION


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CHAPTER XXXIX

DISTRIBUTION

 


Article 6.796. Concept of a distribution contract


1. Under a distribution contract, one party (the distributor) shall undertake, within a fixed period or with no term being determined, to purchase in his name and at his expense from the other party (the producer/supplier) goods/services and sell them to the final consumer or to other distributors, as well as to perform other work related to the resale of goods/services, while the producer/supplier shall undertake to sell goods/services to the distributor, as well as to perform other work related to the distribution of goods/services.


2. Only enterprises/entrepreneurs may be parties to a distribution contract. 

 


Article 6.797. Duration of a distribution contract

A distribution contract may be fixed-term or open-ended.

 


Article 6.798. Form of a distribution contract

A distribution contract must be concluded in writing. Failure to comply with this requirement shall render the contract null and void.

 


Article 6.799. Distributor

The distributor shall be an independent enterprise/entrepreneur which purchases in its/his name and at its/his expense goods from the producer or other distributor and resells them to the final consumer or other distributors.


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Article 6.800. Types of distribution contracts


1. Distribution contracts may be exclusive and selective.


2. Under an exclusive distribution contract, the producer/supplier shall undertake to sell goods indicated in the contract as intended for resale only to one distributor in a concrete territory exclusively attributed to the distributor or to a concrete group of consumers exclusively attributed to the distributor.


3. Under a selective distribution contract, the producer/supplier shall undertake to sell goods intended for resale only to certain distributors who conform to the technical, qualification or any other criteria determined by the producer/supplier.


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Article 6.801. Limitation of rights of the parties


1. The parties to a distribution contract may provide for only such conditions for limiting competition which are not prohibited by the competition law. Supervision of such conditions shall be executed by a relevant authority pursuant to the procedure established by laws. The competition law may establish additional requirements for the validity of such conditions (registration, etc.).


2. Where all the requirements established in paragraph 1 of this Article are complied with, the parties may determine the following clauses in an exclusive distribution contract:


1) preventing the distributor from producing or distributing goods that compete with the goods indicated in the contract;


2) obligating the distributor to purchase the goods indicated in the contract only from the producer/supplier;


3) preventing the distributor from searching for customers and establishing branches and representative offices in any other territory than indicated in the contract.


3. The parties shall have no right to determine in the distribution contract the price of resale of the goods, or any other exclusive conditions contradictory to the requirements of the competition law.


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Article 6.802. Rights and duties of the distributor


1. The parties may establish in the contract that the distributor who duly performs the contract shall be entitled to additional remuneration for the additional services supplied or the work performed in the interests of the producer/supplier.


2. The parties may also establish the maximum level of the distributor’s profit derived from the resale of the goods unless otherwise provided for by the competition law.


3. Unless otherwise provided for by the contract and the competition law, the distributor must:


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1) sell the goods only in the territory or to persons indicated in the contract;


2) ensure effective distribution of goods;


3) organise the advertising and advertising campaigns for the goods of the producer/supplier;


4) ensure adequate qualification of his employees and their training;


5) ensure adequate storage and warehousing of the goods and continuous replenishing of the stock, establish and maintain a network of trade warehouses;


6) sell the goods under the trademark of the producer/supplier or in the special packaging or with other labelling of the producer/supplier;


7) avoid establishing branches and representative offices in any other territory than determined in the contract;


8) purchase the goods in certain batches or a certain minimum amount within the period established in the contract;


9) sell the goods within a certain period established in the contract;


10) provide technical service to the goods after their sale or provide the buyers of those goods with any other guarantee or servicing;


11) furnish the producer/supplier with information about the market conditions, its changes and conduct market research;


12) avoid producing goods which compete with the goods established in the contract;


13) avoid revealing commercial secrets or any other confidential information of the producer/supplier;


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13) avoid revealing commercial secrets or any other confidential information of the producer/supplier;


14) upon the termination of the contract, return to the producer/supplier all the documents, materials, trade samples, etc. received from him.


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Article 6.803. Rights and duties of the producer/supplier


1. The producer/supplier shall have the right to control the warehouses and any other premises of the distributor where the goods purchased from the producer/supplier are stored or sold, as well as control the compliance with other conditions of the contract.


2. Unless otherwise provided for by the contract, the producer/supplier must:


1) sell the goods of adequate quality and guarantee their quality, sell the goods within the time periods and to the extent established in the contract;


2) sell the goods agreed upon only to the distributor and avoid selling goods directly to the consumer;


3) train the employees of the distributor;


4) supply the distributor with advertising material;


5) pay the distributor the remuneration established in the contract for additional services supplied by the distributor.


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Article 6.804. Dissolution of a distribution contract


1. Each party to an open-ended contract shall have the right, at any time, to terminate it having notified in writing the other party thereof not later than three months in advance before the intended dissolution of the contract, unless a more extended period for notice is established in the contract.


2. Upon the dissolution of a fixed-term contract before its expiry, the distributor shall have the right to demand compensation for the income loss for the remaining period of the validity of the contract where the contract is dissolved due to the fault of the producer/supplier. Where the contract is dissolved due to the fault of the producer/supplier, the distributor shall also have the right to demand remuneration for additional services, unless otherwise provided for by the contract.


3. Where the contract is dissolved due to the fault of the distributor, the producer/supplier shall have the right to claim compensation for damage, unless otherwise provided for by the contract.

 


Article 6.805. Renewal of a contract

In the instances where after the expiry of a fixed-term distribution contract the parties continue the performance thereof, the contract shall be deemed renewed under the same conditions for the same period of operation.


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Article 6.806. Liability of the parties to a distribution contract towards third persons


1. For the damage caused to third persons, the distributor and producer/supplier shall be liable on general grounds.


2. For the damage caused to the consumer by goods or services of inadequate quality, liability of the distributor and producer/supplier shall arise in accordance with the rules established in Articles 6.292 to 6.300 of this Code.


3. The clauses of the distribution contract by which the producer/supplier is relieved from liability for damage caused to consumers by goods produced/services supplied shall be null and void.

 


CHAPTER XL

CARRIAGE

 


Article 6.807. General provisions of carriage


1. The carriage of goods, passengers and luggage shall be subject to the contract of carriage.


2. Carriage conditions shall be laid down by this Code, codes of individual modes of transport, other laws, international treaties to which the Republic of Lithuania is a party, as well as other transport legislation.


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Article 6.808. Contract for the carriage of goods


1. Under the contract for the carriage of goods, the carrier shall undertake to carry the goods handed over to him by the consignor to the point of destination and to deliver them to the person entitled to receive such goods (the consignee), while the consignor/consignee shall undertake to pay a specified charge for the carriage of the goods.


2. The conclusion of the contract of carriage shall be confirmed by a bill of lading or another document. 

 


Article 6.809. Contract for the carriage of passengers


1. Under the contract for the carriage of passengers, the carrier shall undertake to carry passengers to the point of destination and, where the passengers hand over their luggage to him, to carry the luggage to the point of destination and deliver it to the person entitled to receive such luggage, while the passengers shall undertake to pay a specified charge for the carriage and, where appropriate, for the carriage of their luggage.


2. The conclusion of the contract for the carriage of passengers shall be confirmed by a ticket; the handing over of luggage shall be confirmed by a luggage ticket or any other document provided for by transport legislation.


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Article 6.810. Charter-party


1. Under a charter-party (charter), one party (the owner) shall undertake to provide to the other party (the charterer), in return for consideration, a means of transport or some part thereof for the carriage of goods, passengers or luggage.


2. The procedure and conditions for the conclusion of a charter-party shall be laid down by codes of individual modes of transport and other laws.

 


Article 6.811. Direct combined transport


1. Relationships between transport undertakings in relation to the carriage of goods, passengers or luggage by different modes of transport under a single document of carriage (direct combined transport) as well as organisation of such transport operations shall be regulated by agreements concluded between appropriate transport organisations.


2. Where one carrier entrusts another carrier with the performance of all or part of his obligations, the latter shall also be deemed to be the party to the contract of carriage.  The consignor/consignee shall be deemed to have discharged his obligations by payment to one of the carriers.


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Article 6.812. Public transport services


1. A legal person (entrepreneur) engaged in the provision of transport services shall be deemed to be providing public transport services if, subject to a law or an authorisation (a licence), he is obliged to provide regular scheduled freight or passenger services at the request of any person.


2. The contract for the provision of public transport services shall be a public contract.


3. Public transport undertakings must provide transport services to any individual, with the exception of cases provided for by law when they are entitled to refuse to enter into contracts of carriage.


4. Passengers, as well as consignors and consignees of goods must conform with the rules governing the activities of public transport undertakings.


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Article 6.813. Carriage charges


1. The carriage of goods, passengers and luggage shall be subject to a charge to be determined by mutual agreement of the parties, unless otherwise provided for by the law.


2. The charge for the carriage of goods, passengers and luggage by public transport shall be established on the basis of tariffs adopted in accordance with the procedure laid down by laws.


3. Any operations or services provided for by the carrier at the request of the consignor of goods shall be remunerated by mutual agreement of the parties, unless such operations and services are subject to established tariffs.


4. The carrier shall be entitled to retain goods and luggage entrusted to him until carriage charges and other amounts due to him have been paid, unless otherwise provided for by law or the contract of carriage.


5. If, in cases provided for by law, charges for the carriage of certain categories of passengers, goods or luggage are subject to preferential arrangements, the carriers shall be compensated for the costs incurred by them to this effect in accordance with the procedure established by laws.


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Article 6.814. Provision of means of transport


1. Means of transport to be provided by the carrier to the consignor must be in a proper condition and provided within the time limits stipulated in the consignor’s order, the contract of carriage or the contract for the organisation of carriage.


2. The consignor shall be entitled to refuse the means of transport provided to him if they are not suitable for the carriage of certain goods.

 


Article 6.815. Loading/unloading of goods 


1. Loading/unloading operations shall be undertaken by the carrier or the consignor/consignee subject to the procedure provided for by the contract of carriage and in accordance with the rules established in the codes of appropriate modes of transport or other legal acts.


2. Where the consignor/consignee is in charge of loading/unloading operations by his own efforts and means, he must do this within the time limit prescribed by the contract of carriage, law or other legal acts.

 


Article 6.816. Time limits for the delivery of goods, passengers and luggage 

The carrier must deliver goods, passengers or luggage to the point of destination within the time limits prescribed by the contract, law or other legal acts or, where such time limits are not prescribed, within a reasonable period.


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Article 6.817. Liability for the breach of the contract of carriage


1. The parties shall be liable for the failure to perform or improper performance of the contract of carriage on the grounds and in accordance with the procedure laid down in the contract of carriage, this Code, as well as the codes of individual modes of transport and other laws.


2. The terms and conditions of the contract of carriage that exclude or limit the carrier’s civil liability shall be null and void, save for the exceptions laid down by the law.   

 


Article 6.818. Liability for the failure to provide or to use the means of transport


1. The carrier shall be liable for the failure to provide the means of transport and the consignor shall be liable for the failure to supply the goods or the failure to use the means of transport provided to him on the grounds and in accordance with the procedure laid down by the contract of carriage or laws.


2. The carrier and the consignor shall be exempt from liability for the failure to provide the means of transport or the failure to use them if this is due to:


1) force majeure;


2) termination or restriction of the carriage of goods on certain routes subject to procedures laid down by transport legislation;


3) other cases provided for by the codes of individual modes of transport or other laws.


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Article 6.819. Carrier’s liability for delay of the means of transport


1. Where a means of transport used for the carriage of passengers fails to commence its journey at the specified time or where it fails to reach the point of destination at the specified time (with the exception of means of transport engaged in urban and suburban services), the carrier shall pay to the passenger a penalty laid down by transport legislation, unless the carrier proves that this was due to force majeure, elimination of a breakdown of the means of transport which posed a risk to the health or life of passengers, or due to other circumstances beyond the carrier’s control.


2. Where due to delay of the means of transport the passenger withdraws from the contract of carriage, the carrier must reimburse the passenger for the carriage charge that the latter has paid.


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Article 6.820. Carrier’s liability for the failure to preserve the goods or luggage


1. The carrier shall be liable for the failure to preserve (loss, shortage, damage of) the goods or luggage from the time he accepts the goods or luggage until the delivery thereof to the consignee or any other authorised person, unless the carrier proves that the full or partial loss or damage of the goods or luggage was due to circumstances that the carrier could not have avoided and the elimination of which was beyond the carrier’s control.


2. The extent of the carrier’s liability for the damage caused due to the loss, shortage or damage of the goods or luggage shall be laid down by the contract of carriage or the law.


3. In addition, where the carrier fails to preserve the goods or luggage and where the carriage charges are not included into the value of the goods or luggage, the carrier must reimburse the consignor/consignee for the carriage charges paid by the latter for the carriage of goods or luggage.


4. Documents drafted unilaterally by the carrier with regard to the reasons for the failure to preserve the goods or luggage or the damage thereof may be litigated in the court of law and must be assessed by the court together with other evidence in the case validating the grounds for the carrier’s liability.


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Article 6.821. Presentation of claims to the carrier 

The codes of individual modes of transport or other laws may lay down obligatory presentation of claims to the carrier before addressing the court of law.

 


Article 6.822. Contracts for the organisation of carriage


1. Where goods are carried continuously and there is a need for setting time limits and procedures for the provision of means of transport and goods, the carrier and the consignor shall enter into a long-term contract for the organisation of carriage.


2. Under the contract for the organisation of carriage, the carrier shall undertake to accept at the time specified in the contract and the consignor shall undertake to supply for carriage the goods in the amount specified in the contract. The contract for the organisation of carriage shall lay down the scope of means of transport and the goods, time limits, payment procedures and other conditions.

 


Article 6.823. Carrier’s liability for the death or injury of the passenger

The carrier’s liability for the death or injury of the passenger shall be determined pursuant to the rules set out in Section Three (Articles 6.263 to 6.291) of Chapter XXII of this Code, unless the law or the contract of carriage provide for a broader extent of the carrier’s civil liability.


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1. Freight forwarding shall mean the organisation of the carriage of goods and operations related thereto provided for in the contract of freight forwarding.


2. The freight forwarder shall mean a legal person (entrepreneur) who has concluded a contract of freight forwarding with the customer whereby he has undertaken to transport, at the expense of the customer/customer’s client and on the customer’s or his own behalf, the customer’s goods as well as to perform any other operations related thereto.


3. Under a contract of freight forwarding, one party (the freight forwarder) shall undertake, for remuneration and at the expense of the other party, i.e. the customer/customer’s client, to provide or organise services provided for in the contract and related to the carriage of goods.


4. A contract of freight forwarding shall be deemed concluded from the moment when the freight forwarder acknowledges the receipt of an order. 


5. The contract of freight forwarding may provide for the freight forwarder’s duty to organise the carriage of goods by the means of transport and the route of the freight forwarder’s or the client’s choice, the freight forwarder’s duty to conclude contracts of carriage or any other contracts on his own or the client’s behalf, to ensure the dispatch, loading or unloading of goods, as well as for any other duties related


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his own or the client’s behalf, to ensure the dispatch, loading or unloading of goods, as well as for any other duties related to the carriage of goods.


6. The contract of freight forwarding may provide for such additional services to be provided by the freight forwarder as obtaining from appropriate bodies documents necessary for the export or import of goods, carrying out customs or other formalities, inspecting the quantity and condition of goods, loading or unloading of goods, paying fees, charges and other amounts to be paid by the customer/the customer’s client, keeping and storing of goods, as well as providing other services.


7. The rules of this Chapter shall also apply in cases where, under the contract, the freight forwarder’s duties are performed by the carrier.


8. The contract of freight forwarding may be either fixed-term or open-ended.


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Article 6.825. Form of a contract of freight forwarding


1. The contract of freight forwarding shall be concluded in writing or by way of placing an order by any appropriate means of communication.


2. A bill of lading may also constitute a contract of freight forwarding when completed by the freight forwarder and signed by the customer/customer’s client.


3. The client must issue an authorisation to the freight forwarder if this is necessary for the performance of the freight forwarder’s duties.

 


Article 6.826. Freight forwarder’s liability


1. The freight forwarder shall be liable for the failure to perform or improper performance of the contract of freight forwarding in accordance with the procedure laid down in the contract.


2. Where the freight forwarder proves that the breach of the contract of freight forwarding was due to the failure to perform or improper performance of the contract of carriage, the freight forwarder’s liability towards the customer/customer’s client shall be established pursuant to the same rules as are applied to the appropriate carrier’s liability towards the freight forwarder.


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Article 6.827. Documents and information to be furnished to the freight forwarder


1. The customer/the customer’s client must furnish the freight forwarder with documents and other information on the properties of goods, carriage conditions as well as any other details necessary to enable the freight forwarder to duly fulfil his obligations.


2. The freight forwarder must notify the customer/customer’s client of any omissions in the information furnished to him and, in the case where not all information has been received, he must demand that the client furnish all the necessary information.


3. Where the customer/customer’s client fails to furnish the necessary information, the freight forwarder shall have the right to suspend the performance of the contract until such time as the information is supplied. 


4. The customer/customer’s client shall be liable for the damages incurred by the freight forwarder as a result of the failure on the part of the customer/customer’s client to comply with the duties laid down in this Article.


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Article 6.828. Invoking a third party for the performance of an obligation 


1. The freight forwarder shall have the right to invoke third parties for the performance of his obligations, unless the contract provides for the freight forwarder’s obligation to perform the contract personally.


2. Full or partial transfer of the obligation to perform the contract to third parties shall not release the freight forwarder from his obligation towards the customer/customer’s client with respect to the performance of the contract.


3. Where third parties are invoked by the freight forwarder, in full or in part, for the performance of the contract, the freight forwarder shall acquire the rights of the customer/customer’s client with respect to such third parties.

 


Article 6.829. Unilateral termination of the contract


1. Each party shall have the right to unilaterally terminate an open-ended contract of freight forwarding by one month’s notice to the other party, unless a more extended period of notice is provided for in the contract.


2. The party which unilaterally terminates the contract must reimburse the other party for the resulting damage.

 


CHAPTER XLII

DEPOSIT

 


SECTION ONE

GENERAL PROVISIONS


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CHAPTER XLII

DEPOSIT

 


SECTION ONE

GENERAL PROVISIONS

 


Article 6.830. Concept of a contract of deposit


1. Under a contract of deposit, one party (the depositary) shall undertake to keep in his possession a movable thing delivered to him by the other party (the depositor) and to restore it safely preserved to the depositor, whereas the depositor shall undertake to pay remuneration, if this is established by the contract.


2. By agreement between the parties, a contract of deposit may be onerous or gratuitous.


3. Where the depositary is a legal person (entrepreneur) for whom safekeeping constitutes one of the activities he engages in (professional depositary), the contract of deposit or the documents of incorporation of the legal person may provide for the depositary’s obligation to accept into possession from the depositor a thing within the period specified in the contract.


4. A contract of deposit shall be deemed concluded from the moment of delivery of the thing to the depositary.


5. The rules laid down in this Section shall apply to special types of deposit to the extent it is not established otherwise by the provisions of other sections of this Chapter.


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Article 6.831. Form of a contract of deposit


1. The custody contract concluded by natural persons must be in writing if the value of the thing/things exceeds one thousand five hundred euros.

 


2. If the contract of deposit provides for the depositary’s obligation to accept the thing into possession for safekeeping in future, the contract must be in writing in all cases.


3. A contract of deposit shall be recognised as having been concluded in writing if the delivery of a thing to the depositary is certified by:


1) a receipt or any other document issued by the depositary;


2) a token (number) or any other sign.


4. Failure to abide by the ordinary written form shall not deprive the parties of the right to rely on the evidence presented by witnesses in case of a dispute regarding the identity of the thing that has been delivered for safekeeping and restored.


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Article 6.832. Obligations and rights of the depositary


1. The depositary must use all available means to ensure the preservation of the thing put in his possession.


2. Unless the contract establishes otherwise, the depositary shall have no right, without the depositor’s permission, to make use of the thing deposited with him or to permit the use thereof by other persons.


3. The depositary shall not have the right to require the depositor or the person to whom the thing is to be restored to prove that they are the owners of, or otherwise entitled to, the thing delivered for safekeeping.


4. The depositary must restore the thing to the depositor on demand, even before the expiry of the period of deposit.


5. The depositary shall have the right to request that the person to whom the thing is returned produce a receipt or any other document evidencing conclusion of the contract of deposit and the person’s right to withdraw the thing.


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Article 6.833. Performance of the obligation to deliver a thing for safekeeping


1. Having undertaken to accept a thing for safekeeping, the depositary shall have no right to require the delivery of the thing to him for safekeeping.  However, the depositor, who fails to deliver the thing for safekeeping within the time period set in the contract, must indemnify the depositary for any loss incurred by the depositary due to the failure to deliver the thing, unless otherwise established in the contract. The depositor shall be released from the liability if he notifies the depositary of his refusal to deliver the thing within a reasonable time.


2. Unless otherwise established in the contract, the depositary shall have the right to refuse to accept the thing for safekeeping if it has not been delivered to him within the time period set in the contract.


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Article 6.834. Period of deposit


1. The depositary must preserve the thing for the period of deposit set in the contract.


2. Where the period of deposit is not set in the contract and cannot be set under the conditions of the contract, the depositary must preserve the thing until the restoration thereof is demanded by the depositor or any other person entitled to withdraw the thing.


3. Where it is stipulated that the period of deposit expires from the moment the restoration of the thing is demanded, the depositary shall be entitled, upon the expiration of the time period of deposit customary under the conditions, to demand that the depositor withdraw the thing within a reasonable time from the receipt of such a notice. In case of failure by the depositor to withdraw the thing, the rules set in Article 6.843 of this Code shall apply.

 


Article 6.835. Mixing of things

In the cases specified in the contract of deposit, things delivered for safekeeping may be mixed with other things of the same type and quality delivered for deposit by other persons.   In such cases, the depositor shall be restored the quantity of the things of the same type and quality which is provided for in the contract.


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Article 6.836. Conditions of safekeeping of a thing


1. The depositary must preserve the thing in accordance with the conditions of safekeeping set in the contract.  Where the conditions of safekeeping are not set in the contract or not all conditions are set, the depositary must preserve the thing under such conditions which would ensure maximum protection of the thing.


2. In all cases, the depositary must ensure that he complies with the requirements for implementation of safety measures (fire-prevention, sanitary, etc.), laid down in laws and other legal acts.


3. In case of gratuitous deposit, the depositary must take as much care of the thing as he would take of his own things.


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Article 6.837. Change of the conditions of safekeeping


1. If a change of the conditions of safekeeping is necessary, the depositary must forthwith notify the depositor thereof and receive his instructions. Where an immediate change of the conditions of safekeeping is necessary in order to avoid the perishing or damage of the thing, the depositary shall have the right to change the manner, place and other conditions of safekeeping without the depositor’s instructions.


2. If a thing is in danger of perishing or if a thing is delivered for safekeeping in a damaged condition, also if there are other circumstances which preclude guaranteeing safety of the thing, whereas the depositor may not be expected to take urgent measures, the depositary shall be entitled to sell the thing or a part thereof at the market price of the locality of deposit. If the specified circumstances occur for reasons for which the depositary is not liable, he shall have the right to claim reimbursement of the costs relating to the sale of the thing.


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1. Flammable, explosive or other hazardous things may be at any time rendered harmless or destroyed by the depositary. The depositor shall not be indemnified for the losses incurred by reason thereof, if the depositor did not notify the depositary of the hazardous qualities of the things when delivering the hazardous things for safekeeping. In such cases, the depositor shall be liable for the losses caused to the depositary and third persons due to the safekeeping of such things.


2. Where hazardous things are delivered for safekeeping to a professional depositary, the rules of paragraph 1 of this Article shall apply only in the cases where the things were delivered for safekeeping under an incorrect name and at the moment of acceptance thereof the depositary could not determine the hazardous qualities of the things from their external examination.


3. Where deposit is for remuneration, the payment made to the depositary in the cases provided for in paragraphs 1 and 2 of this Article shall not be refunded, and where no payment was made, the depositary shall be entitled to recover the full amount thereof from the depositor.


4. If the depositary accepts the hazardous things specified in paragraph 1 of this Article for safekeeping knowing of the hazardous qualities thereof, the depositary shall be entitled to render the things harmless or destroy them without indemnifying the depositor for the losses if danger arises to the life or property of the depositary or third persons and the depositor fails


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them without indemnifying the depositor for the losses if danger arises to the life or property of the depositary or third persons and the depositor fails to meet the depositary’s demand for immediate withdrawal of the things. In such cases, the depositor shall not be liable to the depositary and third persons for the losses incurred by them due to the safekeeping of such things.


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Article 6.839. Transfer of things for safekeeping to a third person


1. Unless the contract of deposit establishes otherwise, the depositary shall have no right to transfer the things for safekeeping to a third person without the depositor’s consent, except in cases where the interests of the depositor have to be safeguarded due to the circumstances that have arisen and the depositary has no possibilities to obtain the depositor’s consent.


2. Having transferred the things for safekeeping to a third person, the depositary must forthwith notify the depositor thereof.


3. Transfer of the things to a third person for safekeeping shall preserve the validity of the contract of deposit between the depositor and depositary. The depositary shall be liable to the depositor for the actions of the third person.


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1. Where the contract of deposit is onerous, the depositor must pay the depositary a remuneration upon the termination of safekeeping. The parties may agree that payment of the remuneration will be made in instalments upon the expiration of the time period set in the contract.


2. Where payment of the remuneration in instalments has been agreed upon, the depositor’s failure to effect payment for more than one period shall entitle the depositary to terminate the contract and demand from the depositor immediate withdrawal of the thing.


3. If the contract of deposit expires before the date set in the contract due to the circumstances for which the depositary is not responsible, he shall be entitled to the portion of remuneration corresponding to the duration of safekeeping and, in cases provided for in paragraph 1 of  Article 6.838 of this Code, to the full amount of the remuneration. Where the contract of deposit expires due to the circumstances for which the depositary is responsible, he shall have no right to demand payment of remuneration and must refund the depositor the amounts paid.


4. In case of failure by the depositor to withdraw the thing upon the expiration of the period of deposit, he must pay an appropriate remuneration for further safekeeping of the thing. The above rule shall also apply where the depositor must withdraw the thing prior to the expiry of the period of the


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safekeeping of the thing. The above rule shall also apply where the depositor must withdraw the thing prior to the expiry of the period of the contract of deposit.


5. The depositary shall have the right to retain the thing delivered to him for safekeeping until he is paid the full amount of the remuneration by the depositor.


6. The rules of this Article shall apply unless the contract of deposit establishes otherwise.


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Article 6.841. Reimbursement of expenses related to safekeeping


1. Unless the contract of deposit establishes otherwise, the depositary’s expenses related to the safekeeping of the thing shall be entered in the remuneration for deposit.


2. If the contract of deposit is gratuitous, the depositor must reimburse the depositary for the necessary expenses related to safekeeping, unless otherwise established by the law or the contract.


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Article 6.842. Extraordinary expenses of deposit


1. The depositary shall be reimbursed for the expenses of deposit which are in excess of the regular expenses of such type of deposit and which could not have been foreseen by the parties at the moment of conclusion of the contract of deposit (extraordinary expenses), provided that the depositor gave his consent to incurring such expenses or subsequently approved such expenses, as well as in other cases provided for in the contract of deposit.


2. Where it is necessary to incur extraordinary expenses, the depositary must notify the depositor thereof and obtain his consent.  In case of failure by the depositor to give his response to the depositary within a reasonable time, consent to incur extraordinary expenses shall be deemed to have been granted.


3. If the depositary incurs extraordinary expenses without the depositor’s consent where such consent could have been obtained and the depositor has not approved the expenses, the depositary shall have the right to demand reimbursement for the extraordinary expenses only taking into account the amount of the damage that could have been caused to the thing preserved if the extraordinary expenses had not been incurred.


4. Unless otherwise established in the contract of deposit, reimbursement for the extraordinary expenses shall be paid separately from the remuneration for deposit.


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Article 6.843. Depositor’s obligation to withdraw the thing


1. Upon the expiry of the period of the contract of deposit as well as of the period fixed by the depositary for withdrawing the thing, the depositor must forthwith withdraw the thing delivered for safekeeping.


2. In case of failure by the depositor to withdraw the thing, the depositary shall have the right, upon giving the depositor a written notice to that effect, at his own discretion sell the thing in his custody for the market price of the locality of safekeeping. If the value of the thing in custody exceeds six hundred euros, the depositary shall have the right to sell it only by auction. 


3. The proceeds from sale of the thing shall be transferred to the depositor upon deducting therefrom the amounts due to the depositary.


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Article 6.844. Depositary’s obligation to restore the thing


1. The depositary must restore to the depositor or any other person authorised by him the identical thing that was delivered to the depositary for safekeeping, save for the exceptions provided for in Article 6.835 of this Code.


2. The thing must be restored in the same condition in which it was handed over for safekeeping, having regard to its normal wear and tear, amortisation or change due to its natural qualities.


3. Unless otherwise established by the contract of deposit, the depositary must restore to the depositor, together with the thing, the fruits and revenues received therefrom in the course of its safekeeping.


4. The thing must be restored at the place where it was handed over for safekeeping, unless the contract establishes otherwise. Where the contract of deposit is gratuitous, the cost of restoration of the thing shall be borne by the depositor. Where the contract of deposit is onerous, the cost of restoration of the thing shall be borne by the depositary.


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Article 6.845. Grounds for the depositary’s liability


1. The depositary shall be liable for the loss, shortage or damage of the things delivered to him.


2. Where the contract of deposit is onerous, the depositary shall be in all cases liable for the loss, shortage or damage of the things delivered to him, unless it was caused by force majeure. Where the contract of deposit is gratuitous, the depositary shall be liable only if he is at fault.


3. A professional depositary shall be liable in all cases, except where the thing was lost or damaged due to or by force majeure.


4. The depositary shall be liable for the loss, shortage or damage of the thing after the arising of the depositor’s obligation to withdraw the thing only where there has been the depositary’s malice or gross negligence. 


5. Where the depositary’s heir or other legal representative sells the thing delivered for safekeeping without knowing or ought to have known that the thing is not in the depositary’s ownership, the heir or other legal representative must return only the price he has received or assign to the depositor his claim against the buyer in good faith if the price has not been paid.


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Article 6.846. Amount of the depositary’s liability


1. The depositary must compensate the depositor for any damage connected with the loss, shortage or damage of the thing.


2. Where the contract of deposit is gratuitous, the depositary shall be liable for:


1) the loss or shortage of the thing in the amount of the value of the thing or of the missing part thereof;


2) the damage of the thing in the amount of the reduction of the value of the thing.


3. Where, due to the damage of the thing for which the depositary is liable, the value thereof has been reduced to the extent that it may no longer be used for its previous purpose, the depositor shall have the right to refuse withdrawing the thing and to demand that the depositary compensate for the value of the thing and for all losses, unless otherwise established by the contract.

 


Article 6.847. Compensation for damage inflicted on the depositary

The depositor must compensate for the damage inflicted on the depositary due to the qualities of the thing kept in custody if the depositary was not aware and could not have been aware of those qualities when accepting the thing for safekeeping, whereas the depositor was aware or ought to have been aware thereof.


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Article 6.848. Termination of the contract of deposit on the depositor’s demand

The depositor shall have the right to demand, at any time, restoration of the thing, whereas the depositary must restore it even before the expiry of the period of the contract of deposit.

 


Article 6.849. Necessary deposit


1. Necessary deposit shall take place where a person is compelled, by an unforeseen and unavoidable urgent necessity (accident, natural disaster, etc.) to entrust the custody of his property to another person.


2. In case of a necessary deposit, the depositary may not refuse to accept the thing for safekeeping without a serious reason. 


3. In case of a necessary deposit, the depositary shall be liable in the same manner as a depositary under the contract of gratuitous deposit.


4. The delivery of a patient’s things to a health or guardianship/curatorship institution shall be presumed to be a necessary deposit.

 


Article 6.850. Deposit under law

The rules of this Section shall also apply with respect to deposit obligations which arise under law, unless the law establishes otherwise.

 


SECTION TWO

WAREHOUSING


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SECTION TWO

WAREHOUSING

 


Article 6.851. Concept of a warehouse contract


1. Under a warehouse contract, the warehouse (the warehouse-keeper) shall undertake to safeguard for consideration the goods deposited with it/him by the owner/depositor of the goods and to restore them to the specified person after safekeeping.


2. For the purposes of this Section, the warehouse shall be considered to be a legal person (entrepreneur) whose principal type of activity is safekeeping of goods and provision of other services connected with the safekeeping of goods.


3. The warehouse contract shall be executed by issuing a warehouse certificate.

 


Article 6.852. Warehouse of common use


1. Only a warehouse which is bound, under law or documents relating to its activities, to accept goods for safekeeping from any owner of the goods shall be recognised as a warehouse of common use.


2. The contract of safekeeping of goods deposited with a public warehouse of common use shall be recognised as a public contract.


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Article 6.853. Inspection of goods


1. Unless otherwise provided for in the warehouse contract, the warehouse must inspect, at its own expense, the goods when accepting them for safekeeping and determine the amount of the goods (number, volume, weight, etc.) as well as assess the outward appearance thereof.


2. During the safekeeping of good, the warehouse must provide the owner of the goods with an opportunity to examine the goods in storage, take samples thereof and apply other measures necessary for ensuring the safety of the goods.

 


Article 6.854. Changing the conditions of safekeeping of goods


1. If the conditions of safekeeping of goods set in the warehouse contract require changing in order to ensure safety of the goods, the warehouse shall be entitled to apply the necessary measures at its discretion. Where this necessitates material changes in the conditions of safekeeping laid down in the warehouse contract, the warehouse must notify the owner of the goods accordingly.


2. If changes which are not provided for in the warehouse contract are detected in the stored goods during their safekeeping, the warehouse must promptly draw up an appropriate record, notifying the owner of the goods thereof on the same day.


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Article 6.855. Inspection of the released goods


1. The person to whom the goods are released and the warehouse shall have the right to demand to examine the goods being released and to inspect their quantity. Expenses related to the inspection shall be defrayed by the party demanding to examine or inspect the goods.


2. Where the released goods have not been examined and inspected in the presence of both parties, a written statement regarding the shortage or damage of the goods must be submitted at the time of release of the goods or within three days from the release thereof, provided the shortage or damage could not have been detected by normal examination of the goods.   In such case, the burden of proof of the shortage or damage of the goods shall fall on the person to whom the goods are released.


3. In the absence of the statement provided for in paragraph 2 of this Article, the warehouse shall be deemed to have released the goods in accordance with the conditions of the warehouse contract, until it is proved to the contrary.


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Article 6.856. Warehousing documents


1. Having received the goods for safekeeping, the warehouse shall issue one of the following documents confirming the warehouse contract:


1) a double warehouse certificate;


2) an ordinary warehouse certificate;


3) a warehouse receipt.


2. A double warehouse certificate shall consist of two parts, i.e. a warehouse certificate and a pledge certificate (Article 6.857 of this Code), which shall be separable.


3. A double warehouse certificate, each one of its two parts, and an ordinary warehouse certificate shall be securities. 


4. Goods received for safekeeping with a double warehouse certificate, if the parts thereof have been separated, or with an ordinary warehouse certificate may be an object of pledge during the period of safekeeping by way of pledging the corresponding certificate.


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Article 6.857. Double warehouse certificate and its content


1. The following must be indicated in each part of the double warehouse certificate:


1) the name and place of the warehouse;


2) the number of the warehouse certificate;


3) the name and registered office of the owner/depositor of the goods;


4) the name and quantity of the goods (units, weight, volume, etc.) and, in case the goods have been an object of pledge, the amount of the pledge;


5) the time period of safekeeping of the goods or instruction for their safekeeping until the demand for their release;


6) the amount of remuneration for the deposit or the tariffs on the basis of which it is to be calculated and the procedure of payment for deposit;


7) the date of issue of the warehouse certificate.


2. A document shall not be deemed to be a double warehouse certificate if at least one of the requisite items listed in paragraph 1 of this Article is missing.


3. A double warehouse certificate shall be a document of title granting the right to dispose of the goods.


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Article 6.858. Rights of the holder of warehouse and pledge certificates


1. The holder of a warehouse and pledge certificate shall be entitled to dispose of the goods in storage in the warehouse.


2. The holder of a warehouse certificate which has been separated from the pledge certificate shall be entitled to dispose of the goods, however he shall have no right to reclaim the goods from the warehouse until the repayment of the credit granted against the pledge certificate.


3. The holder of a pledge certificate shall have the right of pledge on the goods in an amount equal to the sum of the credit granted against the pledge certificate and the interest thereon. When the goods are being pledged, a notice to that effect shall be made in the warehouse certificate.

 


Article 6.859. Transfer of warehouse and pledge certificates   

Warehouse and pledge certificates may be transferred to another person either together or separately by way of inscriptions of transfer (on the basis of endorsement).


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Article 6.860. Release of goods under the double warehouse certificate


1. The warehouse shall release the goods to the holder of the warehouse and pledge certificate (double warehouse certificate) only in exchange for both of these certificates together.


2. The holder of the warehouse certificate who does not have a pledge certificate but has paid the amount of debt on it, shall be released the goods by the warehouse in exchange for the warehouse certificate and a receipt evidencing payment of the full amount of the debt.


3. If the warehouse releases the goods in violation of the rules laid down in this Article, it must pay to the holder of the pledge certificate the entire amount secured by the pledge.


4. The holder of the warehouse and pledge certificates shall be entitled to demand that goods be released to him in parts. In such cases, in exchange for the original certificates, new certificates shall be issued to him for the goods remaining in the warehouse.

 


Article 6.861. Ordinary warehouse certificate


1. An ordinary warehouse certificate shall be a bearer instrument granting the bearer the right to the release of the goods.


2. An ordinary warehouse certificate must contain the particulars provided for in points 1, 2, and 4 to 7 of paragraph 1 of Article 6.857 of this Code as well as an indication that it has been issued to the bearer.


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Article 6.862. Deposit of things with the right of their disposal

If the law or the contract establishes the right of the warehouse to dispose of the things deposited for safekeeping, the rules regulating the loan contract (Chapter XLIII of this Code) shall also apply to the relationships between the parties, however, the place and time of release of the things shall be governed by the provisions of this Chapter.

 


SECTION THREE

SPECIAL TYPES OF DEPOSIT


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1. Sequestration shall be a contract of deposit by which two or more persons who are in dispute over the right to a thing place the thing in the hands of another person chosen by them (sequestrator).   This person shall undertake to restore the thing, upon the resolution of the dispute, to the person who will then be entitled to it.


2. The object of sequestration may be an immovable thing as well as a movable thing.


3. The parties shall select the sequestrator by mutual agreement. They may select a party to the dispute to act as sequestrator. Where the parties disagree on the selection of the sequestrator, he shall be appointed by the court hearing the dispute. A person may be appointed sequestrator only with his consent.


4. The sequestrator shall have the right to perform any necessary acts in respect of the sequestered thing which may be performed by a simple property administrator, save for the exceptions established by agreement between the parties or a court ruling.


5. The sequestrator shall be entitled to remuneration unless otherwise stipulated by the contract or a court ruling.


6. The sequestrator shall restitute the thing to the person specified in the court judgment or ruling.  If the parties enter into a settlement agreement, the thing shall be restored to the persons specified in the settlement agreement.


7. Upon the termination of sequestration, the sequestrator must render an account


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shall be restored to the persons specified in the settlement agreement.


7. Upon the termination of sequestration, the sequestrator must render an account of his management of the property and deliver it to the parties or the court.


8. Where a person is appointed sequestrator of the attached property by the court, the bailiff, the tax administrator or any other officer, the sequestration shall be subject, in addition to the provisions of this Article, to those laid down in the Code of Civil Procedure.


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Article 6.864. Deposit of things with a pawnshop


1. A contract for depositing things owned by a natural person with a pawnshop shall be a public contract.


2. A contract for depositing things with a pawnshop shall be certified by a pawn ticket issued to the pawnor.


3. The price of the things deposited with the pawnshop shall be set by agreement between the parties.


4. The pawnshop must insure, at its own expense and for the benefit of the pawnor, the thing deposited with it for the amount equal to the price of the thing set by agreement between the parties.


5. Where a thing deposited with the pawnshop is not redeemed within the time period set in the contract, the pawnshop must keep the thing for one more month at the pawnor’s expense. Upon the expiration of the said time period, the pawnshop shall have the right to sell the thing in the manner laid down in paragraph 2 of Article 6.843 of this Code.


6. The proceeds of such sale shall be used to cover the expenses of the pawnshop which may have arisen in relation to the storing of the thing and other amounts due to it, while the balance shall be repaid by the pawnshop to the pawnor.


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Article 6.865. Deposit of things with hotels


1. A hotel shall be liable, without a special agreement with the person who lodges with it, in the same manner as a depositary, for the loss, shortage or damage of the personal effects of the said person.  The hotel shall be entitled to retain, as security for payment of the cost of lodging and services actually provided by the hotel, the personal effects brought into the hotel by the guest.


2. Under paragraph 1 of this Article, the hotel shall be liable for the loss, shortage or damage of the things which:


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1) were kept in the hotel room or at any other place in the hotel during the person’s lodging with the hotel;


2) were entrusted by the hotel guest as deposit to the hotel staff for safekeeping within the hotel or outside it;


3) were placed as deposit with the hotel for a reasonable time starting from the moment the person takes up lodging with the hotel and after his departure.


3. Where the property has not been deposited with the hotel, with the exception of the cases where the hotel has refused to accept the property which the hotel is bound to accept for safe custody, the civil liability for the loss, shortage or damage of the personal effects of a person who lodges with it shall be limited to the price, multiplied by one hundred, paid for the overnight lodging at the hotel by that person. The civil liability for the loss, shortage or damage of one thing of a person who lodges with the hotel shall be limited to the price, multiplied by fifty, paid for the overnight lodging at the hotel by that person. 


4. The hotel shall be liable and its civil liability shall not be limited pursuant to paragraph 3 of this Article where the damage, destruction or loss of the property is caused through the fault of the hotel or any person for whose actions the hotel is responsible


5. The hotel must accept for deposit sums of money, jewellery and other valuables brought by the persons who lodge with


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is responsible


5. The hotel must accept for deposit sums of money, jewellery and other valuables brought by the persons who lodge with it, unless the things are dangerous to the people around or, by reason of their large size or excessive value, are cumbersome to the hotel and its guests.


6. A hotel, accepting for deposit sums or money or other valuables, shall have the right to require them to be properly packaged and marked.


7. Unless the hotel administration is immediately notified by the person lodging with the hotel of the disappearance, shortage, damage or destruction of his things, the hotel shall be released from liability for failure to preserve the things.


8. The hotel shall not be liable for failure to preserve the things if this was due to the fault of the owner of the things, the persons accompanying him or invited to the hotel or due to force majeure or because of the properties of the thing. Neither shall the hotel be liable for failure to preserve the vehicles of the hotel guests left outside the hotel’s guarded parking lot, and the things or animals left in the said vehicles.


9. An agreement between the parties or a unilateral statement by the hotel that the hotel is not liable for the safety of the things of its guests or establishing a limited liability shall be null and void.  The limited liability of the hotel shall be defined in paragraph 3 of this Article.


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10. The rules of this Article shall also apply to the deposit of things with motels, rest homes, residential care homes, sanatoria and other similar institutions.


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Article 6.866. Deposit of things with a bank


1. A bank shall have the right to accept for deposit securities, precious metals and precious stones, other valuables and documents.


2. The contract of deposit of things with a bank shall be certified by the storage certificate issued to the depositor by the bank.


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1. The contract of deposit may provide for the safekeeping of the client’s valuables in an individual bank safe/safe deposit box or an isolated vault of the bank allotted for use by the client.


2. Under the contract of deposit of valuables in an individual bank safe, the client shall have the right to place the valuables in the safe and take them from the safe by himself. The bank shall issue the client with the key to the safe and the client’s identification card or any other document certifying the client’s right to enter the bank depository where the client’s individual safe is located and to open the safe.


3. The contract of deposit may also provide for the client’s right to work in the bank with the valuables deposited in the individual bank safe.


4. The bank shall accept from the client the valuables to be deposited in the safe and shall also supervise their placement in and withdrawal from the safe and shall hand over to the client the valuables taken from the safe. Where the contract stipulates that the client uses the individual safe personally, the bank must ensure that the client is able to place the valuables in the safe and withdraw them from the safe unattended by anyone, bank employees included. The bank must also ensure the client’s free entry into the bank depository where his individual safe is located.


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anyone, bank employees included. The bank must also ensure the client’s free entry into the bank depository where his individual safe is located. 


5. Unless otherwise provided by the contract of deposit, the bank shall be released from liability for the failure to preserve the valuables placed in the individual safe if it proves that under the conditions of safekeeping, no person was allowed access to the contents of the safe without the client’s knowledge or that the valuables were lost due to force majeure.


6. Where, under the contract, the individual safe is allotted for use to another person and the liability of the bank for the preservation of the valuables placed in the safe is not established, the rules regulating the contract of lease shall apply to the contract of this type.


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Article 6.868. Deposit of things in left luggage offices of transport companies


1. General use left luggage offices of transport companies must accept for safekeeping personal effects of passengers and other persons, irrespective of whether or not the passenger possesses travelling tickets. The contract of deposit in left luggage offices of transport companies shall be a public contract.


2. Conclusion of the contract of deposit in a left luggage office, except for automatic safety deposit boxes, shall be confirmed by issuing the depositor with a receipt or token.  In case of loss of the receipt or token, the thing shall be released to the depositor after he proves his ownership of the thing.


3. The time period of safekeeping of the thing in the left luggage office shall be set by agreement between the parties. Transport companies shall have the right to set maximum time periods for the safekeeping with possible extension by agreement between the parties. Things that are not retrieved within the set period shall be stored for one more month and thereafter sold in accordance with the procedure established in paragraph 2 of Article 6.843 of this Code.


4. In case of loss, shortage or damage of the things deposited for safekeeping, the transport company must, within twenty-four hours after the filing of the claim, compensate for the value specified when the depositor delivered the things for safekeeping.


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Article 6.869. Deposit of things in the cloakroom


1. It shall be presumed that the safekeeping of things in cloakrooms is gratuitous, except in cases when the things are delivered upon explicit agreement of deposit for remuneration.


2. Irrespective of whether the contract of deposit is onerous or not, the depositary must take all measures within his power in order to ensure the safekeeping of the things delivered to the cloakroom.


3. The rules of this Article shall also apply in the cases when natural persons leave their outer clothing, headgear and other similar things in enterprises, institutions, organisations or means of transport in the places designated for that purpose without a special delivery thereof for safekeeping.

 


CHAPTER XLIII

LOAN

 


SECTION ONE

GENERAL PROVISIONS


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CHAPTER XLIII

LOAN

 


SECTION ONE

GENERAL PROVISIONS

 


Article 6.870. Concept of a loan agreement


1. Under a loan agreement, one party (the lender) shall transfer into the ownership of the other party (the borrower) money or consumable generic things, and the borrower shall undertake to repay the lender the same amount of money (the amount of the loan) or return the same amount of things of the same kind and quality, and to pay the interest unless otherwise established in the agreement.


2. The loan agreement shall be deemed concluded from the moment of transfer of money or things.


3. The borrower shall become the owner of the things/money transferred to him. From the moment of transfer of the things, the risk of accidental loss or damage of the things shall pass to the borrower.


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Article 6.871. Form of a loan agreement


1. The loan agreement of natural persons must be made in writing if the amount of the loan exceeds six hundred euros.


2. If the lender is a legal person, the loan agreement must be made in writing in all events notwithstanding the amount of the loan.


3. The requirements of a written form shall be satisfied by a loan receipt or any other debt instrument, signed by the borrower, confirming the transfer of the subject matter of the loan agreement to the borrower.


4. Where the amount of the loan exceeds three thousand euros and the transaction is made in cash, the loan agreement must be drawn in the notarial form.


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Article 6.872. Interest


1. The amount of interest on the use of the amount of loan and the procedure of payment thereof shall be established by agreement between the parties. If the parties have not agreed on the amount of interest, the interest shall be determined based on the average interest rate of commercial banks of the place of residence or business of the borrower which existed at the moment of conclusion of the loan agreement.


2. Except when otherwise agreed by the parties, the interest shall be paid on a monthly basis until repayment of the amount of the loan.


3. It shall be presumed that the loan agreement is gratuitous if the subject matter of the loan agreement comprises generic things, unless otherwise established in the loan agreement. If the subject matter of the loan agreement is money, the loan agreement shall be presumed to be onerous.


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Article 6.873. Obligation of the borrower to repay the amount of the loan


1. The borrower must repay the received loan to the lender at the time and in accordance with the procedure laid down in the agreement.


2. In cases when the term for repayment of the amount of the loan is not set forth in the agreement or the loan is to be repaid upon demand, the borrower must repay the amount of the loan within thirty days from the day when the lender made the demand for performance of the agreement, unless otherwise established in the agreement.


3. Unless the loan agreement provides otherwise, the borrower shall be entitled to repay the amount of the gratuitous loan prior to the term.    


4. The amount of the non-gratuitous loan may be repaid by the borrower prior to the term only upon consent of the lender.


5. Unless otherwise prescribed by the loan agreement, the amount of the loan shall be deemed repaid from the moment of its transfer to the lender or crediting to the bank account of the lender.


6. When the subject matter of the loan is an amount of money, the borrower must repay a nominal amount only, notwithstanding the changes of the value of a monetary unit, unless otherwise established in the agreement.


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Article 6.874. Consequences of the breach of the agreement by the borrower


1. In case of failure by the borrower to timely repay the amount of the loan, the borrower must pay the interest established in Article 6.210 of this Code from the day when the amount of the loan had to be repaid until the day of its actual repayment, notwithstanding the payment of the interest set forth in Article 6.37 of this Code, unless otherwise established in the loan agreement.


2. If the loan agreement provides for repayment of the amount of the loan in instalments and a regular instalment is not repaid when due, the lender shall be entitled to demand repayment of all the outstanding amount of the loan together with the accrued payable interest.


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Article 6.875. Contesting of the loan agreement


1. The borrower shall have the right to contest the loan agreement if he has not actually received the money or things, or if he has received less than specified in the agreement.  Such circumstances must be proved by the borrower.


2. If the loan agreement had to be made in writing (Article 6.871 of this Code), it shall not be permitted to contest the loan agreement subject to the testimony of witnesses in accordance with paragraph 1 of this Article, except for the cases stipulated in Article 1.93 of this Code or if the loan agreement is concluded by fraud, compulsion or real threat, or by virtue of wilful arrangement of the borrower’s agent with the lender, or due to existing grave circumstances.


3. If it is proved that money or things have not actually been transferred to the borrower, the loan agreement shall be deemed not concluded. When the borrower has received less money or things than provided for in the agreement, the loan agreement shall be deemed concluded for the actually received amount of money or things.


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Article 6.876. Legal consequences of the loss of security for fulfilment of the borrower’s obligations

If the borrower fails to fulfil the obligation under the loan agreement to provide the security for the fulfilment of his obligations or if the provided security is lost or its conditions deteriorate due to the circumstances beyond the lender’s control, the lender shall be entitled to request the borrower to repay the amount of the loan prior to the term as well as to pay the interest, unless otherwise established in the loan agreement.

 


Article 6.877. Purpose loan


1. Where the loan agreement is concluded with the provision that the borrower will use the amount of the loan for a certain purpose (the purpose loan), the borrower must ensure that the lender is able to control the usage of the amount of the loan by the borrower.


2. If the borrower uses the amount of the loan for a purpose other than that set forth in the loan agreement or if he breaches the condition established in paragraph 1 of this Article, the lender shall be entitled to request the borrower to repay the amount of the loan prior to the term and pay the interest, unless the agreement provides otherwise.


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Article 6.878. Bill of exchange

If the borrower issues a bill of exchange under which he undertakes to repay the received amount of the loan on the term specified in such note, the relations between the parties shall be governed by the provisions of this Chapter to the extent such provisions do not contradict the law regulating the bills of exchange.

 


Article 6.879. Bond


1. In cases provided by laws, a loan agreement may be concluded by issuing and selling bonds.


2. A bond shall be deemed a security which confirms its holder’s right to receive from the person who has issued such bond, within the term specified in the bond, the amount of the nominal value of the bond or any other property equivalent. A bond shall also grant its holder the right to receive the interest specified in the bond on the nominal value of the bond or other property rights. 


3. The provisions of this Chapter shall apply to the relations between the person who has issued the bond and the holder of the bond only if the laws do not prescribe otherwise.

 


Article 6.880. Substitution (novation) of the debt by the loan obligation

By agreement of the parties, the debt arising from the purchase and sale, lease or any other contract may be substituted by the loan obligation according to the rules set forth in Articles 6.141 to 6.144 of this Code.


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SECTION TWO

CREDITING

 


Article 6.881. Concept of a crediting agreement


1. Under a crediting agreement, a bank or any other credit institution (the creditor) shall undertake to grant to the borrower monetary funds (the credit) in the amount and under the terms and conditions established in the agreement, and the borrower shall undertake to repay the received amount to the creditor and pay the interest.


2. The provisions of Section One of this Chapter shall apply to crediting relations to the extent they do not contradict the essence of the crediting agreement and the rules set forth in the present Section.

 


Article 6.882. Form of a crediting agreement

The crediting agreement must be made in writing. Failure to comply with this requirement shall make the crediting agreement null and void.


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Article 6.883. Refusal to grant or accept the credit


1. The creditor shall be entitled to refuse to grant to the debtor, in full or in part, the credit provided for in the agreement upon disclosure of the circumstances expressly evidencing that the credit will not be repaid in due time.


2. The borrower shall be entitled to refuse to accept the credit, in full or in part, upon notification of the creditor to that effect before the term set forth in the agreement for granting of the credit, unless otherwise established in the agreement.


3. If the borrower breaches the obligation for the purposive usage of the credit as established in the agreement (Article 6.877 of this Code), the creditor shall be entitled to refuse to continue crediting the borrower and demand repayment of the granted credit prior to the term.


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Article 6.884. Crediting with goods


1. The parties may enter into an agreement on crediting with goods establishing an obligation of one party to transfer to the other party the generic things. Such agreement shall be subject to the provisions of this Section, unless otherwise specified in the agreement between the parties.


2. The quantity, assortment, completeness, quality, containers and packaging of the goods to be transferred shall be determined in accordance with the rules of Articles 6.327 to 6.333 of this Code, unless otherwise stipulated by the agreement of the parties and this is not contrary to the essence of the agreement.

 


Article 6.885. Commercial crediting


1. In an agreement the performance whereof is related to the transfer into the ownership of the other party of money or generic things, the parties may provide for the granting of the credit. The credit may be granted by deferring or apportioning the advance payment, payment for goods, works or services (commercial crediting).


2. The relations of the commercial crediting shall be subject to the provisions of this Section, unless otherwise stipulated by the agreement of the parties and this is not contrary to the essence of the agreement.   

 


SECTION THREE

CONSUMER CREDIT


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SECTION THREE

CONSUMER CREDIT

 


Article 6.886. Concept of a consumer credit agreement


1. Under a consumer credit agreement, the creditor shall grant or promise to grant to the borrower credit in the form of a deferred payment, loan or other similar financial accommodation, except for agreements for the continued provision of services of the same kind or for the supply of goods of the same kind, where the borrower pays for such services or goods for the duration of their provision or supply by means of instalments.


2. When providing a consumer credit service, the creditor must ensure the adequate implementation of the principle of responsible lending.


3. Relationships pertinent to consumer credit shall be regulated by this Code and other laws.


4. Under this Article, the creditor shall be a person who, in accordance with the procedure and in the cases laid down by law, grants or promises to grant consumer credit in the course of his commercial practices.

 

Article 6.887. No longer effective from 1 April 2011.

 

Article 6.888. No longer effective from 1 April 2011.

 

Article 6.889. No longer effective from 1 April 2011.

 

Article 6.890. No longer effective from 1 April 2011.

 

Article 6.891. No longer effective from 1 April 2011.


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Article 6.891. No longer effective from 1 April 2011.

 


CHAPTER XLIV

BANK DEPOSIT

 


Article 6.892. Concept of a bank deposit agreement


1. Under a bank deposit agreement (the deposit), one party (a bank or any other credit institution) shall undertake to accept from the other party (the depositor) or, having received the amount of money (deposit) transferred to the other party, shall undertake to return such deposit and pay interest on it under the terms and procedure established in the agreement.


2. When the depositor is a natural person, the bank deposit agreement shall be deemed a public contract.


3. The relations between the bank or any other credit institution and the depositor, who has an account in which the deposit has been entered, shall be governed by the provisions of Chapter XLVI of this Book regulating the bank account agreement, unless the rules of the present Chapter provide otherwise and this is not contrary to the essence of the bank deposit agreement.


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Article 6.893. Right to accept deposits


1. The right to accept deposits shall be vested only in the banks or any other credit institutions having the permit (licence) issued for such activity in accordance with the procedure prescribed by laws.


2. If the deposit was accepted by a person not entitled to do so or if the deposit was accepted in violation of the operational rules of the banks, the depositor shall have the right to demand immediate repayment to him of all the paid amounts, the interest determined by laws and damages to the extent not covered by the interest.


3. Unless the law provides otherwise, the legal consequences set forth in paragraph 2 of this Article shall also apply when:


1) the monetary funds are collected from the sale of shares or other securities the issue whereof is recognised as unlawful;


2) the monetary funds are collected from the issue of bills of exchange or other securities and their holders are not granted the right to receive the monetary funds on first demand.


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Article 6.894. Form of a bank deposit agreement


1. The bank deposit agreement must be made in writing.


2. The depositor’s book, the deposit certificate or any other document issued by a bank or any other credit institution, which complies with the operational rules of  banks or other credit institutions, shall be recognised as a written form of the agreement.


3. If the written form is not observed, the bank deposit agreement shall be null and void.


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1. The bank deposit agreement may include the obligation of the bank or any other credit institution to pay the deposit on first demand (demand deposit) or the obligation of the bank or any other credit institution to pay the deposit after the lapse of a certain term (fixed-term deposit).


2. The legal acts regulating the activities of the banks or any other credit institutions and the parties by agreement may also provide for other types of deposits.


3. Notwithstanding the type of the deposit, the bank or any other credit institution must pay the deposit in full or in part on the first demand of the depositor. The provision of the agreement stipulating the depositor’s waiver of the right to withdraw the deposit on first demand, with the exception of irrevocable fixed-term deposits, shall be null and void.


4. The irrevocable fixed-term deposit shall not grant the depositor the right to withdraw the deposit or part thereof before the expiry of the term specified in the agreement, except in the cases specified in Article 6.8951 of this Code.  Prior to the conclusion of the irrevocable fixed-term deposit agreement, the bank or other credit institution must inform the depositor about the peculiarities of the irrevocable fixed-term deposit, the differences from other proposed deposits, and the conditions for the conclusion, renewal and termination of the fixed-term deposit agreement.  The obligation to prove that this information has been provided


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and the conditions for the conclusion, renewal and termination of the fixed-term deposit agreement.  The obligation to prove that this information has been provided to the depositor shall be borne by the bank or any other credit institution.


5. In case when the deposit is paid to the depositor before the maturity of the term established in the agreement or prior to the occurrence of other circumstances set forth therein (except for demand deposits), the interest shall be paid in the amount corresponding to the interest on the demand deposits, unless otherwise established in the agreement.


6. If the depositor does not demand payment of the fixed-term or irrevocable fixed-term deposit after the expiry of its term, or other circumstances specified in the contract arise, the agreement shall be deemed renewed on the conditions of the demand deposit, unless otherwise established in the agreement. The depositor must express his consent to the bank or other credit institution for the renewal of each agreement on the conditions of the irrevocable fixed-term deposit at least fourteen days and not more than sixty days before the expiry of the term of the irrevocable fixed-term deposit. The obligation to prove the receipt of the depositor’s consent shall be borne by the bank or any other credit institution.


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Article 6.8951. Termination of the irrevocable fixed-term deposit agreement

In extraordinary circumstances (loss of work, serious illness, death of the depositor, his spouse, child or other close relative, or other important circumstances provided for in the contract), or in other cases with the consent of the bank or any other credit institution, the depositor, who is a consumer, shall have the right to terminate the irrevocable fixed-term deposit agreement or withdraw part of the deposit before the expiry of the term. In all such cases, the bank or other credit institution must pay out all or part of the deposit on demand by the depositor, without any additional costs arising to the depositor from the termination of the agreement.


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1. The bank or any other credit institution shall pay to the depositor the interest in the amount established in the agreement.


2. The amount of the interest may be differentiated according to the type of deposit.  It shall be prohibited to set the amount of the interest based on the depositor’s personal, official or other characteristics which are not related to the amount, type or term of the deposit.


3. Where the amount of the interest is not specified in the agreement, the bank or any other credit institution shall pay an average interest rate which existed on the day of conclusion of the agreement in the place of conclusion thereof.


4. Unless the agreement provides otherwise, the bank or any other credit institution shall be entitled to unilaterally change the amount of the interest paid for the demand deposits. If the bank or any other credit institution reduces the amount of the interest, the new interest rate shall apply in respect of the deposits paid prior to notification of the depositors about the reduction of the amount of the interest only after the lapse of one month from such notification, unless otherwise established in the agreement.


5. The bank or any other credit institution shall have no right to unilaterally reduce the amount of contractual interest paid on irrevocable fixed-term deposits.  The bank or any other credit institution shall have no right to unilaterally reduce the interest payable on other deposits (except demand deposits), unless otherwise specified by the agreement.


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Article 6.897. Calculation and payment of interest


1. Calculation of the interest on deposits shall commence from the day following the day of acceptance of the deposit and shall be calculated until the day preceding the day when the deposit is paid or written off from the account on other grounds.


2. Unless the agreement provides otherwise, the interest shall be paid to the depositor upon his demand, after the expiry of the quarter, separately from the amount of the deposit. The deposit shall be increased by the amount of the unpaid interest and the interest shall be calculated on the increased amount.


3. The deposit shall be paid together with the interest accrued until that moment.


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Article 6.898. Guarantees for the return of deposits.


1. The bank and any other credit institution shall secure the return of deposits in accordance with the established procedure by compulsory insurance thereof and, in cases determined by laws, by other means.


2. When entering into the bank deposit agreement, the bank or any other credit institution must furnish to the depositor the information about the guarantees for the return of the deposit.


3. If the bank or any other credit institution fails to perform its obligation to secure the return of the deposit, as well as in case of loss or worsening of the guarantees, the depositor shall have the right to demand from the bank or any other credit institution immediate return of the deposit, payment of the interest and compensation for the loss.

 


Article 6.899. Right of third persons to pay money into the depositor’s account

Third persons shall have the right to pay money into the depositor’s account unless otherwise established in the agreement. In such event, the bank or any other credit institution must transfer all the amounts received on behalf of the depositor into the depositor’s account.  In such cases, it shall be presumed that the depositor has agreed to accept the amounts of money from third persons and has provided them with the necessary details of his deposit account.


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Article 6.900. Deposits for the benefit of third persons


1. A deposit may be made in the bank or any other credit institution for the benefit of a third person. Unless the agreement provides otherwise, such third person shall acquire the depositor’s rights from the moment of his first demand to the bank or any other credit institution or from the moment of any other expression of his intention to exercise the depositor’s rights.


2. The essential condition of the bank deposit agreement for the benefit of a third person shall be the name and surname or the title of the third person.


3. The bank deposit agreement for the benefit of the third person who died prior to the moment of conclusion of the agreement or did not exist at the moment of conclusion thereof shall be null and void.


4. A person who has entered into the bank deposit agreement for the benefit of a third person shall have the right to exercise the depositor’s rights only until the moment when the third person states his intention to exercise the depositor’s rights.


5. The provisions regulating the agreement for the benefit of a third person, shall apply to the deposit agreement of the bank or any other credit institution only to the extent they do not contravene the rules established in this Article and the essence of the bank deposit agreement.


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Article 6.901. Depositor’s book


1. Unless the agreement provides otherwise, the bank deposit agreement shall be documented in the form of the depositor’s book. The depositor’s book may only be issued in the depositor’s name.


2. The depositor’s book must specify the name of the bank or any other credit institution, their address, e-delivery box address and other details, the depositor, the amount of the deposit, all terms and conditions of the agreement, as well as the accounting of the amounts of money paid into and from the account, and the computed and paid interest.


3. All operations in respect of the deposit shall be performed only upon submission of the depositor’s book.


4. If the book is lost or unfit for use, it shall be replaced in accordance with the procedure determined by the bank or any other credit institution.

 


Article 6.902. Deposit certificate


1. The deposit certificate shall be a security certifying the amount of the deposit and the depositor’s rights to the deposit, as well as the interest upon expiration of the term prescribed for the deposit.


2. The deposit certificate may only be issued in the depositor’s name.

 


CHAPTER XLV

FACTORING


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CHAPTER XLV

FACTORING

 


Article 6.903. Concept of a factoring agreement


1. Under a factoring agreement, one party (the factor) shall transfer or undertake to transfer to the other party (the client) the money in exchange for the monetary claim of the client (the creditor), related to the sale of goods, performance of works or provision of services, against a third person (the debtor), and the client shall assign or undertake to assign to the factor the monetary claim against the debtor (financing on condition that the monetary claim is assigned) and to pay the remuneration set forth in the agreement.


2. The client may assign the monetary claim against the debtor to the factor also with a view to securing the performance of his obligations to the factor.


3. The factoring agreement may establish the factor’s obligation to handle the client’s bookkeeping, provide to the client financial services related to the monetary claims which are the subject matter of the assignment.


4. The factoring agreement may be long-term or executed in respect of each individual case.

 


Article 6.904. Factor

Under a factoring agreement, the factor may be only a bank or any other profit-seeking legal person entitled to perform factoring activities in accordance with the procedure prescribed by laws.


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Article 6.905. Subject matter of a factoring agreement


1. The subject matter of a factoring agreement in respect of which the financing is provided may be a monetary claim under which the payment term has matured (the existing claim) and a future right to receive the amounts of money (the future claim).


2. The monetary claim which is the subject matter of the factoring agreement must be defined in the agreement concluded between the factor and the client in such a way that the existing claim can be identified at the moment of conclusion of the factoring agreement and the future claim can be identified no later than at the moment when it arises.


3. By the assignment of the future monetary claim, it shall be recognised that such claim has passed to the factor upon arising of the right to claim from the debtor the amounts of money established in the agreement. If the assignment of the monetary claim is related to a certain event, the assignment shall be recognised as having occurred upon the occurrence of such event. In such cases, no additional formalisation of the assignment of the monetary claim shall be required.


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Article 6.906. Client’s liability towards the factor


1. Unless the factoring agreement provides otherwise, the client shall be liable towards the factor for the validity of the assigned monetary claim which is the subject matter of the agreement.


2. The monetary claim to be assigned shall be valid if the client has the right to assign such claim and the circumstances due to which the debtor would have the right not to satisfy the claim are unknown at the moment of the assignment.


3. If the factor demands the satisfaction of the monetary claim assigned to him and the debtor fails to satisfy it or satisfies it improperly, the client shall not be liable for such actions of the debtor, unless otherwise established in the agreement.

 


Article 6.907. Invalidity of the prohibition to assign the monetary claim


1. The assignment of the monetary claim to the factor shall be also valid in cases when the agreement made between the client and the debtor prohibits or limits such action.


2. The rule established in paragraph 1 of this Article shall not release the client from the obligations and liability towards the debtor for the breach of the condition of the agreement which prohibits or limits the assignment of the claim.


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Article 6.908. Subsequent assignment of the monetary claim


1. Unless the factoring agreement provides otherwise, the factor shall have no right to further assign the monetary claim assigned to him.


2. If the factoring agreement permits a subsequent assignment, such assignment shall accordingly be subject to the provisions of this Chapter.

 


Article 6.909. Performance of the monetary claim


1. The debtor must pay the amounts of money to the factor if the debtor has received from the client or the factor a written notification about the assignment of the monetary claim to the factor and the notification specifies the monetary claim and the factor to whom the obligation is to be performed.


2. At the debtor’s request, the factor must provide him with evidence of the assignment of the monetary claim within a reasonable time. If the factor fails to perform this obligation, the debtor shall be entitled to perform the obligation to the client.


3. The performance of the monetary claim to the factor in accordance with the rules set forth in this Article shall release the debtor from the performance of an appropriate obligation to the client.


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Article 6.910. Factor’s rights to the amounts of money received from the debtor


1. If the financing of the client under the factoring agreement manifests itself in the purchase of the monetary claim from the client, the factor, having purchased such claim, shall acquire the right to all the amounts received from the debtor when the latter performs the demand and the client shall be liable towards the factor if the latter receives less from the debtor than he has paid to the client for the purchased claim, unless otherwise established in the agreement.   


2. If the client has assigned the monetary claim to the factor in order to secure the performance of his obligations to the factor, the factor shall submit to the client a report and transfer to him the amount in excess of the debt of the client secured in this way, unless otherwise established in the agreement. If the factor receives from the debtor a smaller amount than the client’s secured debt, the client shall be liable towards the factor for the remaining uncovered part of the debt.


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Article 6.911. Cross claims of the debtor


1. When the factor makes a claim against the debtor for the payment of money, the debtor shall be entitled to set off his cross monetary claims, arising from the agreement between the debtor and the client, provided that the debtor already had such claims at the moment of receipt of notification of the assignment of the claim to the factor.


2. The debtor may not use for his defence against the factor the claims which the debtor could have bought against the client due to the client’s breach of the prohibition to assign the monetary claim.

 


Article 6.912 Repayment to the debtor of the debts received by the factor


1. When the client breaches the agreement concluded with the debtor, the debtor shall have no right to demand from the factor the repayment of the amounts the latter has already received if the debtor is entitled to receive such amounts directly from the client.


2. The debtor who is entitled to recover the amounts paid to the factor directly from the client shall have the right to demand from the factor the repayment of such amounts if the debtor proves that the factor has not paid the amount set forth in the factoring agreement to the client or has paid it in the knowledge that the client did not fulfil his obligation to the debtor.

 


CHAPTER XLVI

BANK ACCOUNT


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CHAPTER XLVI

BANK ACCOUNT

 


Article 6.913. Concept of a bank account agreement


1. Under a bank account agreement, the bank shall undertake to accept and credit the money into the account opened by the client (the owner of the account), follow the client’s instructions concerning the transfer and payment of certain amounts from the account, as well as to carry out any other operations performed by the bank, and the client shall undertake to pay the bank for the services and operations effected.


2. The bank may dispose of the funds in the client’s account provided that it secures the client’s right to freely dispose of such funds.


3. The bank shall have no right to determine and control the use of the money by the client or impose any other limitations of the client’s right to dispose of the funds in the account at his own discretion, except as provided for by law or the bank account agreement.


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Article 6.914. Conclusion of a bank account agreement


1. Upon the conclusion of a bank account agreement, a bank account shall be opened with the bank for the client or his indicated person subject to the terms and conditions provided for in the agreement.


2. The bank must conclude a bank account agreement with the client who makes an application to open such account, subject to the terms and conditions declared by the bank for opening of a certain type of account, which must comply with the requirements set by laws and legal acts governing the activities of banks.


3. The bank shall have no right to refuse to open an account if the possibility for its opening is set forth in the law, operational documents of the bank or the licence issued to the bank, except for the cases when such refusal is permitted by laws.


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Article 6.915. Approval of the right to dispose of the funds in the account


1. The rights of the persons entitled to dispose, in the name of the client, of the funds in the account shall be approved by law or any other legal act and the documents stipulated in the bank account agreement, which must be submitted to the bank in the accordance with the established procedure.


2. The client shall have the right to instruct the bank to withdraw funds from the account at the request of third persons. Such instructions shall be accepted by the bank if the client specifies in writing the necessary details allowing to identify the person who has the right to withdraw the funds from the account.


3. The bank account agreement may provide that the right to dispose of the funds in the account shall be confirmed by electronic means of payment using a person’s signature, code, password or other data confirming that the instruction was given by the person entitled to do so.

 


Article 6.916. Operations performed by the bank

The bank must perform all operations to the client which are established for an appropriate type of accounts by the law, other legal acts governing the activities of the bank as well as banking customs, unless otherwise established in the bank account agreement.


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Article 6.917. Time limits for performance of operations


1. The bank must credit to the client’s account the funds not later than on the day following the day on which it received an appropriate payment document, unless the bank account agreement provides for a different time limit.


2. The bank must pay or transfer the funds upon the client’s instruction not later than on the day following the day on which it received an appropriate payment document, unless otherwise established in the bank account agreement.

 


Article 6.918. Crediting of the account


1. If the bank pays money from the client’s account in accordance with the bank account agreement, notwithstanding the fact whether or not there is any money in the account (crediting of the account), it shall be deemed that the bank grants to the client a credit of an appropriate amount from the day of payment of the money.


2. The relations between the bank and the client in respect of the crediting of the account mutatis mutandis shall be governed by the provisions of Chapter XLIII of this Book, unless otherwise established in the bank account agreement.


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Article 6.919. Fees for banking services and operations


1. The client shall pay for the services provided and operations performed by the bank under the terms and procedure stipulated in the bank account agreement.


2. The bank shall be entitled to write off from the client’s account, on quarterly basis, the amounts owed to the bank for the services provided to the client, unless otherwise established in the bank account agreement.

 


Article 6.920. Interest for the use of the funds in the account

The bank shall pay to the client the interest set forth in the agreement for the use of the funds in the account, unless otherwise established in the bank account agreement. The interest shall be transferred to the client’s account within the established time limits, and if such time limits are not established, upon the expiration of each quarter.


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Article 6.921. Set-off of mutual claims of the bank and the client


1. The monetary claims of the bank and the client related to the overdraft, payment for the banking services and payment of interest shall result in a set-off, unless otherwise established in the bank account agreement.


2. The set-off of the claims provided for in paragraph 1 of this Article shall be effected by the bank. The bank must notify the client about the effected set-off within the time limit established in the agreement, and, if such time limit is not established, within a reasonable time.

 


Article 6.922. Grounds for withdrawal of the funds from the account


1. The funds shall be withdrawn from the account upon the instruction of the client.


2. Without the client’s instruction, the funds may be withdrawn by the court judgment and in other cases determined by law or the bank account agreement.

 


Article 6.923. Order of sequence of withdrawal of the funds

The funds shall be withdrawn in the order of receipt of the client’s instructions and other documents (calendar order of sequence) unless otherwise specified by the law.


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Article 6.924. Liability of the bank for improper performance of operations

If the bank fails to credit the received funds into the client’s account on time or groundlessly withdraws them from the account, also if it does not follow the client’s instructions concerning the transfer or payment of the funds from the account, the bank must pay the client the interest set forth in the bank account agreement, and, if such interest is not established, the interest set forth in Article 6.210 of this Code.

 


Article 6.925. Bank secrecy


1. The bank must secure the confidentiality of the bank account, the deposit, all related operations and the client.


2. The information pertaining to bank secrecy may be disclosed only to the clients or their agents and, in the cases and under the procedure prescribed by laws, to the relevant state-level authorities, officials and other persons.


3. If the bank discloses the secret of the bank, the client shall be entitled to claim compensation from the bank for the damage incurred thereby.


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Article 6.926. Limitations on the disposal of the account

It shall be prohibited to restrict the client’s possibility to dispose of the funds in the account, except for the cases when the funds in the account are seized or if the operations performed by the bank are suspended in the cases and under the procedure prescribed by laws.


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Article 6.927. Termination of the bank account agreement


1. The bank account agreement may be terminated at any time upon the application of the client.


2. At the request of the bank, the bank account agreement may be terminated where:


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1) the amount of the funds in the client’s account decreases so that it is below the minimum amount established in the agreement, and the client does not increase it within one month from the day of the notification sent by the bank;


2) for more than one year, the client’s account contains no monetary funds  and no operations have been performed with the client’s account, and the bank account agreement does not establish otherwise.


3. Where the conditions for the termination of the bank account agreement referred to in point 2 of paragraph 2 of this Article are fulfilled, the bank account agreement may be terminated also in the case of a registered seizure of the monetary funds held in the account or other restrictions on the disposal of such funds. Upon termination of the bank account agreement by the bank, the seizure of  monetary funds or other restrictions on the disposal thereof shall cease to be valid and shall be deregistered in accordance with the procedure laid down in the Law of the Republic of Lithuania on the Register of Property Seizure Acts.


4. The balance of the funds in the account shall be released to the client or transferred upon the client’s instruction to any other account not later than within five working days from the day of receipt of an appropriate written application of the client. If the client has given no instruction to transfer the funds to any other account, the bank shall transfer the funds to the internal accounts of the


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client. If the client has given no instruction to transfer the funds to any other account, the bank shall transfer the funds to the internal accounts of the bank.


5. The termination of the bank account agreement shall be the ground for closing of the account. The bank account agreement shall be valid until the closing of the account.


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Article 6.928. Bank accounts

The provisions of this Chapter shall apply respectively to the correspondent accounts or other accounts of banks, unless otherwise established by laws or the legal acts regulating banking activities.

 


CHAPTER XLVII

SETTLEMENTS OF ACCOUNTS

 


SECTION ONE

GENERAL PROVISIONS

 


Article 6.929. Settlement in cash and non-cash


1. Settlements involving natural persons who are not engaged in economic and commercial activities may be effected in cash, without limitation of the amount, or in non-cash.


2. Settlements between legal persons, as well as settlements involving natural persons who are engaged in economic and commercial activities, shall be effected in non-cash, and in the cases and under the procedure prescribed by laws, also in cash.


3. Settlement in non-cash shall be effected through banks with which appropriate accounts are opened, unless otherwise established by law or unless limited by the settlement forms used.


4. Settlements by cheques and bills of exchange shall be accordingly regulated by the law on cheques and the law on bills of exchange.


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Article 6.930. Means of settlements in non-cash


1. Settlements in non-cash shall be effected using payment orders, letters of credit, cheques, bills of exchange, collection and other means of settlement established by laws.


2. The parties shall be entitled to choose and determine any means of mutual settlement established in paragraph 1 of this Article.


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Article 6.9301.  Order of priority of settlements in cash and non-cash


1. The debtor, as a natural or legal person who does not have sufficient funds to satisfy all claims made, must effect settlements in the following order of priority: 


1) first in line, settlements according to enforceable documents regarding the compensation for damage caused by injury or death, and recovery of maintenance;


2) second in line, settlements according to enforceable documents regarding the payments arising from employment and copyright agreements;


3) third in line, settlements according to payment documents regarding contributions to the budget (state, municipal, State Social Insurance Fund and Compulsory Health Insurance Fund) and state monetary funds;


4) fourth in line, settlements according to enforceable documents to satisfy other monetary claims;


5) fifth in line, settlements according to other payment documents in the calendar order of priority.


2. Settlement of claims in the same line shall be effected in the calendar order of receipt of payment documents.


3. The order of priority of settlements in enforcement proceedings, bankruptcy, restructuring and other cases provided for by laws shall be established by other laws.

 


SECTION TWO

SETTLEMENTS BY PAYMENT ORDERS


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SECTION TWO

SETTLEMENTS BY PAYMENT ORDERS

 


Article 6.931. GENERAL PROVISIONS


1. When making settlements by payment orders, the bank shall undertake, subject to the payer’s instruction, to transfer the indicated amount from the payer’s account to any other account specified by the payer with the same bank or any other bank, within the time limits established by laws or in accordance with the procedure prescribed by laws, unless the bank account agreement or the operational rules of the bank provide for shorter time limits.


2. The rules of this Section shall also apply to the settlements when the bank transfers the funds upon the instruction of the person who has no account with the same bank, unless otherwise established by laws or the operational rules of the bank.


3. Settlements by payment orders shall be regulated by laws and the operational rules of banks.


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Article 6.932. Terms and conditions of performance of the payment order


1. The content and form of the payment order, as well as the content and form of the documents submitted along with the payment order must comply with the requirements set forth by the laws and operational rules of the bank.


2. Where the payment order fails to comply with the requirements specified in paragraph 1 of this Article, the bank may request to particularise the details of the payment order. Such request must be sent by the bank to the payer immediately upon the receipt of the payer’s order. If within the time limit established by laws or the operational rules of banks and, if no such time limit is established, within a reasonable time, the bank does not receive a reply to its request, the bank shall be entitled not to perform the payment order and return it to the payer, unless otherwise established by the law, operational rules of the bank or the agreement made between the bank and the payer.


3. The bank shall perform the payer’s order if there is money in the payer’s account, unless otherwise established in the agreement made between the bank and the payer. The payment orders shall be performed observing the order of priority of writing the funds off from the account established in Article 6.923 of this Code.


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Article 6.933. Performance of the order


1. The bank, having accepted a payment order, shall transfer the amount of money indicated in the order to the payee’s bank for crediting of such amount to the account of the person specified in the order within the time limit referred to in paragraph 1 of Article 6.931 of this Code.


2. The bank shall be entitled to use the services of other banks for the performance of operations related to the performance of the payment order.


3. The bank must immediately notify the payer at the latter’s request about the performance of the order. The content and form of such notification shall be established by the operational rules of the bank and the agreement made between the bank and the payer.


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Article 6.934. Liability for failure to perform or improper performance of the payment order


1. The bank, having failed to perform or improperly performed the payment order, shall be liable under the general rules of the contractual civil liability.


2. If the failure to perform or improper performance of the payment order is due to the fault of any other bank whose services have been used for the performance of certain operations, the liability towards the payer shall lie with the bank which accepted the payment order, unless otherwise established by law or the agreement.


3. Where the bank unlawfully withholds the funds by reason of violation of the rules of settlement, the bank must pay the interest set forth in Article 6.210 of this Code.

 


SECTION THREE

LETTER OF CREDIT


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SECTION THREE

LETTER OF CREDIT

 


Article 6.935. GENERAL PROVISIONS


1. In case of settlement by letters of credit, the bank which has opened the letter of credit and acting at the request and instruction of the payer or in its own name (the issuing bank) shall undertake to pay the money to the payee or accept and pay the bill of exchange issued by the payee, or authorise any other bank (the executing bank) to pay the money to the payee or accept and pay upon maturity the bill of exchange, or authorises any other bank to buy the documents (negotiate) provided that the submitted documents comply with the conditions of the letter of credit.


2. When designating another bank as the executing bank, the issuing bank may authorise it to withdraw the total amount referred to in the documents of the letter of credit from its account with the executing bank or undertake to transfer, upon the request of the executing bank, to the account indicated by the latter, or authorise the executing bank to apply to any other indicated bank for the payment.


3. Settlements by letters of credit shall be regulated by laws and the operational rules of the bank.


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Article 6.936. Revocable letter of credit


1. The revocable letter of credit shall be a letter of credit that may be changed or annulled by the issuing bank without prior notice to the payee. The change or annulment of the letter of credit shall not give rise to any obligations on the part of the issuing bank towards the payee.  


2. The issuing bank or the confirming bank, if any, must compensate the executing bank under the revocable letter of credit if, prior to the annulment of the letter of credit or change of the conditions, the documents conforming to the conditions of the letter of credit were submitted to such bank.


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Article 6.937. Irrevocable letter of credit


1. The irrevocable letter of credit shall be a letter of credit that may not be changed or annulled without the consent of the issuing bank, the confirming bank, if any, and the payee.


2. At the request of the issuing bank, any other bank which performs the operations in respect of the letter of credit may confirm the irrevocable letter of credit (the confirmed letter of credit). Such confirmation shall mean that the confirming bank undertakes, in addition to the obligation of the issuing bank, to make the payment or other operations subject to the conditions of the letter of credit.


3. The irrevocable letter of credit, confirmed by the confirming bank, may not be changed or annulled without the consent of the confirming bank.


4. Unless explicitly specified in the letter of credit whether it is revocable or irrevocable, the letter of credit shall be deemed irrevocable.


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Article 6.938. Performance of the letter of credit


1. For the purposes of performance of the letter of credit, the payee shall submit to the issuing bank, the confirming bank, if any, or the executing bank the documents confirming that all the conditions of the letter of credit have been met.  In case of breach of at least one of these conditions, the letter of credit shall not be performed.


2. If the executing bank has made the payment or carried out any other operation subject to the conditions of the letter of credit, the issuing bank or the confirming bank, if any, must compensate all the expenses incurred by such bank. All the expenses related to the performance of the letter of credit shall be borne by the payer.


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Article 6.939. Refusal to accept the documents


1. If the issuing bank or the confirming bank, if any, or the executing bank, which acts in their name, refuses to accept the documents which do not conform to the conditions of the letter of credit, such bank must immediately notify thereof, specifying the reasons for its refusal, the bank from which the documents were received, or the payee if the documents were received directly from him.


2. If the issuing bank or the confirming bank, if any, establishes that the documents fail to conform to the conditions of the letter of credit, the bank shall be entitled to refuse to accept such documents and demand from the executing bank the repayment of the amount paid to the payee in violation of the conditions of the letter of credit, together with the interest, or refuse to compensate the amounts paid.


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Article 6.940. Liability of the bank for violation of the conditions of the letter of credit


1. Liability towards the payer for the breach of the conditions of the letter of credit shall lie with the issuing bank, and towards the issuing bank, with the confirming bank, if any, and/or the executing bank, to the exclusion of exceptions set forth in this Article.


2. If the issuing bank or the confirming bank, if any, or the executing bank, which acts in their name, refuses, without due grounds, to pay the funds after the payee submits the documents conforming to the conditions of the letter of credit, it shall be liable towards the payee.


3. If the confirming bank, if any, and/or the executing bank improperly pays the funds under the letter of credit, in violation of the conditions of the letter of credit, the liability towards the payer shall lie with the confirming bank, if any, and/or the executing bank, unless otherwise established in the agreement between the payer and the issuing bank.


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Article 6.941. Closing of the letter of credit

The letter of credit shall be closed:


1) upon expiration of the term of the letter of credit;


2) upon annulment of the letter of credit by the issuing bank;


3) upon payment by the bank of the amount established in the letter of credit to the payee or performance of other operations prior to expiration of its validity term.

 


SECTION FOUR

COLLECTION

 


Article 6.942 GENERAL PROVISIONS


1. Collection shall mean operations performed by the bank (the instructing bank) with the documents upon the client’s order, with the purpose to receive the payment and/or the payment acceptance or issue documents, upon receipt of the payment and/or the payment acceptance or under other conditions.


2. The instructing bank, upon receipt of the client’s order, may use the services of any other bank (the collecting bank) for the performance of such order.


3. Liability for non-execution or improper execution of the client’s order shall lie with the instructing bank, unless otherwise established in the agreement between the client and the bank.


4. Settlements by collection shall be regulated by laws and the operational rules of the bank.


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1. If the received collection instructions are incomplete or the bank cannot follow them for certain reasons, or if not all the documents specified in the collection order have been received, or if the documents fail to comply with the collection order, the collecting bank or the submitting bank shall immediately notify to that effect the party from whom the collection order was received. If the deficiencies reported by the bank are not eliminated or adjusted instructions are not received, the bank shall be entitled to return the documents and refuse to execute the order.


2. The documents shall be submitted to the payer in the form in which they were received, except the bank markings and records which are necessary for the performance of the collection operation. 


3. If the documents are to be paid upon their submission, the collecting bank must submit them for payment immediately after it receives the collection order.


4. If the documents are to be paid within a certain period of time, the collecting bank must submit the documents for the payer’s acceptance immediately after it receives the collection order, and must state its request for payment not later than within the payment time limit specified in the document.


5. Partial payments may be accepted only in the cases provided for by laws or the collection order.


6. The collecting bank must immediately transfer the received (collected) amounts to the instructing bank which shall credit them to the client’s account. The collecting bank shall be entitled to deduct from


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amounts to the instructing bank which shall credit them to the client’s account. The collecting bank shall be entitled to deduct from the collected amounts the fee due to such bank and the incurred expenses.


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Article 6.944. Notification on operations performed


1. Where the collecting bank does not receive the payment and/or the acceptance, it must immediately notify to that effect the instructing bank and specify the reasons for which the payment has not been received or its acceptance has been refused.


2. The instructing bank must immediately communicate the information received from the collecting bank to the client and request his instructions on further actions.


3. Having received no instructions from the instructing bank within the time limit set forth in the operational rules of the bank or the agreement or within a reasonable time, where such time limit is not set forth, the collecting bank shall be entitled to return all the documents to the instructing bank.

 


CHAPTER XLVIII

PUBLIC PROMISE OF REWARD


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1. A person who has publicly promised to pay reward to a person who will perform a lawful action indicated in the announcement within the time limit specified in the announcement (find a lost thing, etc.), must pay the promised reward to any person who has performed the said action.


2. The obligation to pay reward shall be subject to the condition that the content of the public promise makes it possible to identify the person who makes such promise. The person who has responded to the public promise shall be entitled to request the promise to be confirmed in writing. If the person has not exercised such right, he shall bear the risk of adverse consequences if it subsequently transpires that the person who promised the reward was not the one indicated in the public announcement.


3. If the amount of reward is not specified in the public announcement, such amount shall be fixed by agreement of the parties, and in case of failure to reach such agreement, by a court judgment.


4. The obligation to pay reward shall arise notwithstanding whether the person who performed the action specified in the announcement did so due to the public promise of reward or not.


5. If the action specified in the announcement was performed by several persons, the right to reward shall be vested in the person who was the first to perform such action. When it is impossible to establish which person was the first to perform such action, or when several persons performed such action together, the reward shall be paid to such persons in equal


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establish which person was the first to perform such action, or when several persons performed such action together, the reward shall be paid to such persons in equal parts, unless they agree otherwise.


6. The compliance of the action performed with the conditions indicated in the announcement shall be determined by the person who publicly promised the reward unless otherwise established in the announcement. In case of a dispute between the persons, the dispute shall be resolved in court.


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Article 6.946. Revocation of the public promise to pay reward


1. The person who has publicly promised to pay reward shall be entitled to revoke it in the same way as it was made, except for the cases when:


1) the announcement itself contained the statement that it is irrevocable;


2) the promise is irrevocable in its essence;


3) a certain time limit has been set for the performance of the action indicated in the announcement;


4) one or several persons have already performed the action indicated in the announcement prior to its revocation.


2. The revocation of the public promise to pay reward shall not release the person who has announced such promise from the obligation to compensate for the damage incurred by the persons in preparation to perform the action indicated in the announcement. However, the amount of damages to be compensated may not exceed the amount of the promised reward.

 


CHAPTER XLIX

PUBLIC TENDER


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1. A public promise of a person to pay a specific remuneration (award) for the best performance of a certain work or any other result (the announcement of a tender) shall obligate such person to pay the promised remuneration to the person whose work or any other result, according to the conditions of the tender, is recognised as the winner of the tender. A public promise of a person to grant a special right for the best project of the implementation of a certain right shall also be deemed a tender. Such public promise shall obligate the person to grant the special right to the person whose project, according to the conditions of the tender, is recognised as the winner of the tender.


2. The announced tender must specify the task, the term for the fulfilment of the task, the amount of remuneration (award) or the special right to be granted, the place of presentation of works or projects, the procedure and time of evaluation thereof, as well as any other conditions of the tender.


3. A public tender may be announced only in order to achieve a certain public or private goal, without prejudice to good morals or public order.


4. A public tender may be open, when the tender organiser’s offer to participate in such tender is addressed to all who wish to participate therein and is published in the press or other media, or closed, when the offer to participate in the tender is sent only to


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who wish to participate therein and is published in the press or other media, or closed, when the offer to participate in the tender is sent only to certain persons at the discretion of the organiser of the tender.


5. The conditions of an open public tender may establish certain qualification requirements for tenderers if the organiser of the tender makes a preliminary selection of the persons who express their wish to participate in the tender.


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Article 6.948. Change of tender conditions or revocation of the tender


1. It shall be permitted to change tender conditions or revoke the tender only in the first half of the term set for the delivery of works.


2. Notification on the change of tender conditions must be given to the tenderers in accordance with the same procedure as the announcement of the tender.


3. Upon the change of tender conditions or revocation of the tender, the organiser of the tender must compensate the expenses incurred by each person who had performed the work stipulated in the tender conditions prior to the moment when he learnt or ought to have learnt about the change of the tender conditions or revocation of the tender.


4. The organiser of the tender shall be exempt from the compensation of the expenses stipulated in paragraph 3 of this Article if he proves that the work performed was not related to the tender (prior to the announcement of the tender) or does not conform to the tender conditions.


5. Where the change of tender conditions or revocation of the tender is in breach of the requirements set forth in paragraphs 1 and 2 of this Article, the organiser of the tender must pay the remuneration to the person who performed the work conforming to the tender conditions.


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Article 6.949. Decision to pay remuneration (award) or grant a special right


1. The decision to pay remuneration (award) or grant a special right must be adopted and communicated to the tenderers while announcing the established terms and procedure of the tender.


2. If two or more persons (co-authors, collective of performers) are recognised as the winner of the tender, the remuneration to them shall be apportioned in accordance with the procedure established by agreement of such persons, and in case of a dispute among them, the remuneration shall be apportioned by the court based on the contribution of each of such persons.


3. If one award is allotted for two or more persons, it shall be apportioned in accordance with the procedure established in the rules of the tender, and if the rules of the tender do not provide for such procedure, in equal parts unless otherwise agreed by the winners themselves.


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Article 6.950. Use of works of science, literature, art and architecture awarded under a tender

If the subject matter of a public tender was the creation of a work of science, literature, art or architecture, the person who has announced the public tender shall acquire the priority right to enter with the winner of the tender into an agreement on the use of the created work and payment of the relevant remuneration to the author of the work, unless the tender conditions provide otherwise.

 


Article 6.951. Return of works or projects presented for tender to the tenderers

The person who has announced the public tender must return to the tenderers the works or projects for which no remuneration (award) is assigned or no right is granted, unless otherwise established while announcing the tender.

 


Article 6.952. Indemnification of tenderers in case of non-observance of the rules of the tender by the person who has announced the tender


1. If the person who has announced the tender does not observe the announced procedure or terms for the evaluation of the works or projects, the author of the presented work or project which complies with other requirements of the tender shall acquire the right to receive compensation for the damage incurred.


2. If the winner of the tender is not granted a special right(s), he must be compensated for damages.


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CHAPTER L

TRUST OF PROPERTY

 


Article 6.953. Concept of a property trust agreement


1. Under a property trust agreement, one party (the trustor) shall assign to the other party (the trustee) its property by the right of trust for a certain period of time, and the other party shall undertake to possess, use and dispose of such property in the interests of the trustor or his designated person (the beneficiary).


2. The assignment of property to any other person by the right of trust shall not change the ownership right to the property.  The trustor shall remain the owner of the assigned property.

 


Article 6.954. Content of the right of trust of property


1. The content of the right of trust of property shall be established in Article 4.106 of this Code.


2. The law or agreement may impose limitations on the rights of the trustee to possess, use or dispose of the property.


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Article 6.955. Conclusion of transactions


1. The trustee shall conclude, in his own name, the transactions related to the property assigned to him by the right of trust, but he must indicate that he is acting by the right of trust of property.  The fact of the right of trust must be disclosed in the form established for the transaction to be concluded.


2. If the trustee fails to perform the obligation referred to in paragraph 1 of this Article, he shall be liable towards third persons by his property.

 


Article 6.956. Objects of the right of trust


1. The objects of the right of trust may be movable and immovable things, securities or any other property.


2. The state or municipal property which is possessed, used or disposed of by a state or municipal enterprise, institution or organisation by the right of trust may not be assigned to any other person by the right of trust, except for the cases when such enterprise, institution or organisation is liquidated or reorganised, as well as other cases provided for by law.

 


Article 6.957. Founder of the right of trust (trustor)

The founder of the right of trust (trustor) may be the owner of the property or any other person established by law who is vested with such right.


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Article 6.958. Trustee


1. The trustee may be a natural or legal person.  


2. The law may specify the persons who are not entitled to be trustees.


3. The trustee may not be the sole beneficiary under a property trust agreement.

 


Article 6.959. Essential conditions of a property trust agreement


1. A property trust agreement must specify the following:


1) the property assigned by the right of trust;


2) the trustor, the trustee and, if the agreement is made for the benefit of a third person (the beneficiary), the beneficiary;


3) the remuneration of the trustee and the procedure for its payment if the remuneration is set fort in the agreement;


4) the validity term of the agreement.


2. A property trust agreement may be concluded for the term not exceeding twenty years.  The law may also establish longer maximum terms for the validity of the agreement.


3. If, upon the expiration of the validity term of the agreement, neither party states its wish to terminate the agreement, the agreement shall be deemed extended under the same conditions for a new term of the same duration.


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Article 6.960. Form of a property trust agreement


1. A property trust agreement must be made in writing.


2. The immovable property trust agreement must be in the notarial form. It may be used against third persons only after it has been registered in the public register in accordance with the procedure prescribed by laws.   


3. Failure to comply with the requirements set in respect of the form of the agreement shall render the trust agreement null and void.

 


Article 6.961. Separation of property


1. The property assigned to the trustee by the right of trust must be separated from the property of the trustor and the trustee. The trustee must draw up and keep the accounting (the balance-sheet) of the property assigned to him and must open a separate bank account for settlements.


2. It shall be prohibited to recover from the property assigned by the right of trust subject to the actions brought by the creditors of the trustor, except for the cases when bankruptcy proceedings are instituted against the trustor or the trustor becomes insolvent. Upon the institution of bankruptcy proceedings against the trustor or his becoming insolvent, the right of trust of property shall expire and the property must be returned to the trustor.


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Article 6.962. Assignment of the mortgaged (pledged) property by the right of trust


1. The assignment of the mortgaged (pledged) property to any other person by the right of trust shall not deprive the mortgagee (pledgee) of the right to recover from such property.


2. The trustee must be informed that the property assigned to him is mortgaged (pledged). If the trustee was not aware or could not have been aware of the mortgage (pledge) of the property, he shall be entitled to demand the termination of the property trust agreement and the payment of remuneration due to him and compensation for the loss.


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Article 6.963. Rights and duties of the trustee


1. The trustee, complying with the law and agreement, shall exercise the owner’s rights in respect of the property assigned to him by the right of trust.


2. All the rights acquired by the trustee in exercising the owner’s rights shall be an integral part of the property assigned to him. The obligations arising in the course of the activities carried out by the trustee shall be fulfilled using the property assigned to him.


3. The trustee shall be entitled to protect the right of trust in the same ways that are used to protect the right of possession and ownership.


4. The trustee must submit a report on his activities to the trustor and the beneficiary in accordance with the procedure and time limit established in the agreement. If the time limit for the submission of the report is not provided, the report must be submitted once a year.  The owner shall have the right to control the trustee’s activities at any time.


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Article 6.964. Duty to perform the agreement personally


1. The trustee must personally possess, use and dispose of the property assigned to him, to the exclusion of exceptions established in paragraph 2 of this Article.


2. The trustee shall be entitled to authorise any other person to perform certain actions required in respect of possession of the property provided that this is stipulated in the agreement or a prior written consent to that effect has been received from the trustor, or if it is necessary in order to protect the interests of the trustor or the beneficiary and it was not possible to receive the consent from the trustor within a reasonable time.


3. The trustee shall be liable for the actions of the person authorised by him to perform such actions, as if it were the actions of the trustee himself.


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Article 6.965. Trustee’s liability


1. The trustee who has failed to take due care of the property assigned to him and the interests of the trustor and the beneficiary must indemnify the beneficiary or the trustor for the damage incurred due to the loss or damage of the property, as well as the loss of income.


2. The trustee shall be exempted from compensation for the damage if he proves that the loss has been incurred due to force majeure or the actions of the trustor or the beneficiary.


3. Where the trustee enters into a transaction in excess of the powers granted to him or in violation of limitations established in the agreement, he shall be personally liable under such transaction. If third persons were not aware and could not have been aware of the excess of powers or violation of limitations, this shall result in the legal consequences set forth in paragraph 4 of this Article. In such case, the trustor shall be entitled to claim from the trustee compensation for damage.


4. The debts under obligations which accrued during possession, use and disposal of property by the right of trust shall be covered from the entrusted property. If such property is not sufficient, the recovery shall be made from the trustee’s property, and, when the latter property is not sufficient, from any other property of the trustor.


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Article 6.966. Remuneration for the trustee

The trustee shall be entitled to the remuneration set in the agreement and reimbursement of the necessary expenses from the proceeds from the property assigned to him, unless otherwise established in the agreement.


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Article 6.967. Expiration of the property trust agreement


1. The property trust agreement shall expire in the following cases:


1) when the beneficiary dies or is liquidated, unless otherwise established in the agreement;


2) when the beneficiary waives the benefit received under the agreement, unless otherwise established in the agreement;


3) when the trustee dies, is recognised legally incapable in this area or of limited legal capacity in this area, missing, or is liquidated;


4) when bankruptcy proceedings are instituted against the trustor;


5) when the trustor or the trustee waives the agreement because the trustee is not in a position to perform the agreement personally;


6) when the trustor waives the agreement on any other grounds and pays the trustee the remuneration established in the agreement and compensates the necessary expenses incurred by virtue of termination of the agreement.


2. Any party that wishes to waive the agreement must give the other party a six-month prior written notice to that effect, unless the agreement establishes any other time limit.


3. Upon the expiration of the property trust agreement, the trustee must return the property to the trustor, unless otherwise established in the agreement.


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Article 6.968. Peculiarities of the right of trust of property

Laws may establish certain peculiarities of the right of trust of property when the trustee is a state or municipal enterprise, institution or organisation, also when the right of trust of property arises on grounds other than under the agreement.

 


CHAPTER LI

JOINT ACTIVITIES (PARTNERSHIP)

 


Article 6.969. Concept of an agreement on joint activities (partnership)


1. By an agreement on joint activities (partnership), two or more persons (the partners), by cooperating their property, work or knowledge, shall undertake to act jointly for a certain goal or certain activities which do not contravene the law.


2. No longer effective from 1 September 2012.


3. Where the goal of joint activities is not related to the seeking of profit, the agreement on joint activities shall be referred to as the association agreement.


4. An agreement on joint activities (partnership) must be made in writing and, in the cases prescribed by the law, in the notarial form. Failure to comply with the requirements set in respect of the form of the agreement shall render the agreement null and void.


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Article 6.970. Contributions of the partners


1. A contribution of a partner shall be deemed everything such partner contributes to the joint activities, i.e. money, any other assets, professional or any other knowledge, skills, reputation and business relations.


2. It shall be presumed that the contributions of the partners are equal unless otherwise established in the agreement on joint activities.  The contribution shall be valued in cash by agreement of all partners.


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Article 6.971. Co-ownership of the partners


1. The property contributed by the partners, which was previously in their ownership, as well as the production, income and fruits resulting from joint activities, shall be partial co-ownership of all the partners, unless otherwise established by law or the agreement on joint activities.


2. If the contributed property previously was not the ownership of a partner, and the partner uses such property on any other grounds, this property shall be used in the interests of all the partners and shall also be deemed the property which is jointly used by all the partners, unless otherwise established by the law. 


3. One of the partners appointed by joint agreement of all the partners shall be in charge of the accounting of the joint property.


4. The joint property shall be used, possessed and disposed of by joint agreement of all the partners. In case of a dispute, at the request of any of the partners, the procedure shall be established by the court.


5. The obligations of the partners related to the maintenance of the joint property, and the coverage of any other expenses, shall be established in the agreement on joint activities.


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1. In managing joint affairs, each of the partners shall be entitled to act on behalf of all the partners, unless the agreement on joint activities provides that joint affairs are managed by one of the partners or all the partners together. If the affairs can be managed only by all the partners together, the conclusion of each transaction shall require the approval by all the partners.


2. In case of relations with the third persons, the right of a partner to conclude transactions on behalf of all the partners shall be approved by the power of attorney issued by the remaining partners or the agreement on joint activities.


3. In case of relations with the third persons, the partners may not rely on limitations of the rights of the partner who has concluded the transaction to act on behalf of all the partners, except for the cases where they prove that, at the time of conclusion of the transaction, the third person knew or ought to have known about such limitations.


4. A partner who has concluded the transaction on behalf of all the partners in excess of the powers granted to him, or who has concluded the transaction in his own name in the interests of all the partners, shall be entitled to claim from the other partners the indemnification of the loss incurred if he proves that such transactions were necessary in order to protect the interests of the other partners. The partners who have incurred damage by virtue of such transactions shall be entitled to claim from the partner who has concluded such transactions compensation for such


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other partners. The partners who have incurred damage by virtue of such transactions shall be entitled to claim from the partner who has concluded such transactions compensation for such damage.


5. The decisions related to joint affairs of the partners shall be adopted by joint agreement of the partners, unless otherwise established in the agreement on joint activities.


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Article 6.973. Right of the partners to information

Each partner shall be entitled to have access to the documents concerning the management of joint affairs, notwithstanding whether or not he is authorised to manage the joint affairs. Any agreements imposing limitations on, or cancelling, the above-mentioned right shall be null and void.

 


Article 6.974. Joint expenses and joint damages 


1. The distribution of joint expenses and joint damages related to the joint activities shall be established in the agreement on joint activities. In the absence of such agreement, each partner shall be liable for the joint expenses and joint damages in proportion to the amount of his part of such expenses or damages.


2. The agreement which fully releases one of the partners from the coverage of the joint expenses or joint loss shall be null and void.


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Article 6.975. Liability of partners under joint obligations


1. If the agreement on joint activities is not related to the economic and commercial activities of the partners, each partner shall be liable under joint contractual obligations to the extent of all his property in proportion to his part of such obligations.


2. Under the joint non-contractual obligations, the partners shall be solidarily liable.


3. If the agreement on joint activities is related to the economic and commercial activities of the partners, all the partners shall be solidarily liable under the joint obligations, notwithstanding the ground for appearance of such obligations.

 


Article 6.976. Distribution of profit


1. The profit, obtained from the joint activities shall be distributed among the partners in proportion to the value of the contribution of each of them into the joint activities, unless otherwise established in the agreement on joint activities.


2. The agreement to exclude any of the partners while distributing the profit shall be null and void.

 


Article 6.977. Separation of the interest of a partner

The creditors of a partner shall be entitled to claim the separation of the partner’s interest from the joint property pursuant to the rules established in Book Four of this Code.


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Article 6.978. Expiry of the agreement on joint activities


1. The agreement on joint activities shall expire:


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1) when one of the partners is recognised as legally incapable, of limited legal capacity or missing, unless the agreement on joint activities or later arrangement of the remaining partners establishes to retain the agreement on joint activities among the remaining partners, except for the cases when the agreement on joint activities is valid without the above mentioned partner;


2) when bankruptcy proceedings are instituted against one of the partners, to the exclusion of exceptions established in point 1 of this paragraph;


3) in case of death or liquidation or reorganisation of one of the partners, unless the agreement on joint activities or later arrangement of the remaining partners establishes to retain the agreement on joint activities among the remaining partners or substitute the deceased or liquidated or reorganised partner with his legal successors;


4) when one of the partners refuses to continue as a participant of the open-ended agreement on joint activities, to the exclusion of exceptions established in point 1 of this paragraph;


5) when the fixed-term agreement on joint activities is terminated at the request of one of the partners, to the exclusion of exceptions established in point 1 of this paragraph;


6) upon the expiry of the term of the agreement on joint activities;


7) upon separation of the interest of one of the partners from the joint property at the request of his creditors, to the exclusion of exceptions established in point 1 of this paragraph;


2. Upon the expiry of the agreement on joint activities,


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creditors, to the exclusion of exceptions established in point 1 of this paragraph;


2. Upon the expiry of the agreement on joint activities, the things assigned for the joint use by all the partners shall be gratuitously returned to the partners who have assigned them, unless otherwise agreed by the parties.


3. From the moment of expiry of the agreement on joint activities, its participants shall be solidarily liable towards the third persons for the outstanding joint obligations.


4. The property which is the joint ownership of the partners after the expiry of the agreement on joint activities shall be distributed in accordance with the rules established in Book Four of this Code.


5. The partner who has contributed a distinctive thing shall be entitled to demand, after the expiry of the agreement on joint activities, to return him the thing unless the interests of other partners and creditors are infringed by such return.


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Article 6.979. Waiver of the open-ended agreement on joint activities


1. The partner who wishes to withdraw from the open-ended agreement on joint activities must notify to that effect the other partners at least three months prior to the intended withdrawal, unless otherwise established by laws or the agreement.


2. Agreements imposing the limitations on the right of the partners to waive the open-ended agreement on joint activities or cancelling such right shall be null and void.

 


Article 6.980. Termination of the agreement on joint activities at the request of one of the partners


1. One of the partners shall be entitled to terminate the agreement concluded with other partners, which is fixed-term or made for a certain goal, if:


1) other partners are in material breach under such agreement;


2) the partner who wishes to terminate the agreement is no longer able to perform the agreement for important reasons.


2. The partner who has terminated the agreement must indemnify the other partners for the direct damages incurred by virtue of such termination.


3. Upon the termination of the agreement by one of the partners, the agreement shall remain in force in respect of the other partners, to the exclusion of the exceptions established in point 1 of paragraph 1 of Article 6.978 of this Code.


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Article 6.981. Liability of the partner who has terminated the agreement on joint activities

If the agreement on joint activities is terminated upon refusal of one of the partners to be a participant of the agreement, or at the request of one of the partners, the person who is no longer a participant of the agreement on joint activities shall be liable to third persons under the obligations which appeared while he was a participant of the agreement on joint activities as if he were a partner.

 


Article 6.982. Undeclared partnership


1. The agreement on joint activities may stipulate that a partner(s) may not be avowed to third persons (undeclared partnership). Such agreement shall be governed by the rules of this Chapter, to the exclusion of the exceptions established in the agreement and this Article.


2. In case of relations with the third persons, each of the undeclared partners shall be liable to the extent of all his property under all the transactions he has concluded in his own name in the interests of all the partners.


3. All the obligations arising among the partners during their joint activities shall be partial.

 


CHAPTER LII

PEACEFUL SETTLEMENT AGREEMENT


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CHAPTER LII

PEACEFUL SETTLEMENT AGREEMENT

 


Article 6.983. Concept of a peaceful settlement agreement


1. By a peaceful settlement agreement, the parties shall resolve, by means of mutual concessions, an existing judicial dispute, preclude a judicial dispute in the future, resolve an issue of enforcement of the court judgment or any other disputed issues.


2. The obligation of the parties arising from the peaceful settlement agreement in respect of its subject matter shall be deemed indivisible.


3. The peaceful settlement agreement must be made in writing. Failure to comply with this requirement shall render the agreement null and void.

 


Article 6.984. Cases when the peaceful settlement agreement is invalid

The peaceful settlement agreement regarding the legal status or legal capacity of persons, regarding the matters regulated by the mandatory rules of law, as well as regarding the matters related to public order, shall be invalid.

 


Article 6.985. Effect of the peaceful settlement agreement


1. The peaceful settlement agreement, upon approval by the court, shall have the effect of the final judgment (res judicata) on its parties.


2. The peaceful settlement agreement, upon approval by the court, shall be an enforceable document.


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Article 6.986. Recognition of the peaceful settlement agreement as void


1. The peaceful settlement agreement may be recognised as null and void due to essential inequality of its parties (Article 6.228 of this Code), as well as on other grounds of invalidity of transactions.


2. If the peaceful settlement agreement is made based on the transaction which was not in force at the time of making of the peaceful settlement agreement, such peaceful settlement agreement shall be null and void.


3. If the peaceful settlement agreement is made based on written documents which later appear as counterfeit, such peaceful settlement agreement shall be null and void.


4. The peaceful settlement agreement shall be null and void if, at the moment of making of the peaceful settlement agreement, one or both parties did not know that the issue, which is the subject matter of the peaceful settlement agreement, had already been resolved by a final court judgment.


5. The peaceful settlement agreement shall be null and void if, after its conclusion, documents emerge confirming that one of the parties to the peaceful settlement agreement is not or was not entitled to what it has been granted by the peaceful settlement agreement.


6. The error of the parties in respect of the rules of law, except for the mandatory rules of law, shall not be the ground for recognising the peaceful settlement agreement as void.

 


CHAPTER LIII

INSURANCE


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CHAPTER LIII

INSURANCE

 


Article 6.987. Concept of an insurance agreement

Under an insurance agreement, one party (the insurer) shall undertake to pay, subject to the insurance contribution (premium) established in the agreement, to the other party (the policyholder) or the third person for whose benefit the agreement has been made, the insurance benefit established in the insurance agreement to be calculated in accordance with the procedure prescribed in the insurance agreement, if an insured event set forth in the law or the insurance agreement occurs.

 


Article 6.988. Forms and branches of insurance


1. Insurance may be compulsory and voluntary.


2. The branches of insurance shall be life and non-life insurance.


3. The types and conditions of compulsory insurance as well as the branches of insurance and the interests of insurance shall be governed by other laws.


4. Only the interests protected by laws may be insured.

 


Article 6.989. Form of an insurance agreement


1. The insurance agreement must be made in writing.


2. The insurance agreement shall be approved by the insurance certificate (policy).


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Article 6.990. Procedure for conclusion of an insurance agreement


1. The insurance agreement shall be concluded when the insurer accepts the proposal (application) of the policyholder submitted to the insurer, or when the policyholder accepts the insurer’s proposal to enter into the agreement. In the cases determined by the rules of the type of insurance, the application of the policyholder must be made in writing. In such case, the form and content of the written application shall be determined by the insurer.


2. The policyholder shall be liable for the accuracy of the data submitted in the proposal (application). Upon the conclusion of the insurance agreement, the written application by the policyholder shall become an integral part of the insurance agreement.


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Article 6.991. Insurance certificate (policy)


1. The insurance certificate (policy) must contain the following:


1) the number of the insurance certificate (policy);


2) the name of the insurer, the address of its registered office and e-delivery box;


3) the name, surname or title of the policyholder, the insured person or the beneficiary;


4) the group of insurance and the name and number of the rules of a certain type of insurance;


5) the object of insurance;


6) the sum insured, except for the cases when the specific sum insured is not established;


7) the insurance premium and the terms for its payment;


8) the type of insurance;


9) the validity term of the insurance agreement;


10) the record that the policyholder has been informed of the rules of the type of insurance and has received a copy thereof;


11) the signature of the person authorised by the insurer to conclude the insurance agreement and the stamp of the insurer when the incorporation documents of the insurer establish the ensurer’s obligation to hold a stamp, or facsimiles thereof;


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12) the date of issue of the insurance certificate (policy).


2. The procedure for the registration and protection of the insurance certificates (policies) shall be established by laws.


3. If the insurance certificate (policy) fails to conform to the content of the written application by the policyholder, and the agreement was made by accepting the application of the policyholder to enter into such agreement, the written application of the policyholder shall prevail.


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Article 6.992. Conclusion of the insurance agreement according to standard conditions


1. If the insurance agreement is concluded according to the rules of the type of insurance drafted in the procedure prescribed by laws, the insurance agreement shall accordingly be governed by Articles 6.185 to 6.187 of this Code.


2. The insurer must provide public access to the rules of the type of insurance and, prior to the conclusion of the insurance agreement, provide the policyholder with their copies.


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1. Prior to the conclusion of the insurance agreement, the policyholder must provide to the insurer all the available information about the circumstances which can have material effect on the probability of occurrence of the insured event and the amount of potential loss in respect of such event (insurance risk), if the insurer does not know and should not know of such circumstances. 


2. Material circumstances about which the policyholder must inform the insurer shall be deemed the circumstances indicated in the standard conditions of the insurance agreement (rules of the type of insurance), as well as the circumstances on which the insurer has requested the policyholder in writing to provide information.


3. If the policyholder fails to provide a reply to the written inquiry by the insurer about certain circumstances, and the insurer, notwithstanding this fact, has entered into the insurance agreement, the insurer shall lose the right to claim the termination of the insurance agreement or recognise it as null and void on the basis of the failure by the policyholder to provide the information.


4. If, after the conclusion of the insurance agreement, it is established that the policyholder has furnished to the insurer knowingly misleading information about the circumstances stipulated in paragraph 1 of this Article, the insurer shall be entitled to request that the insurance agreement be declared null and void, except for the cases when the circumstances which have been concealed by the policyholder disappeared prior to the insured event or had no effect on the insured event.


5. If, after the


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have been concealed by the policyholder disappeared prior to the insured event or had no effect on the insured event.


5. If, after the conclusion of the insurance agreement, it is established that the policyholder has failed, through negligence, to submit the information stipulated in paragraph 1 of this Article, the insurer must, not later than within two months from becoming aware of such circumstances, propose to the policyholder to change the insurance agreement. If the policyholder refuses to do so and does not respond to the submitted proposal within one month (and, in the case of life insurance, within two months), the insurer shall be entitled to request termination of the insurance agreement.


6. If the policyholder has failed, through negligence, to provide the information stipulated in paragraph 1 of this Article, the insurer, upon the occurrence of the insured event, must pay a part of the insurance benefit to be paid to the policyholder subject to the fulfilment of the obligation provided for in paragraph 1 of this Article, proportionate to the ratio between the agreed insurance premium and the insurance premium which would have been established for the policyholder if the latter had fulfilled the obligation stipulated in paragraph 1 of this Article.


7. If the insurer, being aware of the circumstances which have not been reported by the policyholder through negligence, had not concluded the insurance agreement, the insurer, within two months from his becoming aware that the policyholder has not submitted, through negligence, the information


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had not concluded the insurance agreement, the insurer, within two months from his becoming aware that the policyholder has not submitted, through negligence, the information stipulated in paragraph 1 of this Article, shall be entitled to request termination of the insurance agreement.  Upon the occurrence of the insured event, the insurer shall be entitled to refuse to pay the insurance benefit only if he proves that no insurer, being aware of the circumstances which have not been indicated by the policyholder through negligence, would have concluded the insurance agreement.


8. During the conclusion and within the validity term of the insurance agreement, the insurer must provide the policyholder with the following information: the name of the insurer, the type of the insurance company, its address and e-delivery box address, the address of the insurer’s division or the insurer’s representative (if the insurance agreement is concluded in any other place than the insurer’s registered office), the procedure for settlement of disputes arising from or related to the insurance agreement, the response of the insurer when the policyholder breaches the conditions of the insurance agreement, possible cases of increase of insurance risk, as well as other information referred to in the legal acts regulating insurance activities.


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Article 6.994. Right of the insurer to assess the insurance risk


1. Prior to the conclusion of the insurance agreement, the insurer shall be entitled to inspect the property to be insured, and, if necessary, to order, at his own expense, an expert examination for determination of its value.


2. If the insurance interest is related to the life and health of a natural person, the insurer shall be entitled to demand from the policyholder documents confirming the age, state of health, and profession of the policyholder/insured person and other circumstances relevant for the insurance risk.

 


Article 6.995. Confidentiality of information

The insurer shall have no right to disclose information, obtained in the course of his insurance activities, about the policyholder, the insured person or the beneficiary, their health and property status, as well as other confidential information established in the insurance agreement, to the exclusion of exceptions stipulated by laws. The insurer, having breached such obligation, must indemnify the policyholder, the insured person or the beneficiary for the pecuniary and non-pecuniary damage.


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Article 6.996. Entry into force of the insurance agreement


1. The insurance agreement, unless it provides otherwise, shall enter into force from the moment of payment by the policyholder of the full insurance contribution (premium) or the first instalment thereof.


2. If the policyholder fails to pay the insurance contribution (premium) stipulated in paragraph 1 of this Article, the insurance agreement shall terminate, unless otherwise established in the agreement.


3. Insurance shall apply to all insured events occurring after the entry into force of the insurance agreement, unless otherwise established in the agreement. If the insurance agreement establishes the application of insurance also to the insured events which occurred prior to the entry into force of the insurance agreement, such condition shall be valid if the parties to the insurance agreement were not aware of the insured event which occurred prior to the entry into force of the insurance agreement.

 


Article 6.997. Sum insured


1. The amount of insurance of property interests and the amount of the insurance benefit (the sum ensured) the insurer undertakes to pay shall be established by agreement of the parties to the insurance agreement or by the law.


2. In case of non-life insurance, to the exclusion of exceptions provided for by laws, the sum insured may not exceed the actual value of the property insured or the property risk (the value of insurance).


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Article 6.998. Contesting the sum insured

The sum insured indicated in the insurance agreement may not be contested after the conclusion of the agreement, except for the cases when the insurer, having failed to exercise his right to assess the risk of insurance, was defrauded due to indication of the knowingly misleading value of insurance or an arithmetic or spelling mistake.

 


Article 6.999. Partial insurance


1. Where the sum insured established in the non-life insurance agreement, except for cases provided for by laws, is lower than the value of insurance, upon the occurrence of the insured event, the insurer must indemnify the policyholder (beneficiary) a part of the damages incurred, proportionate to the ratio between the sum insured and the value of insurance.


2. The insurance agreement may also provide for a higher insurance benefit, but not exceeding the value of insurance.

 


Article 6.1000. Additional insurance

If only a portion of the value of property or risk (insurance) is insured in the non-life insurance agreement, except for cases stipulated by laws, the policyholder (beneficiary) shall be entitled to additionally insure them by entering into an additional insurance agreement with the same or any other insurer. However, in such cases, the total sum insured under all insurance agreements may not exceed the value of insurance.


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Article 6.1001. Legal consequences of the insurance which exceeds the value of insurance


1. If the sum insured, specified in the insurance agreement, exceeds the value of insurance, the insurance agreement shall be null and void in respect of the portion of the sum insured which exceeds the value of insurance. However, the paid insurance benefit which exceeds the value of insurance may not be recovered.


2. If the insurance contributions (premiums) are paid periodically and, upon the establishment of the circumstances stipulated in paragraph 1 of this Article, the insurance contribution (premium) has not been fully paid, the remaining payable amount of the insurance contribution (premium) shall be reduced in proportion to the amount of the reduction of the sum insured.


3. If the sum insured is increased due to fraud on the part of the policyholder, the insurer shall be entitled to request that the insurance agreement be declared null and void and to claim compensation for the loss incurred to the extent such loss is not covered by the received insurance contribution (premium).


4. The rules of this Article shall also apply in the cases when the sum insured exceeds the value of the insurance for the same object under several insurance agreements with different insurers (double insurance). In such case, the insurance benefit to be paid by each of the insurers shall be reduced in proportion to the reduction of the sum insured under an appropriate insurance agreement.


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Article 6.1002. Insurance against various risks


1. The object of insurance may be insured against different risks by concluding one or several insurance agreements with the same or different insurers. In such case, the total sum insured under all insurance agreements shall be permitted to exceed the value of insurance.


2. If the obligation of the insurers to pay the insurance benefit for the same consequences of the same insured event is stipulated under several insurance agreements made pursuant to paragraph 1 of this Article, the consequences set forth in Article 6.1001 of this Code shall arise.

 


Article 6.1003. Co-insurance

The object of insurance may be insured under one insurance agreement jointly by several insurers (the co-insurance). Unless the insurance agreement provides for the rights and obligations of each of the insurers, all the insurers shall be jointly and severally liable towards the policyholder (beneficiary) for the payment of the insurance benefit.


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Article 6.1004. Insurance contribution (premium)


1. The policyholder (beneficiary) must pay for the insurance protection to the insurer, subject to the terms set forth in the agreement or law, the established amount or amounts of money (the insurance contribution (premium)).  


2. The insurance agreement may establish that the insurance contribution (premium) is to be paid at once or periodically within the time limits stipulated in the agreement. Where the insurance contribution (premium) is paid periodically, the insurance agreement may provide for legal consequences of the failure to make a regular contribution within the established time limit.


3. If the insured event occurs prior to the payment of the insurance contribution (premium) which is due, the insurer shall be entitled to set off the outstanding amount against the insurance benefit.

 


Article 6.1005. Substitution of the insured person

The policyholder shall be entitled to substitute the insured person with any other person only upon receipt of the written consent of the insurer, unless otherwise established in the insurance agreement.


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Article 6.1006. Substitution of the beneficiary


1. The policyholder shall be entitled to substitute the beneficiary indicated in the insurance agreement with any other person, to the exclusion of the exceptions stipulated in laws or the agreement, upon prior written notification to the insurer.


2. If the beneficiary has been appointed upon the consent of the insured person, the beneficiary may be substituted only upon the consent of the insured person.


3. The beneficiary may not be substituted with any other person if he has fulfilled any obligations under the insurance agreement or has made a claim against the insurer to pay the insurance benefit.

 


Article 6.1007. Performance of the insurance agreement where there are both the policyholder and the beneficiary


1. If the insurance agreement is concluded for the benefit of a third person (the beneficiary), the liability towards the insurer for the performance of the agreement shall lie with the policyholder, unless otherwise established in the insurance agreement.


2. The insurer shall be entitled to request that the insurance agreement be performed by the beneficiary if the policyholder has not performed the agreement and the beneficiary makes a claim against the insurer for payment of the insurance benefit.


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Article 6.1008. Substitution of the insurer


1. The insurer shall be entitled to assign its rights and obligations under the insurance agreement to any other insurer or insurers in accordance with the procedure prescribed by the insurance agreement, upon the receipt of the permission from the relevant state institution which exercises the supervision of insurance.


2. The insurer must give a two-month prior notification to the policyholder about its intention to assign its rights and duties, unless a longer term is provided for in the insurance agreement.


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Article 6.1009. Termination of the insurance agreement before the expiry of the term


1. The insurance agreement may be terminated before the expiry of the term established therein if, after the entry into force of the agreement, the possibility for occurrence of the insured event or the insurance risk disappeared due to the circumstances which are not related to the insured event (the object of insurance perished for reasons not related to the insured event, etc.).


2. The policyholder shall be entitled to terminate the insurance agreement in any case.


3. If the insurance agreement is terminated on the grounds established in paragraph 1 of this Article, the insurer shall be entitled to the part of the insurance contribution (premium) which is proportionate to the validity term of the insurance agreement.


4. If the policyholder terminates the insurance agreement before the expiry of the term, the insurance contribution (premium) paid to the insurer shall not be refunded, unless otherwise established in the insurance agreement.


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1. If, during the validity term of the insurance agreement, there is a material change in the circumstances stipulated in the insurance agreement, which increases or is likely to increase the insurance risk, the policyholder must notify the insurer to that effect immediately upon learning about such changes.


2. The insurer which has been notified about the increase of the insurance risk shall be entitled to request the change of the conditions of the insurance agreement or increase the insurance contribution (premium). If, in such case, the policyholder does not agree to change the conditions of the insurance agreement or to pay the increased insurance contribution (premium), the insurer shall be entitled to apply to court for termination or amendment of the insurance agreement upon a material change in the circumstances (Article 6.204 of this Code).


3. If the policyholder fails to fulfil the obligation stipulated in paragraph 1 of this Article, the insurer shall be entitled to request the termination of the agreement and to claim damages to the extent that they are not covered by the received insurance contribution (premium). However, the insurer shall have no right to request termination of the insurance agreement if the circumstances which could have led to an increase in the insurance risk have disappeared.


4. If, during the period of validity of the insurance agreement, there is a material change in the circumstances established in the insurance agreement which decrease or may decrease the insurance risk, the policyholder shall be entitled to request the change of the conditions of


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the circumstances established in the insurance agreement which decrease or may decrease the insurance risk, the policyholder shall be entitled to request the change of the conditions of the insurance agreement or the reduction of the insurance contribution (premium). If, in such case, the insurer does not agree to change the conditions of the insurance agreement or to pay the reduced insurance contribution (premium), the policyholder shall be entitled to apply to court for termination or amendment of the insurance agreement upon a material change in the circumstances (Article 6.204 of this Code).


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Article 6.1011. Change of the owner of the insured property


1. If the ownership right to the insured property passes from the person in whose interests the insurance agreement has been concluded to any other person, the rights and obligations under the insurance agreement shall pass to the new owner of the insured property, except for cases when the property from the original owner is taken in a compulsory procedure or the insurance agreement provides otherwise. 


2. The new owner of the property must immediately notify the insurer in writing about the assignment of the ownership right.


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Article 6.1012. Obligation of the policyholder to notify about the insured event


1. Upon becoming aware of the insured event, the policyholder must notify the insurer or its representative to that effect within the time limit and in the manner stipulated in the agreement. The beneficiary shall be subject to the same obligation if he is aware of the insurance agreement concluded for his benefit and intends to exercise his right to the insurance benefit.


2. If the policyholder (beneficiary) fails to fulfil the obligation set forth in paragraph 1 of this Article, the insurer shall be entitled to refuse to pay the insurance benefit or reduce it in consideration of whether the policyholder has failed to fulfil his obligation intentionally or through negligence, except for the cases when it is proved that the policyholder became aware of the insured event in good time or when the failure to notify about the insured event has no effect on the insurer’s obligation to pay the insurance benefit.


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Article 6.1013. Obligation to take measures to mitigate the loss


1. Upon occurrence of the insured event, the policyholder must take reasonable measures available to him to mitigate the potential damage, following the insurer’s instructions provided that such instructions have been given to the policyholder.


2. The necessary expenses incurred by the policyholder while mitigating the damage or following the insurer’s instructions must be covered by the insurer, notwithstanding the fact that the measures in question have not produced a positive result. Such expenses shall be covered in proportion to the ratio between the sum insured and the value of insurance, notwithstanding the fact that the expenses, together with the amount of the loss, exceed the sum insured.


3. The insurer shall be released from compensation for damage if the damage was caused by the deliberate failure of the policyholder to take reasonable measures available to him to mitigate or prevent such damage.


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Article 6.1014. Release from payment of the insurance benefit


1. The insurer shall be released from payment of the insurance benefit if the insured event has occurred through a malicious act of the policyholder, the insured person, or the beneficiary, to the exclusion of the exceptions established in paragraphs 3 and 4 of this Article. The insurer must pay the insurance benefit if malicious acts or omission are socially valuable (indispensable defence, performance of a civil duty, etc.).


2. The law may determine cases in which the insurer is released from payment of the insurance benefit due to the fact that the insured event occurred through gross negligence on the part of the policyholder or the beneficiary.


3. The insurer shall not be released from payment of the insurance benefit under the civil liability insurance agreement if the damage to health or death has been caused through the fault of the person liable for such damage.


4. The insurer shall not be released from payment of the insurance benefit when such benefit is to be paid under the insurance agreement in case of the death of the insured, where the reason of the death was suicide, but the insurance agreement had been in force for more than three years.


5. Unless the insurance agreement provides otherwise, the insurer shall be released from payment of the insurance benefit also in the following cases:


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1) if the insured event occurred due to the acts of war or impact of radioactive radiation;


2) if the damage was caused by confiscation, seizure or destruction of property following the instructions of the state-level authorities;


3) in other cases stipulated by law.


6. The laws may also establish other cases of the release from payment of the insurance benefit.


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Article 6.1015. Assignment of the rights of the policyholder to compensation for damage onto the insurer (subrogation)


1. Unless the insurance agreement provides otherwise, the the right to claim the paid amounts from the person liable for the damage incurred shall pass over to the insurer who has paid the insurance benefit. If the damage was caused intentionally, the right of claim shall pass over to the insurer, notwithstanding the fact that subrogation is prohibited by the insurance agreement. Subrogation shall not apply in the case of insurance against accidents and illness, civil liability insurance, as well as in other cases prescribed by laws. 


2. Having passed over to the insurer, the right of claim shall be exercised in compliance with the rules establishing the relations between the policyholder (beneficiary) and the person liable for the damage.


3. The policyholder (beneficiary) must provide the insurer with all the information which is necessary for the insurer to duly exercise the assigned right of claim.


4. If the policyholder (beneficiary) has waived his right of claim or if it has become impossible to exercise such right through the fault of the policyholder (beneficiary), the insurer shall be released from payment of the insurance benefit, in whole or in part, and shall be entitled to request the refund of the benefit which had already been paid.


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Article 6.1016. Reinsurance


1. The insurer may, in whole or in part, insure the risk of payment of the insurance benefit by concluding reinsurance agreements with other insurers. In such case, the insurer under the original insurance agreement shall become the policyholder under the reinsurance agreement.


2. The reinsurance agreements mutatis mutandis shall be subject to the rules of this Chapter.


3. In case of reinsurance, the insurer under the original insurance agreement shall remain liable towards the policyholder for the payment of the insurance benefit.

 


Article 6.1017. Mutual insurance


1. Natural and legal persons may insure the property interests on a mutual basis by combining the funds necessary for such insurance in self-insurance societies.


2. The activities of self-insurance societies shall be regulated by laws.


3. The rules of this Chapter shall apply to mutual insurance to the extent that other laws do not provide otherwise.

 


Article 6.1018. Special branches and groups of insurance

The rules of this Chapter shall apply to branches and groups of insurance prescribed by law to the extent that other laws do not provide otherwise.

 

 

Annex to

the Civil Code

of the Republic of Lithuania


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Annex to

the Civil Code

of the Republic of Lithuania

 

 


LEGAL ACTS OF THE EUROPEAN UNION IMPLEMENTED BY THIS LAW


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1. Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, as last amended by Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019.


2. Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers, as last amended by Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019.


3. Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts.


4. Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive  97/7/EC of the European Parliament and of the Council, as last amended by Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019.


5. Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No


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of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC.


6. Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.


7. Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law.


8. Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services.


9. Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC.


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APPROVED BY

Law No IX-926

of 4 June 2002

 

REPUBLIC OF LITHUANIA

 

LABOUR CODE

 

(As last amended on 9 December 2010 – No XI-1219)

 

PART I

GENERAL PROVISIONS

 

CHAPTER I

LABOUR LAWS AND RELATIONSHIPS REGULATED BY LABOUR LAWS

 

Article 1. Relationships Regulated by the Labour Code of the Republic of Lithuania


1. This Code shall regulate employment relationships connected with the exercise and protection of employment rights and the fulfilment of employment obligations established in this Code and other regulatory acts.


2. The limits of regulation of individual spheres of employment relationships shall be established by this Code, as well as by other laws and Government resolutions in accordance with the limits established by this Code.


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Article 2. Principles of Legal Regulation of Employment Relationships


1. The regulation of relationships referred to in Article 1 of this Code shall be subject to the following principles:


1) freedom of association;


2) freedom of choice of employment;


3) state aid to persons in realising the right to employment;


4) equality of subjects of labour law irrespective of their gender, sexual orientation, race, nationality, language, origin, citizenship and social status, religion, marital and family status, age, beliefs or views, membership in political parties and public organisations, factors that are not related to the employee's professional qualities;


5) provision of safe and healthy working conditions;


6) fair remuneration for work;


7) prohibition of all forms of forced and compulsory labour;


8) stability of employment relationships;


9) uniformity of labour laws and their differentiation on the basis of working conditions and psychophysical qualities of employees;


10) freedom of collective bargaining for the purpose of reconciliation of interests of employees, employers and the state;


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10) freedom of collective bargaining for the purpose of reconciliation of interests of employees, employers and the state;


11) liability of the parties to collective agreements for their obligations.


2. The state must support the implementation of employment rights. Employment rights may in exceptional cases be restricted only by law or by a court decision where such restrictions are necessary in order to protect public order, the principles of public morals, as well as the health, life, property, rights and legitimate interests of members of the public.


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Article 3. Sources of Labour Law


1. The sources of labour law shall comprise the Constitution of the Republic of Lithuania, international treaties to which the Republic of Lithuania is a party, EU legal norms regulating employment relationships, this Code, other laws and regulatory acts consistent with these laws, regulatory provisions of collective agreements.


2. Government resolutions and other regulatory acts may regulate employment relationships only in the cases and to the extent determined by this Code and other laws.


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Article. 4. Labour Laws and other Regulatory Acts


1. Labour laws shall establish:


1) the scope, tasks and principles of labour law;


2) legal grounds of the employment of the population;


3) rules for concluding and implementing collective agreements, as well as the liability of the parties for their obligations;


4) conditions of remuneration for work in enterprises, establishments and organisations financed from the state and municipal budgets;


5) maximum working time and minimum rest periods;


6) the amount of minimum benefits, guarantees, compensations and the level of other employment rights;


7) basic employee safety and health standards and rules;


8) rights of trade unions and other employees' representatives in the sphere of employment;


9) basic provisions of professional education and in-service training;


10) grounds for ensuring labour discipline;


11) conditions and amount (limits) of material liability;


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12) basic provisions of the supervision of and control over compliance with labour laws.


2. The Government, other state and municipal institutions shall have the right to adopt, within their respective competence, regulatory acts on the issues relating to the regulation of employment relationships. The Government may not adopt regulatory acts putting employees in a worse position as compared to that established by this Code and other labour laws. The provisions of regulatory acts of other state and municipal institutions putting employees in a worse position as compared to that established by this Code and other labour laws shall be null and void.


3. Enterprises, establishments and organisations may, within their respective competence and in the manner prescribed by laws, adopt internal (local) regulatory acts establishing working conditions other than those regulated by labour laws and other regulatory acts referred to in paragraphs 1 and 2 of this Article, as well as providing for work, social and household allowances to employees or their groups in addition to those established by laws and other regulatory acts.


4. Tripartite agreements, collective agreements and internal (local) regulatory acts on working conditions putting employees in a worse position as compared to that established by this Code, laws and other regulatory acts shall be null and void. In the cases where this Code and other laws do not directly prohibit subjects of legal employment relationships from establishing, of their own accord and by agreement, mutual rights and obligations, these subjects must observe the principles of equity, reasonableness and fairness.


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Article 5. Scope of Labour Laws


1. Labour laws and other regulatory acts shall be applied to employment relationships in the territory of the Republic of Lithuania regardless of whether a person is employed in Lithuania or has been posted by his employer abroad.


2. Employment relationships which arise when persons are employed on board ships or on board aircraft shall be regulated by labour laws and other regulatory acts of the Republic of Lithuania when these ships are flying the national flag of the Republic of Lithuania or the aircraft is marked with the symbols of Lithuania. Labour laws, other regulatory acts of the Republic of Lithuania shall be applied to persons working on other means of transport if the employers who own these means of transport fall within the jurisdiction of the Republic of Lithuania.


3. Where an employer is a foreign state, the Government or an administrative unit or a unit operating as a diplomatic mission, foreign organisation or person, laws and other  regulatory acts of the Republic of Lithuania shall  apply to employment relationships with residents of the Republic of Lithuania to the extent they do not violate diplomatic immunity.


4. (Repealed).


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Article 6. Application of Foreign Law


1. Foreign law shall apply to employment relationships where this is provided for by international treaties to which the Republic of Lithuania is a party, laws of the Republic of Lithuania or agreements between the parties to the contract of employment.


2. Foreign law shall not apply where the application thereof is contrary to public order established by the Constitution and other laws of the Republic of Lithuania. In such cases labour laws of the Republic of Lithuania shall be applied.


3. The mandatory provisions of the labour law of the Republic of Lithuania shall be applied regardless of the fact that the parties have chosen to apply foreign law.


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Article 7. Law Applicable to Employment Relationships of International Character


1. The parties to a contract of employment may choose the law applicable both to the entire contract of employment and to a part thereof. The choice must be explicit or implicit from the conditions of the contract of employment or other circumstances. The choice by the parties of the applicable law shall not invalidate in the sphere of employee protection the mandatory legal provisions of the state whose laws would apply in the absence of an agreement between the parties on the applicable law.


2. In case of failure by the parties to choose the applicable law by an agreement between them, the said law shall be chosen based on the following principles:


1) in case of permanent employment in one state, the labour law of that state shall be applied irrespective of the employee temporarily working in another state;


2) if the employee has no permanent employment in any state, the labour law of the state where the employer has his principal place of business (headquarters) shall be applied;


3) if all the existing circumstances allow to conclude that employment relationships are connected to a greater extent with the state other than the one whose law is applicable according to the principles listed in paragraphs 2(1) and 2(2) of this Article, the labour law of that other state with which these employment relationships are connected to the greatest extent shall be applied.


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Article 8. International Treaties


1. Where international treaties to which the Republic of Lithuania is a party establish rules other than those laid down by this Code and other labour laws of the Republic of Lithuania, the rules of the international treaties to which the Republic of Lithuania is a party shall be applied.


2. International treaties to which the Republic of Lithuania is a party shall be directly applied to employment relationships, except in cases where international treaties provide that the application thereof requires a special regulatory act of the Republic of Lithuania.

 


Article 9. Analogy of Law and Legislation


1. Where labour law has no direct provision regulating a certain relationship, the provisions of labour law regulating a similar relationship shall apply.


2. Where the analogy of labour regulatory acts cannot be applied, provisions of other branches of law regulating similar relationships shall apply according to the basic principles and spirit of labour laws.


3. Application by analogy of special legal provisions establishing exceptions from the general rules shall not be allowed.


4. Where relationships referred to in Article 1 of this Code are not regulated by labour regulatory acts, and provisions of other branches of law which regulate similar relationships may not be applied to them, the arising disputes shall be settled subject to the principles listed in paragraph 1 of Article 2.


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Article 10. Principles of Interpretation of Provisions of the Labour Code


1. The provisions of this Code shall be interpreted having regard to the system and structure of the Code in order to ensure the uniformity of the Code and the compatibility of its individual constituent parts.


2. The words and word combinations used in the Code shall be interpreted in their general meaning except for the cases when it can be inferred from the context that the word or combination of words is used in its special – legal, technical or other – meaning. In case of a contradiction between the general and special meaning of a word, the special meaning of the word shall be given priority.


3. When determining the actual meaning of the provision, the tasks and objectives of the Code and the provision being interpreted shall be taken into account.

 


Article 11. Implementation of Labour Laws


1. In case of a contradiction between a provision of this Code and provisions of another law or regulatory act, the provision of this Code shall apply.


2. Should there be contradictions between the provisions of labour regulatory acts, the provision which is more beneficial for the employee shall apply.

 


Article 12. Validity of Labour Laws

Labour laws and other regulatory acts regulating employment relationships shall have no retroactive effect.

 


CHAPTER II

SUBJECTS OF LABOUR LAW


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CHAPTER II

SUBJECTS OF LABOUR LAW

 


Article 13. General Legal Capacity of Natural Persons in Employment Relationships


1. Capacity to have employment rights and obligations (legal capacity in employment relationships) shall be recognised equally to all citizens of the Republic of Lithuania. Foreign nationals and stateless persons, who are permanently residing in the Republic of Lithuania, shall have the same legal capacity in employment relationships in the Republic of Lithuania as its citizens. Exceptions may be provided for by laws.


2. A person shall acquire full legal capacity in employment relationships and capacity to acquire employment rights and undertake employment obligations when he reaches sixteen years of age. Exceptions shall be provided for by this Code and other labour laws.

 


Article 14. General Legal Capacity of Employers in Employment Relationships


1. Employers shall acquire general legal capacity in employment relationships from the moment of their establishment.


2. Employers shall acquire employment rights and undertake employment obligations as well as exercise the above rights and fulfil the above obligations through their bodies and administration. The said bodies shall be formed and act in accordance with laws and the activity documents of employers. Owners of individual (personal) enterprises, farmers and employers-natural persons may exercise employment rights and fulfil employment obligations themselves.


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Article 15. Employee

An employee is a natural person having general legal capacity in employment relationships pursuant to Article 13 of this Code and employed under a contract of employment for remuneration.

 


Article 16. Employer


1. An employer may be an enterprise, establishment, organisation or any other organisational structure irrespective of the form of ownership, legal form, type and nature of activities, which has general legal capacity in employment relationships pursuant to Article 14 of this Code.


2. An employer may also be any natural person. General legal capacity of an employer (natural person) shall be regulated by the Civil Code.

 


Article 17. Staff

The staff shall comprise all employees connected with the employer by employment relationships.

 


CHAPTER III

REPRESENTATION OF LABOUR LAW SUBJECTS


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CHAPTER III

REPRESENTATION OF LABOUR LAW SUBJECTS

 


Article 18. Basic Principles of Representation


1. Employees and employers may acquire, change, waive or defend employment rights and obligations through the entities representing them. Employees and employers may be represented both in collective and individual employment relationships. Representation in collective employment relationships shall be regulated by this Code, whereas representation in individual employment relationships shall be regulated by the Civil Code insofar as such regulation is consistent with this Code.


2. Representation in collective employment relationships based on the effective labour laws shall occur without the expression of will of an individual employee provided that such entity or person represents the will of the majority of employees. Joint obligations assumed under such representation shall be binding on all the employees who fall within the scope of such obligations, even though individually they have not given special authorisation to the entity of collective representation.


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Article 19. Employees' Representatives


1. The rights and interests of employees under employment relationships may be represented and protected by trade unions. Where an enterprise, establishment or organisation has no functioning trade union and where a staff meeting has not transferred the function of employee representation and protection to the trade union of the respective sector of economic activity, the employees shall be represented by the works council elected by secret ballot at a general staff meeting.


2. The interests of both the employees and the employers may not be represented and protected by one and the same person.

 


Article 20. Trade Unions

When protecting employment, professional, economic and social rights and interests of the employees, trade unions shall be guided by laws regulating the activities of trade unions, this Code and their respective regulations.

 


Article 21. Works Council


1. The status of works councils and the procedure of their formation shall be established by law.


2. The works council shall have all the rights of the entities of collective representation where an enterprise, establishment or organisation has no functioning trade union and where a staff meeting has not transferred the function of employee representation and protection to the trade union of the respective sector of economic activity (paragraph 1 of Article 19 of the Code).


3. The works council may not perform functions recognised under laws as the prerogative of trade unions.


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Article 22. Rights of Employees' Representatives


1. The employees' representatives shall have the following main rights of collective representation:


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1) to conclude collective agreements, supervise the implementation thereof;


2) to submit proposals to the employer concerning the organisation of work in the enterprise;


3) to organise and manage strikes and other lawful measures which the employees have the right to take;


4) to submit proposals to state and municipal institutions;


5) to exercise non-governmental supervision of and control over compliance with labour laws;


6) to protect the rights and interests of the employees when the employer takes decisions concerning collective redundancies, the reorganisation of the enterprise, establishment or organisation and other decisions that are likely to have substantial effects on the legal status of the employees;


7) to receive information and have consultations with employers about the current and future activities of the enterprise (structural division), its economic situation and the status of employment relationships, as well as prior to taking decisions that are likely to have substantial effects on the organisation of work in the enterprise and the legal status of the employees;


8) to appeal to the court against decisions and actions of the employer and persons authorised by him if the said decisions and actions are contrary to legal norms and agreements or violate the rights of the represented person.


2. The entities representing the employees shall also carry out other actions representing the interests of the employees in employment relationships as well as complying with laws and not interfering with bona fide relationships between the parties. If the competence of the employees' representatives is not defined by


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relationships as well as complying with laws and not interfering with bona fide relationships between the parties. If the competence of the employees' representatives is not defined by laws, the remit of their competence shall be determined by the staff in the collective agreement.


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Article 23. Employers' Rights and Obligations Relating to the Employees' Representatives


1. An employer must:


1) respect the rights of the employees' representatives and not interfere with their activities. The activities of the employees' representatives may not be terminated at the employer's will;


2) when making decisions that may affect the legal status of the employees, hold consultations with the employees' representatives and, in cases provided for by laws, obtain their consent;


3) not delay collective bargaining;


4) consider the proposals submitted by the employees' representatives within the term set in this Code or, where no term is set, within one month and give a reasoned  response thereto in writing;


5) provide free of charge the minimum information on work-related issues concerning the activities of the enterprise;


6) provide conditions for the employees' representatives to perform their functions;


7) perform other obligations provided for by collective agreements;


8) ensure other rights of the employees' representatives provided for by laws.


2. Should the employees' representatives infringe the employer's rights, laws or agreements, the employer shall have the right to apply to the court in accordance with the procedure established by laws requesting termination of the activity infringing his rights, laws or agreements.


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1. An employer shall be represented both in collective and individual employment relationships by the manager of an enterprise, establishment or organisation. Employers may also be represented in enterprises by other persons (the administration) under the law or authorisation. The administration shall be comprised of officers who are entitled to give binding directions within their competence to the employees subordinate to them. The officers of the administration shall carry out operational management of an enterprise, establishment and organisation in accordance with laws and founding documents of the respective enterprise, establishment and organisation.


2. The manager of an enterprise, establishment or organisation shall be entitled, within his competence, to delegate part of his powers in the sphere of labour law to a natural or legal person.


3. Employers shall be represented in the social partnership on the national, sectoral (production, services, professional), territorial (municipality, county) level by employers’ organisations (their associations, federations, confederations, etc.). Employers’ organisations shall mean public legal persons operating under the Law on Associations, which represent the rights and interests of their member employers in the social partnership in accordance with their articles of association (statutes).


4. Employers which are enterprises, establishments or organisations financed from the state and municipal budgets, the budget of the State Social Insurance Fund and resources of other funds established by the State shall be represented in the social partnership on the national, sectoral (production, services, professional), territorial


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and resources of other funds established by the State shall be represented in the social partnership on the national, sectoral (production, services, professional), territorial (municipality, county) level by the founder of the respective enterprise, establishment and organisation or an institution authorised by it, which has the rights and obligations of an employers’ organisation set forth in this Code.


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CHAPTER IV

TIME LIMITS

 


Article 25. Definition of a Time Limit


1. A time limit set by a labour law, agreement or decision of a labour dispute (conflict) resolution body may be defined by a calendar date or a certain time period. 


2. A time limit may also be defined by reference to an event that must inevitably occur.


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1. A time limit defined by a certain time period shall start on the day following the calendar day or event that marks the beginning of the time limit.


2. Time limits calculated in years, months or weeks shall end on the relevant day of the year, month or week. Where a time limit calculated in months ends in the month which does not have an appropriate day, the time limit shall end on the last day of the month. Where it is not possible to determine exactly the starting month of the time limit which is calculated in years or the starting day of the time limit which is calculated in months, the last day of the time limit shall be considered to be, accordingly, the thirtieth day of June or the fifteenth day of the month.


3. A time limit defined by weeks or calendar days shall also cover weekends and holidays. Should the last day of the time limit fall on a non-working day, the next working day thereafter shall be considered as the end of the time limit. Unless otherwise established by laws, a time limit calculated in days shall be calculated in calendar days.


4. If a time limit is set for the performance of a certain action, the action may be performed by 24.00 (midnight) of the last day of the time limit. However, if an action has to be performed in a certain enterprise, establishment or organisation, the time limit shall expire at the hour when appropriate operations are terminated in that


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an action has to be performed in a certain enterprise, establishment or organisation, the time limit shall expire at the hour when appropriate operations are terminated in that enterprise, establishment or organisation.


5. Written applications and notices delivered to the post office, telegraph or any other communications institution by 24.00 (midnight) of the last day of the time limit shall be considered to have been filed on time.


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Article 27. Limitation of Actions


1. Limitation of actions shall mean a period of time specified by laws within which a person may bring an action in defence of his infringed rights.


2. The general period of limitation for relationships regulated by this Code shall be three years, unless shorter periods of limitation of actions are established for individual claims by this Code or other labour laws.


3. There shall be no limitation of actions regarding employee's claims for defence of his honour and dignity.


4. Labour laws may provide that limitation of actions shall not apply with respect to certain other claims.


5. Unless this Code and other labour laws contain special provisions regarding the application of limitation of actions, the provisions of the Civil Code and the Code of Civil Procedure shall apply to limitation of actions.

 


Article 28. Extinctive Time Limits


1. Labour laws may establish time limits upon the expiry whereof rights and obligations related thereto shall extinguish (extinctive time limits).


2. Extinctive time limits, save for the exceptions set forth in labour laws, may not be suspended, extended or renewed.


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Article 29. Procedural Time Limits

The time limits set in labour laws for out-of-court and judicial proceedings shall be subject to the provisions of the Code of Civil Procedure relating to the application and calculation of these time limits, save for the exceptions set forth in labour laws.


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Article 30. Length of Service


1. Length of service shall mean a period of time during which a person had employment relationships regulated by this Code, as well as other periods which under regulatory acts or collective agreements may be included in the length of service which is taken into account by labour laws, other regulatory acts and collective agreements with regard to certain employment rights or additional guarantees and privileges. Length of service may be:


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1) general, covering all periods of time when a person had legal employment relationships, as well as other periods that may be included in the length of service;


2) special, covering periods of employment in a certain profession, speciality or in a certain office or under certain working conditions, as well as periods that may be included in the special length of service;


3) length of service in a particular enterprise, establishment or organisation which covers the period of employment with the respective employer, as well as periods which may be included in the above length of service. Any change of the owner of the enterprise, establishment or organisation or changes in their subordination, their founders or names, as well as their merger or division by the formation of a new enterprise, establishment or organisation, division by acquisition, or merger by acquisition shall not affect the length of service in the respective enterprise, establishment or organisation;


4) uninterrupted period of service covers the period of employment in one enterprise, establishment, organisation or several enterprises, establishments or organisations if the person is transferred from one place of employment to another by agreement between the employers or on other grounds without interrupting the length of service or provided that the break in employment is within the set time limits.


2. The procedure for calculating the length of service, as specified in paragraphs 1(2), 1(3) and 1(4) of this Article, in enterprises, establishments and organisations financed from the state or municipal budgets


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1(2), 1(3) and 1(4) of this Article, in enterprises, establishments and organisations financed from the state or municipal budgets shall be laid down by the Government and in other places of employment – by collective agreements.


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CHAPTER V

CONTROL OVER COMPLIANCE WITH LABOUR LAWS

 


Article 31. Bodies Exercising Control over Compliance with Labour Laws

Control over compliance with labour laws, other regulatory acts and collective agreements shall be exercised by state and non-state bodies.

 


Article 32. State Control over Compliance with Labour Laws, Collective Agreements and Prevention of Infringements

Control over compliance by employers with the regulatory provisions of this Code, labour laws, other regulatory acts and collective agreements shall be exercised  and prevention of infringements of the said acts shall be effected by the State Labour Inspectorate and other institutions, within their competence established by laws.

 


Article 33. Non-state Control over Compliance with Labour Laws, Collective Agreements

Non-state control over compliance with labour laws, other regulatory acts, collective agreements shall be exercised by trade unions, inspectorates within their chain of command and other institutions operating in accordance with laws and other regulatory acts.

 


CHAPTER VI

EXERCISE AND PROTECTION OF EMPLOYMENT RIGHTS


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CHAPTER VI

EXERCISE AND PROTECTION OF EMPLOYMENT RIGHTS

 


Article 34. Grounds Giving Rise to Employment Rights and Obligations

Employment rights and obligations may arise, change or expire:


1) under this Code and other laws, contracts of employment, collective agreements and other arrangements which, though not provided for by laws, are not contrary to them;


2) under court judgements;


3) under administrative acts which result in legal consequences in employment matters;


4) as a result of the damage inflicted;


5) as a result of legal facts.

 


Article 35. Exercise of Employment Rights and Fulfilment of Employment Obligations


1. While exercising their rights and fulfilling their obligations, employers, employees and their representatives must comply with laws, respect the rules of communal life and act in good faith, adhere to the principles of reasonableness, equity and fairness. Abuse of one's right shall be prohibited.


2. Exercise of employment rights and fulfilment of employment obligations must not infringe upon other persons' rights and interests protected by laws. It shall be prohibited to hinder the formation of trade unions by the employees and to interfere with the lawful activities of the unions.


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Article 36. Protection of Employment Rights


1. Employment rights shall be protected by laws except in cases when the rights are exercised inconsistently with their purpose, public interests, peaceful work, good usages or the principles of public morals.


2. Employment rights shall be protected by the court or any other dispute resolution body in accordance with the procedure established by laws and in one of the following ways:


1) by recognising the said rights;


2) by restoring the situation that existed before the infringement of the right and preventing performance of the acts infringing upon the right;


3) by obligating to perform the obligation in kind;


4) by terminating or modifying the legal relationship;


5) by recovering from the person who has infringed upon the right the pecuniary or non-pecuniary damage or, in the cases prescribed by laws, also penalty charges or late payment interest;


6) in other ways established by laws.


3. By way of exception, only the courts shall have the prerogative to protect employment rights under laws in the following ways:


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1) by recognising as invalid the acts adopted by state institutions or individual officers where the said acts are contrary to laws;


2) by not applying the act adopted by a state institution, municipality or individual officer where the said act is contrary to laws.


4. Employment rights shall be protected by trade unions in accordance with the procedure established by laws regulating their activities.


5. In the cases specifically established by labour laws employment rights shall be protected under administrative procedure.


6. A person whose right has been infringed may claim damages unless otherwise established by labour laws.


7. Labour honour and business repute shall be protected pursuant to the Civil Code except in cases where this Code or other laws establish other procedure and ways for protecting labour honour and business repute.


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Article 37. Protection of Employment Rights by Employees Themselves

Employees shall be permitted to protect their employment rights themselves only in the cases established by this Code.

 


Article 38. Liability

Liability for any infringement of the rights and obligations established by this Code shall be determined by this Code, laws, other regulatory acts, collective agreements and other arrangements.

 


PART II

COLLECTIVE EMPLOYMENT RELATIONSHIPS

 


CHAPTER VII

GENERAL PROVISIONS

 


Article 39. Reconciliation of Interests of Subjects of Employment Relationships

With the view of embodying social partnership, this Code and other laws shall establish that social partnership may be realised by way of  bargaining and agreements.


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Article 40. Concept and Principles of Social Partnership


1. Social partnership shall mean the system of interrelationships between representatives of employees and employers and their organisations and, in certain cases specified by this Code and other laws, also state institutions with a view to reconciling the interests of the subjects of employment relationships.


2. Social partnership shall be based on the following principles:


1) free collective bargaining;


2) voluntary and independent assumption of responsibilities binding the parties;


3) inviolability of the existing legal system;


4) actual fulfilment of responsibilities;


5) provision of objective information;


6) mutual control and accountability;


7) equality of parties, goodwill and respect for legitimate mutual interests.

 


Article 41. Parties of Social Partnership

Representatives of employees and employers and their organisations shall be considered to be parties of social partnership – social partners. In case of a tripartite social partnership the Government and municipal institutions shall participate in the partnership on an equal basis with representatives of employees and employers and their organisations.

 


Article 42. Levels of Social Partnership


1. Social partnership may be developed on the following levels:


1) national;


2) sector (production, services, professional);


3) territorial (municipality, county);


4) enterprises, establishments or organisations and their structural divisions.


