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be removed from the public register in line with the bailiff’s notice that the person who concluded the conditional mortgage has not become the owner of the property.


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CHAPTER XII

PLEDGE

 


Article 4.198. Concept of the pledge


1. Pledge shall mean the real right to another’s movable property and property rights ensuring the performance of a current or future property obligation.


2. The object of the pledge may be transferred to the creditor, a third party or left under the management of the pledgor. The transfer of the object of the pledge shall also include the transfer of a mercantile or equity security to the creditor and any other right to manage the object of the pledge, including the making of entries in bank accounts or securities.


3. The right of pledge and its validity shall depend on the validity of the principal obligation secured by the pledge.


4. Where the debtor fails to perform the obligation secured by the pledge, the creditor (pledgee) shall have the right to satisfy his claim from the value of the collateral prior to other creditors.


5. The Law on Financial Collateral Arrangements may establish rules other than those laid down in this Code.


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Article 4.199. Grounds for the pledge


1. The pledge may be either contractual or compulsory.


2. A contractual pledge shall arise on the basis of a contract or unilateral transaction (declaration). A contractual pledge arising on the basis of a unilateral transaction (declaration) of the pledgor shall be referred to as a bearer pledge.


3. The provisions of this Book regulating judicial mortgage shall apply mutatis mutandis to a compulsory mortgage arising on the basis of laws, a judicial decision or a decision of an authorised institution/officer.


4. The provisions of this Book regulating the types of contractual mortgage, with the exception of enterprise mortgage, shall apply mutatis mutandis to a contractual pledge.

 


Article 4.200. Claims secured by the pledge


1. The pledge may secure the performance of any current or future property obligation.


2. The pledge shall secure the performance of the principal claim and the recovery of the interest arising from this claim. The parties to the pledge transaction may agree in the pledge transaction that penalties and losses incurred by the creditor due to the delay of the performance of the obligation secured by the pledge shall be secured by a maximum pledge.


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Article 4.201. Object of the pledge


1. Any existing or future movable property and property rights may be the object of the pledge.


2. Things against which, under the existing laws, execution may not be levied as well as movable things that have been pledged together with an immovable thing in accordance with the procedure established in Article 4.171(1) of this Code may not be the object of the pledge.


3. Unless the laws or the pledge transaction provide otherwise, a pledge of the thing shall cover accessories of the thing and non-separated fruits.


4. The risk of accidental perishment or damage of the collateral shall be borne by the pledgor unless laws or the pledge transaction provide otherwise.


5. Jointly owned things may be pledged only upon a written consent of all co-owners.


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Article 4.202. Pledge of property complexes


1. A pledge transaction may take the form of the pledge of property complexes made up of movable property, the composition and form of which is constantly changing, including supplies of goods, equipment, rights of claim, etc. In this case, the object of the pledge shall be described by indicating the category of pledged property, whereas separate objects constituting the property complex shall not be categorised.


2. In carrying out usual commercial activities, the pledgor shall have the right to dispose of the objects constituting the pledged property complex only if the total value of the pledged property is not reduced. Where the pledgor lawfully disposes of the collateral, the pledge of the transferred objects shall be extinguished, and the property newly acquired by the pledgor shall become the object of the pledge from the moment of acquisition of the property into ownership.


3. The provisions governing recovery from the property subject to an enterprise mortgage shall apply mutatis mutandis to recovery from the property complex.


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Article 4.203. Substitution of the collateral


1. Upon the consent of the pledgee(s), the pledgor may substitute the thing defined by individual characteristics, that is the object of the pledge, by another thing that has not been previously pledged.


2. In the case specified in paragraph 1 of this Article, the pledge of the prior thing shall be revoked following the execution of the pledge of a new thing.

 


Article 4.204. Real rights as the object of the pledge


1. Rights to the land, forest, other things, i.e. the right of use, the right of lease and other property rights, except for rights inseparably connected to the person of the owner of the thing pledged as well as rights that are not transferable by law or by the contract, may be the object of the pledge.


2. In addition, property rights that the pledgor will acquire in the future may be the object of the pledge.


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Article 4.205. Insurance of the object of the pledge


1. The law or the contract may stipulate the duty to insure the thing that has been pledged/the thing to be pledged.


2. A contract may also provide for the duty of the pledgor (a legal person) to insure the object of the pledge in the event of liquidation or insolvency.


3. In the event of an insured accident, the creditor whose claims are secured by the pledge shall have a priority right (in accordance with the succession of pledges, if there have been multiple pledges) to satisfy his claims from the sum of the insurance indemnity.


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Article 4.206. Pledgor


1. A debtor himself and a third person may also be the pledgor.


2. The pledgor must be the owner of the object of the pledge or a person having the property right that is the object of the pledge, except when the pledge transaction stipulates that the object of the pledge will be acquired by the pledgor in the future. A trustee managing the property by the right of property trust shall have the right to pledge this property only in the cases where the laws or the transaction on the basis whereof the right of property trust arises provide for the right to pledge the property managed by the right of trust. Laws, judicial decisions or transactions may establish the right of the administrator of property of another person to pledge the property.


3. A property right that belongs to several persons may be pledged only with the consent of all of them. In this case, the pledge transaction shall be signed by all of these persons.


4. The lessee (the recipient of the loan-for-use) may pledge rights related to the lease of the thing (loan-for-use) only with the written consent of the lessor (delivering party).


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Article 4.207. Remaining of the right to pledge when the right of ownership of the collateral has been transferred to another person


1. When the right of ownership of the collateral has been transferred from the pledgor to another person, the pledge shall remain valid when the object of the pledge has been transferred to the pledgee or when the pledge transaction has been registered in the public register unless the laws or pledge transactions provide otherwise. This rule shall also apply when property rights constitute the object of the pledge.


2. The right to pledge shall be valid in all its entirety even in the case when the debtor performs the obligation partially.

 


Article 4.208. Right to inspect the subject of the pledge


1. A creditor shall have the right to inspect the number, condition, storage conditions, etc. of pledged things managed by the pledgor unless otherwise provided in the contract.


2. When the pledgor violates storage conditions of the collateral, avoids submitting a damaged thing or submitting the remains of the destroyed thing, the creditor shall be entitled to request the discharge of the obligation secured by the pledge before the expiration of its term.


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1. Where the object of the pledge is transferred to the creditor, a written pledge transaction shall be concluded. A pledge arising on the basis of this transaction may be registered in the public register. The pledge transaction referred to in this paragraph may be concluded by means of information technology by registering the pledge in the public register in accordance with the procedure laid down in the regulations of this register. Failure to comply with the written form requirement shall render the transaction null and void.


2. Where the object of the pledge is transferred to a third party or remains with the pledgor, a pledge transaction and a unilateral declaration of the owner of the object of the pledge to pledge things or property rights shall be approved by a notary, with the exception of the case specified in paragraph 3 of this Article, and registered in the public register.


3. Where the object of the pledge is transferred to a third party or remains with the pledgor, while the creditor, the debtor and the pledgor (where the debtor and the pledgor are not the same person) are legal persons, a pledge transaction and a unilateral declaration of the owner of the object of the pledge to pledge things or property rights may also be concluded by means of information technology by registering the pledge in the public register in accordance with the procedure laid down in the regulations of this register.


4. A pledge transaction may be concluded as an individual transaction or an agreement on the pledge may be included into the transaction from which


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register.


4. A pledge transaction may be concluded as an individual transaction or an agreement on the pledge may be included into the transaction from which the principal obligation arises.


5. The parties to a pledge transaction shall be the pledgor, the debtor, the creditor and the person to whom the object of the pledge is transferred. Where the object of the pledge is pledged by a unilateral declaration of the owner, the party to the pledge transaction shall be solely the pledgor.


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1. A pledge transaction must include the following: the place and date of the conclusion of the transaction, the pledgor, the debtor, the creditor and the person to whom the object of the pledge has been transferred, their place of residence/registered office, the description of the object of the pledge, an obligation(s) secured by the pledge, a specific or maximum amount of the obligation(s), and the time limit for discharge. The type of the pledge must be indicated in the transactions of the conditional and maximum pledge. The conditional transaction shall specify the condition that gives validity to the pledge. Where the object of the pledge is pledged repeatedly, the debtor must indicate this in the pledge transaction.


2. Special requirements for the content of transactions shall not apply to pledge transactions, except for the cases specified by law.


3. Where several creditors are represented by one representative, by agreement between the creditors or by a unilateral declaration of the owner of the collateral, the pledge transaction may provide that only the representative of the creditors is to be indicated as the creditor in the public register. In this case, the grounds for representation must be indicated in the public register.


4. It shall be possible not to indicate the creditor in a pledge transaction drawn up unilaterally by the owner of the collateral. A bearer pledge may be used against third parties in good faith from the moment the creditor is indicated in the public register.


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Article 4.211. Subsequent pledges


1. Unless the thing has been transferred to the pledgee by a previous pledge transaction and unless the pledge transaction provides otherwise, a subsequent pledge shall be permitted. In these cases, the prior pledge remains valid.


2. A pledgor must notify each creditor about all prior and subsequent pledges and obligations secured by the pledge and their amount. A pledgor must compensate the losses incurred by any of the creditors arising from the failure to discharge this duty.

 


Article 4.212. Pledge priority


1. Where several pledge transactions have been concluded in respect of the same object of the pledge, the claim secured by the earlier pledge transaction shall have priority.


2. Where several pledge transactions registered in the public register have been concluded in respect of the same object of the pledge, the claim secured by the earlier pledge transaction registered in the public register shall have priority.


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Article 4.213. Entry into force of the pledge


1. The pledge between the parties shall enter into force from the moment of conclusion of the pledge transaction unless otherwise provided for in the pledge transaction.


2. Where the object of the pledge is transferred to a third party or remains with the pledgor, the pledge may be used against third parties in good faith only where the right of pledge has been registered in the public register in accordance with the procedure laid down in the regulations of this register.

 


Article 4.214. Duties of the person to whom the collateral is transferred

The person to whom the collateral has been transferred must take proper care of it. He shall be liable for the preservation thereof unless he proves that the thing has been lost or damaged through no fault of his. This person shall have no right to use the collateral unless otherwise provided for by law or the pledge transaction.

 


Article 4.215. Vindication of the collateral

Where the collateral has ceased to be in the possession of a pledgee, a pledgor or a third person, the pledgee or the third person may vindicate the thing in accordance with Articles 4.95 to 4.97 of this Code.


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Article 4.216. Emergence of the right of enforcement against the object of the pledge


1. A pledgee shall acquire the right of enforcement against the object of the pledge upon failure to perform the obligation at the expiry of the time limit for performing that obligation or upon the occurrence of other grounds specified in the pledge transaction.


2. The provisions of this Code regulating the mortgagee’s right to demand satisfaction of the claim secured by the mortgage prior to the expiry of the time limit shall mutatis mutandis apply to the emergence of the right of the creditor (pledgee) to demand satisfaction of the claim secured by the pledge prior to the expiry of the time limit.

 


Article 4.217. Enforcement against the object of the pledge that consists of two or more things/property rights

When the object of the pledge consists of two or more things/property rights, the enforcement may be directed towards all those things/property rights or towards each of them individually. The right of choice shall belong to the pledgee until the full satisfaction of the claim.

 


Article 4.218. Consequences arising when the claims of the pledgee are satisfied by a third party

When the claim of a pledgee is fully satisfied by a third party, the right of pledge shall pass to him together with the right of claim.


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1. Where a debtor fails to perform the obligation secured by the pledge, the creditor’s claim shall be satisfied from the value of the collateral unless laws or the transaction provide otherwise.


2. Where the object of the pledge is transferred to a third party or remains with the pledgor or where the pledge is compulsory, the provisions of this Code regulating the procedure of enforcement against the property secured by the mortgage shall apply mutatis mutandis to enforcement against the property secured by the pledge.


3. Where the object of the pledge is transferred to the creditor, imposed enforcement against the property secured by the pledge shall be carried out in accordance with the procedure laid down in the pledge transaction.


4. A creditor, a debtor and a pledgor (where a pledgor is not a debtor) shall have the right to agree, either in a pledge transaction or in the course of enforcement, that the object of the pledge is to be transferred into the creditor’s ownership or realised in any other way agreed by the parties. The agreement to transfer the object of the pledge into the creditor’s ownership shall be presumed when the object of the pledge is transferred to the creditor at the time of pledging.


5. Where the proceeds from the sale of the collateral are not sufficient to satisfy the claim of the pledgee in full, the pledgee shall have the right to recover the remaining amount from the debtor’s other property unless otherwise provided by


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the pledgee in full, the pledgee shall have the right to recover the remaining amount from the debtor’s other property unless otherwise provided by law or the pledge transaction. In this case, the pledgee shall have no priority over other creditors.


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Article 4.220. Realisation of property rights subject to the pledge


1. Where the object of the pledge is property rights, the object of the pledge shall be realised by transferring to the creditor the pledgor’s claims arising from the pledged property right or a part of the claims corresponding to the amount of the debt obligation or by transferring to the creditor the right to administer property rights and satisfy his claim from the received funds.


2. A creditor shall acquire the right to demand the transfer of the pledged property right or administration of the pledged property right from the time when he acquires the right of enforcement against the object of the pledge.

 


Article 4.221. Procedure for the satisfaction of the creditor’s claim secured by the funds in the bank account of the pledgor


1. Where funds in the bank account of the pledgor have been pledged to secure the discharge of the obligation, the creditor shall acquire the right to operate the bank account of the pledgor from the moment of emergence of the right of enforcement against the object of the pledge.


2. Having satisfied the claim from the existing and incoming funds in the pledgor’s bank account, the right of the creditor to operate the account of the pledgor terminates and the creditor must return to the pledgor the pledge transaction with an inscription therein about the satisfaction of the claim.


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Article 4.222. Settlements after the realisation of the collateral


1. Where, after the realisation of the collateral, the proceeds are in excess of the creditor’s claim, the difference in the amount must be paid to the pledgor.


2. Where, through the fault of a creditor, the collateral was realised at a lower price, the pledgor shall have the right to demand from the creditor the difference between the real market value of the thing and the price at which the thing was sold.


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Article 4.223. Assignment of the claim secured by the pledge or the right arising from the pledge


1. The contract on the assignment of the claim secured by the pledge or part of it must be concluded following the rules established in Book Six of this Code specifying requirements for the assignment of a claim. A debtor must be notified about the assignment of a claim and, where the pledgor is a third party, the latter must also be notified.


2. Where the object of the pledge is transferred to a third party or remains with the pledgor, the assignment of the right arising from the pledge may be used against third parties from the moment of registering the assignment of this right in the public register. Where the object of the pledge is transferred to the creditor, the assignment of the right arising from the pledge may be used against third parties from the time of transferring the possession of the object of the pledge to a new creditor.


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1) upon the expiry of the obligation secured by the pledge;


2) upon the loss of the collateral;


3) when the pledgee acquires the ownership right to the collateral or when the pledged rights are assigned to the pledgee;


4) upon the expiry of the period of validity of the right that is the subject of the pledge;


5) when the creditor cannot satisfy his claim from the subject of the pledge due to the delay of the limitation of actions;


6) by agreement between the parties or when the creditor renounces the pledge.


2. Where the pledged property is forcibly sold upon the demand of the creditor to whom the property has been pledged, all property pledges shall be revoked.


3. An extinguished pledge shall be removed from the public register. A creditor, a debtor or a pledgor shall file an application for deregistration of the extinguished pledge by means of information technology to the public register in accordance with the procedure laid down in the regulations of this register (where an application for deregistration of the extinguished pledge is filed by the debtor or the pledgor, the creditor must provide a confirmation of the extinction of the pledge by means of information technology).  An application of the creditor, the debtor or the pledgor for deregistration of the extinguished pledge may also be filed with a notary who shall forward the data on the extinction of the pledge to the public


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for deregistration of the extinguished pledge may also be filed with a notary who shall forward the data on the extinction of the pledge to the public register.


4. The renewal of the pledge shall be subject mutatis mutandis to the provisions of this Book regulating mortgage renewal.


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1. The pledgor shall have the right at any time from the date of maturity of the obligation until the moment of realisation of the subject of the pledge to revoke the pledge by properly discharging the obligation secured by the pledge.


2. Where the obligation secured by the pledge may be discharged in parts, the pledgor shall have the right to suspend the enforcement against the subject of the pledge by discharging the part of the obligation in respect of which the deadline has been missed.


3. The pledgor shall have the right to claim from the creditor compensation for losses incurred during the enforcement proceedings, also losses resulting from the improper custody of the subject of the pledge or forced sale of it.


4. The creditor must enforce the recovery in the most economical manner possible and may not unreasonably enrich himself at the debtor’s (pledgor’s) expense.


5. From the day of registration of the writ of execution in the public register, the debtor (pledgor) shall have the right to transfer the pledged property with the consent of the creditor. Having ascertained the solvency of the buyer suggested by the debtor (pledgor), the creditor must give his consent to enter into a transfer transaction where the selling price of the collateral corresponds to the amount of the principal claim secured by the pledge and the interest arising therefrom.


6. Where the creditor has initiated unreasonable recovery without due grounds or has filed an unreasonable


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secured by the pledge and the interest arising therefrom.


6. Where the creditor has initiated unreasonable recovery without due grounds or has filed an unreasonable claim, the debtor (pledgor) shall have the right to dispute the lawfulness of the creditor’s actions in contentious proceedings. Filing of an action shall not suspend the recovery procedure. The recovery procedure may be suspended only upon application of interim protection measures by court in the cases specified by law.


7. Where the property is pledged by the pledge of another’s property, the pledgor shall be held subsidiarily liable with the debtor from the date of non-performance of the obligation secured by the pledge. Administration of the property may not be established in respect of the property pledged by the pledge of another’s property.


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Article 4.226. Extinction of the pledge by depositing money

Where the pledgee refuses to accept the subject of the monetary obligation secured by the pledge, the pledgor may pay a respective amount into the deposit account of a bank or any other credit institution of a notary (where a pledge transaction has been certified by a notary). Once the full amount of the debt has been deposited, the pledge shall expire.

 


Article 4.227. Concept of the pledge at a pawnshop


1. Articles of personal use may be pledged at pawnshops in order to secure the repayment of short-term credits that are granted to natural persons by pawnshops.


2. When transferring pledged things to a pawnshop, the pledgor shall be issued a pledge ticket.


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Article 4.228. Rights, duties and responsibilities of a pawnshop


1. A pawnshop shall have no right to use or dispose of pledged things, except in the case specified in paragraph 3 of this Article.


2. A pawnshop shall be liable for the loss/destruction and damage of pledged things unless it proves that the things have been lost/destroyed or damaged due to force majeure.


3. Where the amount of credit secured by the pledge of the thing is not repaid to a pawnshop within a specified period, the pawnshop shall have the right, upon the expiration of one month, to sell the pledged thing in accordance with the procedure established in paragraphs 2 and 5 of Article 4.219, Articles 4.222 and 4.225 of this Code.


4. After the pledged thing is sold, the right of claim of a pawnshop in respect of the pledgor (debtor) shall extinguish even if the amount received from the sale of the thing is not sufficient to satisfy in full the requirements of the pawnshop as a creditor.

 


CHAPTER XIII

RETENTION OF A THING


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CHAPTER XIII

RETENTION OF A THING

 


Article 4.229. Content of the right of retention


1. A lawful possessor who has the right of claim in respect of the owner of the thing belonging to another shall be entitled to retain the thing until his claim is satisfied.


2. The right of retention may not be exercised before the expiry of the time limit for performance of the obligation.


3. Other laws may specify other rules for the retention of the thing.

 


Article 4.230. Indivisibility of the right of retention

The right of retention shall be indivisible, therefore the possessor may retain the entire thing until his claim is fully satisfied.

 


Article 4.231. Right in respect of fruits of the retained thing


1. A person who enjoys the right of retention may keep the fruits of the retained thing and thus satisfy his claims prior to other creditors.


2. Initially, the interest shall be paid from the proceeds of the fruits of the thing, while claims arising from the principal obligation shall be satisfied subsequently.


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Article 4.232. Custody conditions of the retained thing


1. A person who has the right of retention must keep and preserve the thing in such a way that its safety is ensured.


2. A person who has the right of retention may not lease, pledge or otherwise encumber the thing or use it in accordance with its intended purpose, except for the use that is necessary to preserve the thing unless the law provides otherwise or the person who retained the thing and the owner of the thing have agreed otherwise.


3. Where a person who has the right of retention breaches the duties laid down in paragraphs 1 and 2 of this Article, the debtor shall have the right to apply to the court for the transfer of the thing to him.

 


Article 4.233. Reimbursement of expenses related to the retention of the thing


1. Where the person who has the right of retention has incurred expenses related to the retained thing, he may demand from the owner of the thing to cover the expenses thereof, except when the owner proves that such expenses were not necessary.


2. Where the person who has the right of retention within the time of retention incurs expenses that increase the value of the thing, he may demand from the owner of the thing to pay the amount by which the value of the thing has increased or to cover the expenses in some other way.


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Article 4.234. Limitation of actions in cases of retention

The exercise of the right of retention shall not affect the limitation of actions that has been established for the claim in respect of which the possessor of the thing has the right thereof.

 


Article 4.235. Extinction of the right of retention


1. The debtor, having submitted the adequate proof that he has performed his obligation, shall be entitled to demand the transfer of the thing to him.


2. The right of retention of the thing shall extinguish when the possessor of the thing loses the right of possession, except when, upon the consent of the owner of the thing (the debtor), the thing is leased or pledged to other persons.

 


CHAPTER XIV

ADMINISTRATION OF THE PROPERTY OF OTHERS


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CHAPTER XIV

ADMINISTRATION OF THE PROPERTY OF OTHERS

 


Article 4.236. Scope of application of property administration provisions


1. Provisions of this Chapter shall regulate the activities of each person who administers the property belonging by the ownership right to another, except where this Code or other laws provide for another form of property administration.


2. Administration shall be established by a court order, by law or by transaction. In cases provided for under this Code, the administration may be established by an administrative act.


3. In the course of enforcement proceedings, the administration of the debtor’s property shall be established by a bailiff in accordance with the procedure laid down by the Code of Civil Procedure. In this case, the authorisations provided for in Articles 4.240(4) and 4.243(4) of this Code shall be issued by a bailiff who has established the administration of the debtor’s property.


4. The fact of administration of an immovable thing shall be registered in the public register and the administrator thereof shall be indicated.

 


Article 4.237. Property administrator


1. Any natural or legal person who is permitted by legal acts to provide administrative services may be a property administrator.


2. In concluding transactions, the administrator must indicate that he acts in the capacity of an administrator.


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Article 4.238. Right of the property administrator to remuneration


1. The property administrator shall be entitled to the remuneration fixed in the act establishing administration, except where the administration is gratuitous under the law. Where the remuneration is not fixed in the act establishing administration, it shall be established by the court according to the market value of the services rendered by the administrator.


2. Where the administrator is not paid on time, he shall be entitled to keep the appropriate amount as remuneration for the administrative services rendered from the sum to be paid to the beneficiary, or to retain the property until the time he is paid.


3. Where there are several beneficiaries, they shall be jointly and severally liable for the payment of remuneration to the administrator.


4. A person administering property without any legal grounds shall not be entitled to remuneration.


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Article 4.239. Kinds of property administration


1. A simple property administration shall be established when the administrator performs all the acts necessary to preserve the property or to ensure that it is used for its intended purpose; a full property administration shall be established when the administrator is not only to preserve the property but also to increase it, to manage it in such a way that it generates income, and to use it for the purpose that is in the best interests of the beneficiary.


2. The kind of administration shall be established in the act establishing administration. Where the kind of administration is not established in the act establishing administration, it shall be deemed to be simple administration.


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Article 4.240. Content of simple property administration


1. In the case of simple property administration, the administrator must collect the fruits and revenues of the property, register debts and give valid acquittance for them from the property under his administration, and exercise other rights pertaining to the management and use of the property. The administrator shall be entitled to safely invest the proceeds in accordance with the provisions of this Chapter.


2. Where securities are administered, the administrator shall be entitled to vote and exercise other rights and obligations pertaining to securities.


3. The administrator shall not be entitled to change the intended purpose of the property unless he is authorised to make such a change by the court.


4. With the authorisation of the court, the administrator may transfer the property to other persons for payment or to pledge it where it is necessary for the payment of the debts or the maintenance of the value of the property. The administrator may realise perishable property without an authorisation of the court.

 


Article 4.241. Content of full administration of property

In the case of full property administration, the administrator, in addition to the rights stipulated in Article 4.240 of this Code, may also transfer the property, invest, pledge, charge it with a real right or change its intended purpose.


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Article 4.242. Obligations of the property administrator towards the beneficiary


1. In carrying out his obligations, the administrator must comply with laws and rules of the act establishing administration. The administrator shall not be liable for the normal wear and tear of the property and for the decrease in the value of the property or the destruction of the property due to force majeure.


2. The administrator must discharge his obligations with prudence, honesty and solely in the best interests of the beneficiary. The administrator may not exercise his powers in his own interest or that of a third person.


3. Where the administrator himself is a beneficiary, he must carry out his duties in the common interests of all beneficiaries, acting impartially and with equal respect for and protection of the rights of all beneficiaries.


4. The administrator shall have the right to make claims related to the administration of property as well as to join the case initiated by other persons in relation to the property under administration.


5. In appreciating the extent of civil liability of the administrator for the damage caused, and in view of the fact that the administrator has acted gratuitously and other important circumstances, the court may reduce the resulting damages.


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Article 4.243. Prohibitions in respect of the property administrator


1. The administrator shall be prohibited from carrying out his functions in his own personal interest. The administrator must notify the beneficiary without delay about each conflict of interests.


2. The administrator shall have no right to merge or mingle the property under administration with his own property, to use the  property under administration or information related to administration of the property in his interests, except where permitted by the beneficiary or the act establishing administration.


3. The administrator shall have no right to transfer the property under administration to other persons gratuitously, he may not renounce any rights belonging to the beneficiary in respect of the property under administration.


4. The administrator shall have no right to acquire ownership of the property under administration, except with the authorisation of the beneficiary or the court or where he acquires the property under administration by succession.


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Article 4.244. Obligations of the property administrator or the beneficiary towards third persons


1. The administrator shall not be personally liable towards third persons in respect of obligations arising from property administration, except if he acts on his own behalf.


2. The administrator shall be personally liable towards third persons when he exceeds his powers unless the transaction was subsequently ratified by the beneficiary or a third person was aware of the fact that the administrator acted in excess of his powers.


3. The beneficiary shall be liable towards third persons for the damage caused by the fault of the administrator in carrying out his functions only to the extent of the amount which he has derived from the administrator.


4. It shall be deemed that the administrator exceeds his powers if he has alone performed such actions that could have been only performed jointly with another person, except for cases when he has performed such actions more advantageously than he has been requested to do.


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Article 4.245. Making an inventory of the property under administration and its insurance


1. The administrator shall be bound to make an inventory of the property, to insure the property against theft, fire and other natural disasters, to insure his own civil liability or to otherwise ensure the fulfilment of his obligations only where this is stipulated by law, the act establishing administration or a court judgment. Both the property and the civil liability of the administrator shall be insured at the expense of the beneficiary unless provided otherwise.


2. Where the administrator is bound to make an inventory of the property, such an inventory must contain the following:


1) the indication of the type, value, purpose, location and individual characteristics of things;


2) securities and currency in cash;


3) property-related rights and obligations.


3. The property described in the inventory shall be presumed to be in appropriate condition on the date of the preparation of the inventory unless it is proved otherwise.


4. The administrator shall furnish the inventory to the person or the institution that entrusted him with the administration, while copies of the inventory shall be sent to the beneficiary and other interested persons known to the administrator in relation to the property under administration. Any interested person shall have the right to contest the inventory and demand that a new inventory be prepared.


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Article 4.246. Joint administration of the property


1. Where several administrators are charged with administration of the property, all decisions pertaining to property administration shall be taken by a majority of them unless the law or the act establishing administration requires all of them to act jointly.


2. If several administrators avoid taking a decision, the others may apply to the court for the authorisation to act individually or to modify the decision-taking procedure.


3. An administrator shall be presumed to have approved any decision made in his absence unless he makes his dissent known to the beneficiary and other administrators within a reasonable time after becoming aware of the decision.


4. An administrator may delegate only specific acts to other persons or his representative. An administrator may delegate all his functions only to his co-administrators. An administrator himself shall be liable for the actions performed by such persons.


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Article 4.247. Liability of administrators in joint administration of property


1. All administrators shall be jointly and severally liable for joint administration unless their duties have been allocated by law, a court judgment or an act establishing administration. In that event, each administrator shall be liable for his own administration only.


2. An administrator shall be relieved of liability for the decision taken if he immediately indicates his dissent to his co-administrators and notifies it to the beneficiary. The administrator may be relieved of liability if he proves that, having indicated to co-administrators his dissent, he was unable for serious reasons to make his dissent known to the beneficiary.


3. Administrators shall be liable to the beneficiary for their acts and, where they delegate their duties to other persons, they shall also be liable for the acts of persons to whom they have delegated their duties.

 


Article 4.248. Investment of property under administration


1. Investments of property under administration shall be made in the name of the beneficiary unless otherwise provided by the law or an act establishing administration.


2. Investments shall be presumed sound if the property:


1) is invested into immovable things;


2) is invested into government securities.


3. An administrator who made unsound investments of the property shall be liable for any loss resulting from them.


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Article 4.249. Use and accounting of revenues generated by the property under administration


1. From the revenues generated by the property under administration, the administrator shall be entitled:


1) to pay insurance premiums pertaining to the property under administration;


2) to cover costs of the property repairs and maintenance;


3) to pay taxes payable on the property under administration;


4) to use part of property to cover depreciation expenses;


5) to discharge other obligations related to property administration.


2. The administrator must keep accounts of the revenue and expenditure. At the end of a calendar year, the administrator must render a detailed account of his administration. Where there are several property administrators, they must render a joint account unless their duties have been divided.


3. The administrator must allow the beneficiary to examine the books and other financial documents. Any interested person may apply to the court with a request that the account and the activities of the administrator be audited.


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Article 4.250. Extinction of property administration

Administration shall be extinguished:


1) by extinction of the rights of the beneficiary in the property under administration;


2) by expiry of the term of administration or fulfilment of the condition stipulated in the act establishing administration;


3) by disappearance of the cause that gave rise to the establishment of  administration or by achievement of the purpose of the establishment of administration.


4) by termination of property administration.


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Article 4.251. Extinction of powers of a property administrator


1. The powers of a property administrator shall extinguish:


1) upon his death, upon liquidation of the administrator as a legal person or upon the initiation of bankruptcy proceedings against him;


2) when the administrator renounces his powers;


3) upon declaring the administrator to be legally incapable in this area or of limited legal capacity in this area;


4) upon his replacement;


5) upon termination of administration.


2. The administrator may renounce his powers. He must notify thereof, one month ahead, a person or institution that appointed him, the beneficiary and other administrators if there are several of them.


3. The administrator who has failed to give notice of his resignation in time must cover losses due to his resignation unless he was unable to give notice for serious reasons.


4. The beneficiary or any other person concerned may apply for the replacement of an administrator if the administrator fails to fulfil his functions properly.


5. Upon the death of the administrator, his successors must give notice of the death without delay to the person or institution that appointed him and the beneficiary. His successors must preserve the property as far as possible until the appointment of a new administrator.


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Article 4.252. Consequences of the termination of property administration


1. Upon the termination of administration, the administrator must render a report to the person/institution that appointed him, the beneficiary, as well as to the other administrators, deliver over the property at its location and repay everything that he has received in the performance of his duties, apart from the remuneration for administration.


2. If the administrator concludes a transaction after the termination of administration being unaware of it and when he could not have been aware that the administration had terminated, such a transaction shall be valid and binding on the beneficiary. The same rule shall apply to transactions which were necessary to preserve the property under administration. The beneficiary shall also be bound by transactions contracted with the administrator by third persons who were unaware or could not have been aware that the administration had terminated.

 


CHAPTER XV

REGISTRATION OF THINGS, REAL RIGHTS AND JURIDICAL FACTS


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CHAPTER XV

REGISTRATION OF THINGS, REAL RIGHTS AND JURIDICAL FACTS

 


Article 4.253. Objects of registration


1. Registered things shall be immovable things and movable things by nature which are formed in accordance with the procedure established by law and the principles of registration of their acquisition and transfer are specified by legal acts.


2. Things indicated in paragraph 1 of this Article, encumbrances, real rights and, in cases prescribed by laws, juridical facts must be registered in the public register.


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Article 4.254. Registered juridical facts

The following juridical facts pertaining to things, encumbrances and real rights must be registered in the public register:


1) transactions and decisions by which the legal status of the registered thing is changed or the possibilities for its possession, use and disposal are substantially modified;


2) contracts of co-owners of the registered thing on the commonly owned thing;


3) the inheritance of the registered thing;


4) the seizure of the registered thing;


5) changes of the registered thing (its size, purpose, etc.) and changes of surnames and names of persons and the name of the legal person who has real rights towards it;


6) the fact of the initiation of a civil action on the legal status of the registered thing;


7) final judgments that have an impact on the legal status of the registered thing and respective court orders;


8) the fact of property administration;


9) the fact of the formation of a new thing or the disappearance of the former thing.


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Article 4.255. Legal principles for the registration of juridical facts in the public register

Documents certifying that juridical facts took place, based on which such juridical facts are registered in the public register, shall be the following:


1) a decision of a public authority or a governmental institution;


2) a court judgment, order, decision or sentence;


3) a decision on the seizure of the property by institutions or officials established by laws;


4) a marriage or divorce certificate, certificate on the change of the name or surname, or a death certificate of the property owner;


5) a certificate of the right of inheritance;


6) a notification of the court about the initiation of a civil action on the legal status of the registered thing;


7) written transactions;


8) a contract/deed of the sale of property in a public forced auction;


9) other documents prescribed by laws.


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Article 4.256. Applications to register things, encumbrances, real rights or juridical facts


1. A person wishing to register the thing, encumbrances, real rights or juridical facts shall submit an application in the prescribed form to the data processor of the public register.


2. An application to register the thing and rights of ownership to the thing shall be submitted by the person who has acquired the thing; upon the registration of real rights to the thing of another’s as well as encumbrances, an application shall be submitted by the holder of such rights, a person interested in the registration thereof, or a notary. The application to register juridical facts shall be submitted by an authorised institution or by a person interested in their registration. A person shall submit the application in person or through his representative who has the authorisation issued in accordance with the procedure established by laws.


3. Documents certifying the acquisition of the thing into ownership, encumbrances, the existence of real rights or the occurrence of juridical facts must accompany the application for registration.


4. Upon the submission of accompanying documents, the data processor of the public register must issue a document certifying the fact of submission thereof if the person who has submitted them so requires.


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Article 4.257. Examination of the application to register things, encumbrances, real rights or juridical facts and the adoption of the decision


1. The data processor of the public register shall examine and adopt decisions pertaining to the application to register things, encumbrances, real rights or juridical facts. When the application has been examined, the following decisions may be taken: to satisfy the application, that is, to register things, encumbrances, real rights or juridical facts; or to reject the application, that is, to refuse to register things, encumbrances, real rights or juridical facts. In the cases prescribed by the law, the data processor of the public register may postpone the adoption of the decision, indicating the circumstances that hinder registration and setting a time limit for the elimination of those circumstances.


2. After the adoption of the decision to register things, encumbrances, real rights or juridical facts, documents certifying their registration in the public register shall be issued.


3. The fee for the registration of things, encumbrances, real rights or juridical facts shall be fixed by legal acts.


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Article 4.258. Appeal against the registration and the refusal to register things, encumbrances, real rights or juridical facts

In accordance with the procedure established by laws, the persons concerned may appeal against the registration or the refusal to register things, encumbrances, real rights or juridical facts.

 


Article 4.259. Time of the registration of things, encumbrances, real rights or juridical facts

Things, encumbrances, real rights or juridical facts shall be deemed registered when the respective data are entered into the public register in accordance with the procedure established by laws.


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Article 4.260. Compensation for damage through the fault of the data processor of the public register


1. The damage caused through the fault of the data processor of the public register shall be compensated in accordance with the procedure prescribed by laws. A person must apply to the data processor of the public register for compensation for damage no later than within one month from the date of becoming aware of the damage.


2. The data processor of the public register shall not be held liable for the damage sustained by persons on the grounds of common principles for the exemption from civil liability as well as in cases when persons who have incurred damage:


1) have submitted incorrect data to the data processor of the register;


2) having learnt about an inaccurate or incorrect entry into the public register failed, within one month, to take any measures provided by laws to protect the rights that have been violated.


3. Disputes concerning compensation for damage shall be settled by court.

 


Article 4.261. Right to use the data of the public register

Each natural or legal person shall have the right to use the data of the public register, except for restrictions prescribed by laws. The procedure for and amount of remuneration for the use of public register data shall be determined by the Government.


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Article 4.262. Legal status of the register data

The data entered into the public register shall be deemed accurate and comprehensive until contested in the manner prescribed by laws.


 


BOOK FIVE

LAW OF SUCCESSION

 


CHAPTER I

GENERAL PROVISIONS


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BOOK FIVE

LAW OF SUCCESSION

 


CHAPTER I

GENERAL PROVISIONS

 


Article 5.1. Concept of succession


1. Succession shall mean the devolution of property rights, duties and some other personal non-property rights of a deceased natural person to his heirs by operation of law (intestate) or/and to successors by the will (testate).


2. The following shall be subject to succession: material objects (movable and immovable things) and non-material objects (securities, patents, trade marks, etc.); the bequeather’s rights to property claims and his property obligations; intellectual property (authors’ property rights to works of literature, science and art, neighbouring property rights and rights to industrial property) in cases provided for by laws; and other property rights and duties stipulated by law.


3. The following shall not be subject to succession: personal non-property and property rights inseparable from the person of the bequeather (right to honour and dignity, authorship, right to the author’s name, inviolability of creative work, to the name of the performer and inviolability of performance), right to alimony and benefit paid for the maintenance of the bequeather, right to pension, except in cases provided for by laws.


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Article 5.2. Grounds for succession


1. Succession shall arise by operation of law and by a will.


2. Succession shall arise by operation of law unless the testator has changed and to the extent he has changed the grounds for succession by his testamentary disposition.


3. In the instances when there are no successors either by operation of law or by a will, or none of the successors accepts succession, or when the testator deprives all the heirs of the right to succession, the estate of the deceased shall devolve to the State pursuant to the right of succession.

 


Article 5.3. Opening of succession


1. The time of the opening of succession shall be considered the moment of death of the bequeather, or, where he is declared deceased, the day when the judgment of the court on the declaring of the bequeather to be deceased becomes final, or the day of death indicated in the court judgment.


2. Where it is impossible to determine which of the two or more persons survived each other, they all shall be considered to have died at the same time without giving rise to devolution of rights between them.


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Article 5.4. Place of the opening of succession


1. The place of the opening of succession shall be considered the last place of domicile of the bequeather (Article 2.12 of this Code).


2. Where the bequeather had no permanent place of residence, the place of the opening of succession shall be considered to be:


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1) the place where the bequeather lived most time during the last six months before his death;


2) if the bequeather resided in several places, the place of the opening of succession shall be considered the place of prevailing economic or personal interests of the bequeather (place of location of property or its principal part, when the property is situated in several places; the place of residence of the spouse with whom the bequeather maintained matrimonial relationship during the last six months before his death, or the place of residence of the child who was residing together with the bequeather).


3. Where the place of residence of the bequeather is impossible to determine on the basis of the circumstances indicated in paragraphs 1 and 2 of this Article, the place of the opening of succession may be determined on the basis of the citizenship of the bequeather, his registration, the place of registration of the vehicles belonging to him, and other circumstances.


4. In the event of a dispute, the place of the opening of succession shall be determined by the court at the request of the interested persons by taking  into account all the circumstances.


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CHAPTER II

SUCCESSORS

 


Article 5.5. Persons who have the capacity to inherit


1. The following persons shall have the capacity to inherit:


1) in succession by operation of law: natural persons who survived the bequeather at the moment of his death, children of the bequeather who were born after his death, as well as the State of Lithuania;


2) in succession pursuant to a will: natural persons who survived the testator at the moment of his death, as well as those who were conceived while the testator was still alive and were born after his death; persons upon their birth where named in the will before their conception;


3) in succession pursuant to a will: legal persons which existed at the moment of death of the testator or established in executing the testator’s true intent expressed in his will.


2. The State or municipalities may also be entitled to inherit pursuant to a will.


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Article 5.6. Persons unworthy of inheriting


1. Those persons shall be unworthy of inheriting, either by operation of law or by a will, who by unlawful intentional actions against the bequeather, or against any of his successors, or against the execution of the true intent of the testator expressed in his will, created a legal situation to become successors if it was established within judicial procedure that they:


1) deprived, by malicious intent, the bequeather or his successor of their life, or made an attempt on the life of those persons;


2) intentionally created circumstances which hindered the testator until his death in writing, amendment or revocation of the will;


3) made, by means of deceit, intimidation or coercion, the testator write up, amend or revoke the will made, or forced a successor to renounce succession;


4) concealed, forged or destroyed the will.


2. A successor shall not be unworthy of inheriting in accordance with points 3 and 4 of paragraph 1 of this Article if, before the opening of succession, the will or relevant parts thereof ceased to be valid despite the actions of the successor.


3. Parents shall be unworthy of inheriting after the death of their children by operation of law if their parental authority was restricted by a court judgment, and this judgment was not extinguished or revoked at the moment of the opening of succession.


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Article 5.7. Forfeiture of the right of succession by a spouse


1. The surviving spouse shall forfeit his/her right of succession by operation of law if before the opening of succession:


1) the bequeather had applied to the court for the dissolution of marriage because of the fault of the surviving spouse, and the court had established a ground for the dissolution of marriage;


2) separation had been established by the court;


3) there was a ground for declaring the marriage null and void if a suit had been brought for declaring the marriage null and void. This point shall not apply in respect of a spouse who was not at fault for the marriage being declared null and void.


2. The grounds for declaring marriage null and void provided for in points 1 and 3 of paragraph 1 of this Article shall be established by the court before the opening of succession, or already after the opening of succession.

 


Article 5.8. Challenging of the right of succession

A person claiming inheritance may challenge the lawfulness of the acceptance of succession as well as the issued certificate of the right of succession by bringing an action against the person who has accepted succession within a period of one year from the day of the opening of succession, or from the day when he became aware or ought to have become aware that the succession was accepted by another person.


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Article 5.9. Effects of the challenging of the right of succession


1. When the court judgment by which the person claiming inheritance is not acknowledged an heir with the right of succession becomes final, this person shall be considered as not having accepted succession.


2. Where the action has been brought by an heir with the right of succession, he shall be considered as having accepted the succession, except in cases where this action is brought in the interests of other heirs.


3. Other heirs who ought to acquire the right of succession upon the court judgment, indicated in paragraph 1 of this Article, becoming final shall have the right to accept succession within three months from the day when the court judgment becomes final.


4. In respect of new heirs, heirship shall be considered open from the moment of the opening of succession (Article 5.3 of this Code).

 


Article 5.10. Persons not entitled to testamentary reservation

In the event where the beneficiary of testamentary reservation has performed actions indicated in paragraph 1 of Article 5.6 of this Code, he shall forfeit his right to the testamentary reservation.

 


CHAPTER III

SUCCESSION BY OPERATION OF LAW (INTESTATE SUCCESSION)


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Article 5.11. Order of intestate succession


1. In intestate succession, the following persons shall be heirs to inheritance in equal shares:


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1) first degree descendants: bequeather’s children (including adopted children) and bequeather’s children born after his death;


2) second degree descendants: bequeather’s parents/adoptive parents and grandchildren;


3) third degree descendants: bequeather’s grandparents both on the father’s and mother’s side, bequeather’s great grandchildren;


4) fourth degree descendants: bequeather’s brothers and sisters, great grandparents both on the father’s and mother’s side;


5) fifth degree descendants: children of the bequeather’s brothers and sisters (nephews and nieces), as well as brothers and sisters of the bequeather’s parents (uncles and aunts);


6) sixth degree descendants: children of the bequeather’s parents’ brothers and sisters (cousins).


2. Second degree heirs shall inherit by operation of law only in the absence of the first degree heirs, or in the event of the latter’s non-acceptance or renunciation of succession, as well as in cases where the first degree heirs are deprived of the right to inherit. The third, fourth, fifth and sixth degree heirs shall inherit in the absence of heirs of superior degree or in the event of the latter’s renunciation of


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fourth, fifth and sixth degree heirs shall inherit in the absence of heirs of superior degree or in the event of the latter’s renunciation of succession or deprivation of the right to succession.


3. Adopted children and their descendants worthy to inherit after the death of their adoptive parent or his relatives shall be equalled to the children of the adoptive parent and their descendants. They shall not inherit by operation of law after the death of their parents and other blood relatives of a higher degree in the line of descent, as well as after the death of their blood brothers and sisters.


4. Adoptive parents and their relatives worthy to inherit after the death of their adoptive child or his descendants shall be equalled to the parents and other blood relatives. Parents of the adopted child and other blood relatives of a superior degree in the line of descent shall not inherit by operation of law after the death of the adopted child or his descendants.


5. Entitled to inherit by operation of law shall be the children of the bequeather born to married parents or to parents whose marriage has been declared null and void, as well as the children born out of wedlock with their paternity established in accordance with laws.


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Article 5.12. Succession by the right of representation

The bequeather’s grandchildren and great-grandchildren shall inherit by operation of law alongside with correspondingly the first and second degree heirs entitled to inherit in the event of the predecease, at the time of the opening of succession, of any of their parents who would have been a heir. They shall be entitled to equal shares of that part of estate which would have been inherited by their deceased father or mother pursuant to intestate succession.

 


Article 5.13. Spouses’ right of inheritance

The surviving spouse of the bequeather shall be entitled to inherit pursuant to intestate succession or alongside with the heirs, if any, of either the first or second degree of descent. Together with the first degree heirs, he shall inherit one fourth of the inheritance in the event of existence of not more than three heirs apart from the spouse. In the event where there are more than three heirs, the spouse shall inherit in equal shares with the other heirs. If the spouse inherits with the second degree heirs, he/she shall be entitled to a half of the inheritance. In the event of absence of the first and second degree heirs, the spouse shall inherit the whole inheritable estate.


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Article 5.14. Inheritance of house furnishing and household equipment

Ordinary house furnishing and household equipment shall be devolved to the intestate heirs irrespective of their degree of descent and the share of inheritance if they resided together with the bequeather for a period of at least one year before his death.

 


CHAPTER IV

INHERITANCE BY WILL (TESTATE SUCCESSION)

 


Article 5.15. Testamentary capacity


1. A will may be made exclusively by the testator himself.


2. A will may be made only by a person who is legally capable in this area and able to comprehend the importance and consequences of his actions.

 


Article 5.16. Nullity of a will or its parts


1. A will shall be null and void if:


1) made by a person legally incapable in this area;


2) made by a person with limited legal capacity in this area;


3) its content is unlawful and impossible to understand.


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2. A will may be declared null and void on other grounds of nullity of transactions.


3. A perished will shall have no effect. The content of such a will may not be established by judicial procedure.


4. A testator may not authorise another person to establish or alter the content of a will after the death of the testator.

 


Article 5.17. Contesting of a will


1. An action for declaring a will or separate parts thereof null and void may be brought only by other intestate or testate successors who would be entitled to inherit if the will or separate parts thereof were declared null and void.


2. On declaring a later made will null and void, the previous will shall not become effective, except in cases where a later will was declared null and void because it had been made under coercion or real threat, likewise, where it had been made by a person declared by the court to be legally incapable in this area or of limited legal capacity in this area.


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Article 5.18. Conditions for making a will


1. A testator shall make a will freely, without coercion or error. Ordinary persuasion or request of interested heirs for a will to be made in their favour shall not be considered coercion and shall not affect the validity of the will.


2. Mistakes in the text of the will, incorrect naming of persons, or the fact that some characteristics or state of a certain person or thing has changed or disappeared shall have no effect if the true intent of the testator is clear from the content of the will.


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1. Any natural person may bequeath all his property or a part thereof (including ordinary house furnishing and household equipment) to one or several persons irrespective of whether they are his heirs by operation of law, as well as to the State, municipalities or legal persons.


2. A testator may bequeath all his property or a part thereof to legal persons which will have to be established in executing the will, as well as to natural persons not yet conceived and born.


3. A testator may by his will disinherit one, several or all of his heirs.


4. In the event where the testator failed to indicate what share of his estate he bequeathed to each of his successors by the will, the estate shall be divided in equal shares to all of them.


5. In the event where the inheritable estate is distributed in the will in such a way that all the shares in their totality exceed the amount of the whole estate, the share of each successor shall be correspondingly reduced.


6. In the event where the totality of all the shares is smaller than the amount of the whole estate, taking into account the content of the will, the shares of the estate devolved upon each of the successors shall be proportionally increased or the remaining property shall be devolved by the operation of law.


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Article 5.20. Right to the mandatory share of the inheritance


1. The testator’s children/adoptees, spouse, parents/adoptive parents who were in need of maintenance at the time of the testator’s death shall inherit, irrespective of the content of the will, a half of the share that each of them would have been entitled to by operation of law (mandatory share) unless more is bequeathed by the will.


2. The mandatory share shall be determined by taking into account the value of the inheritable estate, including ordinary house furnishing and household equipment.

 


Article 5.21. Appointment of another successor

A testator shall have the right by his will to designate another successor in case the successor appointed by the will died before the opening of succession or renounced the succession. The testator may likewise appoint another successor to the secondary successor in case the secondary successor died before the opening of succession or renounced the succession. The number of the appointments of other successors shall not be limited.


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Article 5.22. Inheritance of the part of estate not bequeathed by a will


1. The part of the testator’s estate which remained not included into a will shall be divided in equal shares between the intestate heirs who inherit in accordance with the rules provided for in Articles 5.11 to 5.14 of this Code.


2. These heirs shall also include the intestate successors who have a share of inheritable estate bequeathed to them by a will unless otherwise provided for by the will.


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1. The testator shall have the right to obligate a testate successor to fulfil a certain obligation (testamentary reservation) for the benefit of one or several persons, while these persons shall acquire the right to demand fulfilment of this obligation. Beneficiaries of the testamentary reservation may be intestate heirs as well as any other persons.


2. The successor authorised by the testator must fulfil the testamentary reservation without exceeding the value of the property inheritable by him after the claims of the testator’s creditors have been satisfied.


3. If the testate successor, authorised to fulfil the testamentary reservation, is entitled to the mandatory share of the inheritance, he shall fulfil the testamentary reservation without exceeding the value of the property inheritable by him which is bigger than his mandatory share.


4. In the event where the successor authorised to fulfil testamentary reservation dies before the opening of succession or renounces the succession, the obligation to fulfil the testamentary reservation shall be alienated to the other successors who have received the share of that successor.


5. In the event where the executor of the testamentary reservation is not specified in the will, the testamentary reservation shall be excluded from the inheritable estate until the shares of the property inheritable by the successors have been determined.


6. The testamentary reservation shall become invalid in the event of the death of its beneficiary before the opening of the succession.


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Article 5.24. Acceptance of the testamentary reservation


1. The beneficiary of the testamentary reservation shall have the right to accept the testamentary reservation within the period of three months from the day when he became aware or ought to have become aware of his entitlement to the testamentary reservation.


2. The beneficiary of the testamentary reservation shall inform about his acceptance thereof the executor of the will/administrator of inheritance, the successor who has accepted succession and is authorised to fulfil the testamentary reservation, or the notary of the place of the opening of succession. In the event where the testamentary reservation is related to the right to immovable property, the application shall in all cases be filed with the notary. The notary shall issue a certificate of the right to inheritance and the testamentary reservation shall be registered in the public register.


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1. In the event where the subject matter of the testamentary reservation is a thing defined by its individual features, the beneficiary of the testamentary reservation, having accepted thereof, shall acquire the right of ownership to this thing from the moment of the acceptance of succession. From that moment, the thing shall be transferred to the beneficiary of the testamentary reservation together with all the rights and duties relating to this thing which belonged to the testator. The accessories of the principal thing shall also belong to the beneficiary of the testamentary reservation.


2. In the even where the subject matter of the testamentary reservation is composed of claims resulting from obligations, all the supplementary claims which had to be fulfilled before the death of the testator shall also belong to the beneficiary of the testamentary reservation.


3. In the event where the subject matter of the testamentary reservation is movable things defined as to specific features, such testamentary reservation must be fulfilled irrespective of the existence of such things in the inheritance. If there are several things of this kind, the right of choice shall belong to the beneficiary of the testamentary reservation unless otherwise provided for by the will.


4. The testator shall have the right to obligate a successor, to whom an immovable thing (land, house, apartment, etc.) or a private (personal) enterprise is devolved, to allow another person, for a certain period or for life, to use the immovable thing or its part,


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enterprise is devolved, to allow another person, for a certain period or for life, to use the immovable thing or its part, or to transfer the revenue, or a part thereof, derived from that property.


5. In the event where the testator by his testamentary reservation established maintenance for somebody without specifying its content, such person shall be entitled to board, accommodation, clothing and medical care, and those who study shall be entitled to have their study expenses paid for the whole duration of their study, but not longer than until they reach the age of 24.


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Article 5.26. Bequeathing of property to society for useful and charitable purposes


1. A testator may bequeath his whole estate, its part, or an individual thing to society for useful and charitable purposes. A legal person to be established in executing the wish of the testator may be appointed as successor to such property. The testator may obligate his successor or the executor of the will to establish such a legal person.


2. In the event where the successor or the executor of the will fails to take any action for the establishment of the legal person, the interested persons may apply to the court with a request to appoint an administrator and obligate the latter to establish the legal person stipulated in the will.


3. Where the social need for which the estate was intended disappears or the property cannot be used for the purpose indicated in the will, and in absence of any related instructions from the testator, the question of further use of such property shall be decided by the court of the place of the opening of succession. Such property must be used for the purposes similar to those indicated by the testator.

 


Article 5.27. Types of wills

Wills may be official and private.


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1. Official wills are such wills which are made in writing in two copies and attested by the notary or an official of a consulate of the Republic of Lithuania in the relevant state.


2. Public wills of persons with hearing and speech impairment shall be made with the participation of a person who understands sign language and is trusted by the testator, except in cases where the person with hearing and speech impairment is literate and can read the written up will and confirm in writing of his awareness of the content of the will.


3. The place and time when the will was made shall be indicated therein. The written up will shall be read to the testator alone or with the participation of witnesses. The will shall be signed by the testator himself. The will shall be attested and registered in the Notarial Register in his presence. One copy of the will shall be handed in to the testator, the other shall remain with the institution which has attested it. The information about the making of the will and its content shall be confidential.


4. If the will possessed by the testator or any other person fails to conform to the will deposited with the notary, in case of dispute preference shall be given to the will deposited with the notary, providing that it does not contain any corrections, deletions or erasures that were not agreed upon in accordance with the established procedure.


5. The fact of making an official will may not be


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or erasures that were not agreed upon in accordance with the established procedure.


5. The fact of making an official will may not be disputed.


6. The following shall be equalled to official wills:


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1) wills of persons undergoing treatment in hospitals or any other institutions of medical care and disease prevention or in sanatoriums, as well as wills of persons living in the social care homes for the elderly or disabled people, attested by the chief doctors, their deputies for medical matters or doctors on duty of these hospitals, institutions of medical care or sanatoriums, as well as by the directors or chief doctors of social care homes for the elderly or disabled people;


2) wills of persons sailing in seagoing vessels or ships of internal waters flying the flag of the Republic of Lithuania, attested by the masters of those ships;


3) wills of persons participating in surveyor, research, sport or any other expeditions, attested by the heads of those expeditions;


4) wills of soldiers, attested by the commanders of their units, formations or institutions and military schools;


5) wills of inmates of the places of confinement, attested by the heads of these institutions;


6) wills attested by the wardens of the testator’s place of residence.


7. Persons indicated in paragraph 6 of this Article must transfer the attested will to the notary as soon as possible in accordance with the procedure determined by the Minister of Justice.


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Article 5.29. Signing of wills by another person

In the event where the testator due to his physical disabilities, illness or any other reasons is unable to sign the will himself, it may be signed, upon the testator’s request and in the presence of the notary or any other official authorised to attest the will and at least two witnesses, by another legally capable natural person who is not a testate successor, by concurrently indicating the reason for which the testator is not able to sign the will himself. Witnesses must also put their signatures in the will.


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1. A private will shall be a will written up in hand by the testator, indicating the first name and surname of the testator, the date (year, month, day) and place where the will was made, expressing the true intent of the testator and signed by him. A private will may be written up in any language. Failure to indicate the date and place of the making of the will shall render it invalid only in those cases where it is impossible to determine the date and place of the making of the will by any other way, or they are not possible to infer from other circumstances.


2. Corrections introduced by the hand of the testator and the deletions explained by him shall not render the will invalid. Such conditions shall be valid which were mistakenly deleted by the hand of the testator who later made an inscription by his hand testifying that those conditions were deleted by mistake. The will shall be valid if there is some word omitted by mistake, or a word contains a spelling mistake; the relevant conditions shall also be valid, providing that their meaning is not obscure.


3. A will which is undeniably unfinished and unsigned shall be null and void.


4. If a will contains an inscription about the testator’s intent to supplement it in the future though he failed to accomplish that, such will shall be valid, providing that it can be executed without the intended supplement.


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Article 5.31. Depositing of a private will


1. A testator may deposit his will with the notary or a consular officer of the Republic of Lithuania in a foreign state. In accepting a will for deposit, the identity of the testator must be established.


2. A deposited will shall be equalled to an official will if the deposit was performed pursuant to the following requirements:


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1) the will was deposited by the testator himself who declared that the will expressed his final true intent;


2) the will was deposited in a sealed envelope, the measures for the protection of the envelope against damage were enforced, and both the testator and the person accepting the will put their signatures on the envelope;


3) an act on the acceptance of the will for deposit has been written up, indicating that the requirements specified in point 1 and 2 of paragraph 2 of this Article have not been violated, as well as providing a description of the envelope, measures for the protection of the envelope against damage, an indication of the testator’s name, surname, personal number, and his place of residence, the place and date of the making of the will and its kind, and the official position, name and surname of the person who accepted the will for deposit. The act shall be signed by the testator and the official accepting the will for deposit. The testator shall be issued with a copy of the act.


3. The accepted will shall be kept in the safe of the institution of deposit. The testator may take the will back at any time. The will may also be handed in to an agent of the testator under a special authorisation of the testator.


4. In the event where a private will was not transferred for deposit in accordance with the procedure established in this Article, it must be confirmed by the court


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In the event where a private will was not transferred for deposit in accordance with the procedure established in this Article, it must be confirmed by the court within a period of one year from the death of the testator. In this case, only a will confirmed by the court shall be valid.


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Article 5.32. Register of wills


1. The data controller of the Register of wills made in the territory of the Republic of Lithuania shall be the Ministry of Justice, and the data processor of this Register shall be designated by the Government.


2. Notaries and consular officers must notify the data processor of the Register of wills within three working days about the wills that have been attested, accepted for deposit or revoked. The notification shall include the testator’s name, surname, personal number, and his place of residence, the place and date of the making of the will, its kind, and the place of deposit. The content of the will shall not be divulged.


3. After the death of the testator, the data of the Register may be transferred to the court, notary and other interested persons.


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Article 5.33. Announcement of the will


1. As soon as the notary of the place of the opening of succession becomes aware of the death of the testator, he shall establish a date for the announcement of the will and notify about it the known successors and other interested persons. Where the envelope containing the will has been secured by protective measures against damage, a record must be drawn up specifying therein whether the envelope and the protective measures against damage are intact. Where there are several wills, all of them shall be announced.


2. After having announced the will, the notary must take all the measures necessary to establish the place of residence of all the successors and other interested persons who were not present when the will was announced, and without delay inform them about the content of the will.

 


Article 5.34. Time limit for keeping the will in deposit

Where a will is kept in deposit for a period of over 30 years, the depository institution must verify, by the means available, whether the testator is still alive. If it becomes clear that the testator is dead, the envelope with the will shall be opened and the will announced.


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Article 5.35. Revocation, supplementation and alteration of a will


1. The testator shall have the right at any time to alter, supplement or revoke a will made by him by drawing up a new will, or not to make a will.


2. A will made at a later time shall annul the whole previous will or a certain part thereof which contradicts the later will. This provision shall not apply in respect of a joint will of spouses.


3. The testator may also revoke an official will by filing an application with the depositor of the will or the institution which attested it. The signature of the testator on such application must be witnessed in accordance with the procedure established by laws.

 


Article 5.36. Conditions of a will


1. The testator may appoint a successor or a beneficiary of the testamentary reservation by specifying one or several conditions to be fulfilled by them in order to inherit.


2. Unlawful conditions, or conditions contrary to the usages, or those violating the requirements of good morals shall be null and void.


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Article 5.37. Execution of a will


1. A will shall be executed by the executor of the will or a successor appointed by the testator, or by an administrator of inheritance appointed by the court.


2. No one may be appointed executor of a will against his wish, however, the person who has assumed the duties of the executor of the will may not relinquish those duties without important reasons.


3. The testator may appoint one or several executors of the will. The testator may likewise appoint a secondary executor of the will in case the primary executor is not able to fulfil his duties. In this event, the consent of the secondary executor shall be required, either inscribed in the will itself or expressed in a statement appended to the will.


4. The person who has signed the will on behalf of the testator may not be an executor of the will.


5. In the event where the testator failed to appoint an executor, or the appointed executor or a successor are not able to fulfil their duties, the district court of the place of the opening of succession shall appoint an administrator of inheritance to perform all the actions necessary for the execution of the will.


6. A person who has embarked upon the execution of a will shall have no right to relinquish those duties without important reasons.


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1. The executor of the will shall perform all the actions necessary for the execution of the will. Pending the appointment of the administrator of inheritance or the establishment of the successors, the executor of the will shall perform the functions of a successor, i.e. possess the inheritance, compile the inventory of the inheritance, pay the debts of the inheritance, recover the debts from the testator’s debtors, provide maintenance for the successors who are entitled to it, perform the search of successors, establish whether the successors accept the inheritance, etc. In his activity, the executor shall be guided by the will. In executing the will, the executor shall consult with the successors. Any dispute concerning the execution of the will shall be decided by the district court of the place of the opening of succession.


2. In performing his duties, the executor of the will must act with the same diligence as in taking care of his private interests. Where the executor of the will receives payment for his work, he shall be liable to the successors and other interested persons for any loss caused by his negligent actions.


3. Where the testator has appointed several executors of the will without clearly defining their corresponding rights and duties, they shall act jointly. Any disagreement between them over the execution of the will shall be decided in judicial proceedings. The executors shall be jointly liable for the actions performed upon their mutual consent.


4. Where one of the


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be decided in judicial proceedings. The executors shall be jointly liable for the actions performed upon their mutual consent.


4. Where one of the executors has been given a specific assignment by the testator, or authorised with execution of a certain part of the will, such executor shall be liable solely for his own actions.


5. Expenses incurred in the execution of the will shall be covered from the inherited estate.


6. The executor shall perform his duties gratuitously where nothing has been specified by the testator in his will concerning payment.


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Article 5.39. Inventory of inheritance


1. Having assumed the management of the inheritance, the executor of the will or the administrator of the inheritance must immediately compile an inventory of the inheritance, listing the whole inheritable estate, as well as all the amounts due to and owed by the testator. A successor, who expresses such a wish, may participate in the compilation of the inventory of the property.


2. The executor of the will or the administrator of the inheritance shall have the right upon his discretion, or the obligation upon the demand of a successor, to apply to the bailiff with a request to compile the inventory. The executor of the will or the administrator of the inheritance shall apply to the bailiff upon the issuing by the notary of an executory assignment concerning the compilation of the inventory.


3. Expenses incurred in the compilation of the inventory of inheritance shall be covered from the inherited assets.


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Article 5.40. Possession of inheritance and its duration

The testator may authorise the executor of the will to possess the inheritance, accepted pursuant to the established procedure, without casting any further obligations on him, or authorise the possession of inheritance after other assignments of the testator have been fulfilled. The duration of such possession may be specified in the will by indicating a definite time limit or a certain event (attainment of a certain age by the successor, death of a successor, marriage, etc.). Such time limit may not exceed the period of 20 years from day of the opening of succession.

 


Article 5.41. Report of the executor of the will

Having fulfilled the execution of the will, the executor of the will or the administrator of the inheritance must, upon the request of the successors, provide them with the report. Where the will is being executed for a period exceeding one year, and the possession of the inheritance is performed by the executor of the will or the administrator (Article 5.40 of this Code), such reports must be submitted every year.


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Article 5.42. Removal of the executor of the will or the administrator of the inheritance

Where the executor of the will or the administrator of the inheritance improperly fulfils his duty, violates the interests of the successors, beneficiaries of the testamentary reservation, of the testator’s creditors and those of other interested persons, the court of the place of the opening of succession shall have the right, upon the demand of the latter persons, to remove the executor of the will and appoint an administrator of the inheritance, to replace the administrator appointed by the court.

 


CHAPTER V

JOINT WILL OF SPOUSES

 


Article 5.43. Concept of a joint will of spouses

By their joint will, the spouses appoint each other as the successor and, after the death of one of the spouses, the whole property of the deceased (including the part of the common property of the spouses therefrom) shall be inherited by the surviving spouse, except the mandatory share of succession (Article 5.20 of this Code).


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Article 5.44. Making a joint will of spouses


1. A joint will of spouses may be made exclusively by spouses. Such will shall be signed by both spouses in the presence of a notary or any other person attesting the will.


2. A joint will of spouses shall be made exclusively as an official will (Article 5.28 of this Code).

 


Article 5.45. Content of a joint will of spouses


1. By testamentary disposition, each of the spouses shall provide for the devolution of his/her whole property to the other spouse.


2. A successor may be appointed by the will to inherit the property after the death of the surviving spouse.


3. A will may provide for a testamentary reservation awarded from the property of one of the spouses after his/her death, or from the common property of the spouses after the death of the surviving spouse.


4. The spouses may bequeath their whole property or a part thereof to society for worthy causes or to charity. Such a direction of the will may be effectuated from the property of one of the spouses after his/her death or from the common property of the spouses after the death of the surviving spouse.


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Article 5.46. Revocation and invalidity of a joint will of spouses


1. Each of the spouses shall be entitled to revoke the expression of his/her intention before the opening of the succession within the same procedure as the drawing up of the will. In this event, the expression of the intention of the other spouse shall lose its legal effect as well.


2. The wills drawn up by the spouse without previous revocation of the joint will of spouses shall be null and void.


3. A joint will of spouses shall be rendered invalid by the dissolution of marriage or by filing a suit (lodging an application) for the dissolution of marriage, or by the consent of the spouse to the dissolution of marriage before the opening of succession.

 


Article 5.47. Obtaining the deposited will

The institution which has attested the will or deposited it for safekeeping may issue the will only upon the request of both spouses.

 


Article 5.48. Announcement of a joint will of spouses

Upon the death of one of the spouses, only the intent of that spouse shall be revealed to the interested successors in accordance with the procedure established in Article 5.33 of this Code; the intent of the other spouse shall not be revealed.


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Article 5.49. Renunciation of inheritance under a joint will of spouses


1. Upon the death of one of the spouses, the other spouse shall have no right to modify a joint will. He shall have the right to renounce the acceptance of succession. In this event, the estate of the deceased spouse shall be devolved upon his/her heirs by operation of law, and the surviving spouse shall acquire the right to make a new will upon his/her discretion.


2. Such refusal on the part of the surviving spouse to accept succession shall have no effect upon the right of the beneficiary of the testamentary reservation from the estate of the deceased spouse to a testamentary reservation which is issued by intestate heirs.


3. Where the surviving spouse renounces succession, the successor appointed by the joint will to inherit after the death of the surviving spouse shall lose the right of succession under the joint will of spouses.

 


CHAPTER VI

ACCEPTANCE OF SUCCESSION AND LIABILITY FOR THE DEBTS OF THE BEQUEATHER


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CHAPTER VI

ACCEPTANCE OF SUCCESSION AND LIABILITY FOR THE DEBTS OF THE BEQUEATHER

 


Article 5.50. Acceptance of succession


1. In order to acquire succession, a successor must accept it. Acceptance may not be in part, or subject to conditions or exceptions.


2. A successor shall be deemed to have accepted succession when he actually starts possessing the estate or when he files an application on the acceptance of succession with the notary of the place of the opening of succession.


3. Actions indicated in this Article must be performed within three months from the day of the opening of succession; however, the legal consequences specified in paragraph 2 of this Article shall arise only in the absence of the actions of the heir(s) of superior degree by operation of law or of the heir(s) of superior degree by operation of a will hereunder the succession has been accepted.


4. No longer effective from 8 July 2015.


5. Inheritance devolved to the successors born after the opening of succession shall be accepted within three months from the day of their birth.


6. The notary must inform the data processor of the Register of Wills about the acceptance of succession within three working days from the date of acceptance.


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Article 5.51. Acceptance of succession after the actual start of possession of the property


1. A successor shall be deemed to have accepted the inheritance if he has started to possess the estate, treating it like his own property (possesses, uses and disposes of it, takes care of it, pays taxes, has applied to the court expressing his intention to accept the inheritance and appoint the administrator of inheritance, etc.). A successor, who has started to possess any part of the inheritance, shall be deemed to have accepted the whole inheritance.


2. A successor, who has started to possess the estate, shall have the right, within the period established for the acceptance of succession, to renounce succession by filing an application with the notary of the place of the opening of succession. In this case, the successor shall be deemed to have possessed the inheritance in the interests of other successors.


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Article 5.52. Liability for the debts of the bequeather by the successor who has accepted inheritance by starting to possess the estate or by filing an application with the notary


1. The successor who has accepted succession by taking over the possession of the estate or by filing an application with the notary shall be liable for the debts of the bequeather with his whole property, except in cases provided for in this Code. Where the estate was accepted by several successors in the manner indicated in this paragraph, they shall all be jointly liable with their whole property for the debts of the bequeather.


2. Where the successor indicates in the application for the acceptance of inheritance, filed with the notary, that he wishes to accept succession in accordance with the inventory, the inventory shall be compiled and the liability of the successor for the debts of the bequeather shall be defined in accordance with the procedure laid down in Articles 5.53 and 5.54 of this Code.


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1. A successor who has accepted inheritance in accordance with the property inventory compiled by the bailiff shall be liable for the debts of the bequeather only with the inherited property. In the event where at least one of the successors has accepted the inheritance in accordance with the property inventory, all the other successors shall be deemed to have accepted the inheritance in accordance with the inventory.


2. For the acceptance of inheritance in accordance with the property inventory, the successor shall apply with an application to the notary of the place of the opening of succession. Upon the receipt of the said application, the notary shall henceforth issue to the successor an executory assignment regarding the compilation of the property inventory. Such assignment shall be executed in accordance with the procedure laid down by the Code of Civil Procedure of the Republic of Lithuania. The successor shall, not later than within two weeks, submit the executory assignment issued by the notary regarding the compilation of the property inventory to any bailiff acting in the territory of operation of the district court of the place of opening of succession. The executory assignment regarding the compilation of the property inventory not submitted to the bailiff within two weeks from the issuing thereof shall become invalid and any successor shall be entitled to apply to the notary for the issuing of a new executory assignment.


3. The bailiff shall compile the property inventory not later than within one month from the receipt of the documents referred to in paragraph 2 of this Article. In cases


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bailiff shall compile the property inventory not later than within one month from the receipt of the documents referred to in paragraph 2 of this Article. In cases where the inherited estate is located in several places or there is a considerable number of creditors of the bequeather, the bailiff must compile the property inventory not later than within three months.


4. A successor must furnish all the data necessary for the compilation of the property inventory of the bequeather’s estate.


5. The property inventory must contain:


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1) a list of all the things comprising inheritance, indicating their value and the circumstance necessary for the determination of their value;


2) indication of all known obligatory rights and duties of the bequeather, specifying the bequeather’s creditors and debtors.


6. The property inventory shall be signed by the bailiff and the successor who participated during the compilation of the inventory. At the end of the inventory, there must be an inscription signed by the successor, equivalent to an oath, to testify that the inventory includes the whole estate of the bequeather known to the successor as well as all of the bequeather’s obligatory claims and duties.


7. Upon becoming aware, after the compilation of the property inventory, about property or obligatory claims and duties not included into the property inventory, the successor must immediately apply to the notary for the issuing of an executory assignment regarding the supplementing of the property inventory. The successor shall, not later than within three working days, submit the executory assignment issued by the notary regarding the supplementing of the property inventory to any bailiff acting in the territory of operation of the district court of the place of opening of succession. On the basis of the data submitted by the successor, the bailiff must supplement the property inventory not later than within three weeks.


8. The compilation of the property inventory may also be requested by the creditors of the bequeather. The creditors of


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within three weeks.


8. The compilation of the property inventory may also be requested by the creditors of the bequeather. The creditors of the bequeather shall have the right to participate during the compilation of the property inventory themselves or to authorise any other person to participate during the compilation of the property inventory.


9. The bailiff must ensure access to the property inventory for anyone who demonstrates a legitimate interest in access to the inventory.


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Article 5.54. Incorrect inventory

Where during the compilation of the inventory the successor due to his fault failed to indicate the whole estate comprising inheritance, concealed debtors of the bequeather, on his initiative a non-existing debt was included into the inventory, the inventory was not supplemented in accordance with the procedure laid down in paragraph 7 of Article 5.53 of this Code, or the successor failed to fulfil the duty set out in paragraph 4 of Article 5.53 of this Code, the successor concerned shall be liable for the debts of the bequeather with his whole property.


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1. Where the inherited estate is a private (personal) enterprise, a farmstead, or the bequeather’s debts might exceed the value of the inheritance, the successor, having accepted succession, may apply to the court of the place of the opening of succession with a request to appoint an administrator for the property of the succession, or request to appoint an administrator for the property of the succession and decide on the issue of auction or initiation of bankruptcy proceedings. In this event, the debts of the bequeather shall be paid only from the inheritance.


2. Administration of the property of the succession shall be established by a ruling of the district court located in the place of the opening of succession. By this ruling, the court shall appoint an administrator of the property of the succession and determine his remuneration.


3. No administration of the property of the succession shall be established where the inheritance is not significant, and the costs of administration would exceed the value of the inheritance, or where the major part of the inheritance would have to be used for the payment of administration costs. Administration of the property of the succession shall be abolished where it becomes clear that the costs of administration would exceed the value of the inheritance.


4. The administrator of the property of the succession shall have the same rights and duties as the executor of the will (Article 5.38 of this Code); the provisions of Chapter XIV of Book Four of this Code shall also apply


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as the executor of the will (Article 5.38 of this Code); the provisions of Chapter XIV of Book Four of this Code shall also apply mutatis mutandis in this respect.


5. Where there are several successors, they shall file a joint application for the appointment of an administrator for the property of the succession. No administrator of the property of the succession shall be determined where the successors have taken over the possession of the inheritable estate.


6. Where in the events indicated in this Article no administration of the property is established, or it is abolished, an estate inventory shall be compiled and the debts of the bequeather shall be paid only from the property of the succession.


7. Any disputes among successors concerning the administration of the property of the succession shall be decided by the court by passing a corresponding ruling.


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Article 5.56. Implementation of the right to succession of persons legally incapable in this area or persons with limited legal capacity in this area

Succession on behalf of persons legally incapable in this area shall be accepted by their parents or guardians. Persons with limited legal capacity in this area shall accept succession exclusively upon the consent of their parents or curators. Where a curator does not give his/her consent, the consent to accept succession may be granted by the court at the request of a person with limited legal capacity in this area.

 


Article 5.57. Renewal of the time limit for the acceptance of succession


1. The time limit established in Article 5.50 of this Code for the acceptance of succession may be renewed by the court where it is determined that the time limit has been missed due to important reasons. Succession may be accepted after the expiry of the time limit likewise without the application to the court where all the other successors who have accepted the succession give their assent.


2. In the instances provided for in paragraph 1 of this Article, the successor who has missed the time limit for the acceptance of succession shall be entitled only to that part of the estate belonging to him and accepted by other successors or devolved to the State which remained in kind, as well as the proceeds from the realisation of the other part of the estate belonging to him.


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Article 5.58. Transference of the right to accept succession


1. Where a successor entitled to inherit by operation of law or by a will dies after the opening of succession without having been able to accept thereof within the established time limit (Article 5.50 of this Code), the right to accept succession shall be transferred to his heirs.


2. This right of a deceased successor may be implemented by his successors on general grounds within three months from the day of the opening of succession in their respect.


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Article 5.59. Rights of a successor who has started possessing the inheritable estate before the appearance of other successors


1. A successor who has started to possess the inheritable estate in the event where there are other successors shall have no right to dispose of (to sell, pledge, etc.) the inheritable property before the expiry of three months from the day of the opening of succession, or until he receives the certificate of the right to inheritance.


2. Before the expiry of the indicated time limit, or until he gets the certificate of the right to inheritance, the successor shall only be entitled to:


1) pay the expenses for the medical treatment and care of the bequeather, as well as his funeral costs and the expenses for taking care of the grave;


2) provide maintenance to natural persons who were maintained by the bequeather;


3) ensure normal functioning of the enterprise/farm;


4) satisfy requirements arising from employment relationships;


5) protect and manage the inheritable estate.


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Article 5.60. Renunciation of inheritance


1. An heir by operation of law or successor by a will shall have the right to renounce inheritance within three months from the day of the opening of succession. Renunciation may not be in part or subject to conditions or exceptions.


2. Renunciation of inheritance shall have the same effect as non-acceptance of succession.


3. A successor shall renounce inheritance by filing an application with the notary of the place of the opening of succession.


4. No renunciation shall be allowed in the instances where the successor has filed an application on the acceptance of succession with the notary of the place of the opening of succession or asked for issuance of the certificate of the right to inheritance.


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Article 5.61. Increase of the shares of succession


1. Where an heir by operation of law or a successor by a will has not accepted succession, or the testator has deprived his heir of the right of inheritance, the share of succession belonging to that successor shall devolve to the intestate heirs and shall be divided among them in equal shares.


2. Where the testator bequeathed his whole estate to the successors by his will, the share of succession which belonged to the successor who renounced or did not accept thereof shall devolve to the other testate successors and shall be divided among them in equal shares.


3. The rules established in this Article shall not apply in the instances where a secondary successor is appointed for the successor who has renounced or not accepted succession.


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Article 5.62. Devolution of succession to the State


1. The inherited estate shall devolve to the State under the right of succession if:


1) the estate was bequeathed to the State by a will;


2) the testator has neither intestate heirs nor testate successors;


3) none of the successors has accepted the succession;


4) all the heirs have been deprived of the right to inheritance (disinherited).


2. Where there are no intestate heirs, while only a part of the estate of a testator has been bequeathed by a will, the remaining part shall devolve to the State.


3. The State shall be liable for the testator’s debts not exceeding the real value of the inherited property devolved to it.


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Article 5.63. Procedure for making and satisfying creditors’ claims


1. The creditors of a bequeather shall have the right, within three months from the day of the opening of succession, to make claims against the successors who accepted the succession, the executor of the will or the administrator of the inheritance, or to bring an action in respect of the inheritable property.


2. Claims shall be made without taking regard of the expiry of the time limits for their satisfaction.


3. The procedure for making creditors’ claims established in paragraphs 1 and 2 of this Article shall not apply in respect of claims based on mortgage and pledge, as well as claims related to the economic activity of the inheritable private (personal) enterprise or that of a farmer. Claims related to the activity of an inheritable enterprise or farm shall pass to the successors and be realised in accordance with the transactions entered into by the bequeather, except in those cases where the inherited estate is an enterprise against which bankruptcy proceedings have been initiated, or a farm is insolvent.


4. The court may renew the time limit specified in paragraph 1 of this Article where the time limit was missed due to important reasons and the time lapse from the opening of the inheritance does not exceed three years.


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Article 5.64. Securing of inheritance


1. Upon having received information about the opening of succession, the court of the place of the opening of succession shall take the necessary measures to secure the inheritance if:


1) the successors are not known;


2) there are no successors in the place of the opening of succession;


3) the successors do not want or cannot accept the inheritance;


4) at least one successor is legally incapable in this area or with limited legal capacity in this area;

 


5) the testator is known to have considerable debts;


6) there are other circumstances determining the need to secure the inheritance.


2. The inheritable estate shall be secured until it is accepted by all the successors, and, where it is not accepted, until the expiry of the time limit established for the acceptance of succession.


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Article 5.65. Appointment of an administrator for the inheritable estate

Where the inheritance includes property subject to management (private (personal) enterprise, a farmstead, securities, etc.) and it cannot be performed by the executor of the will or the successor, likewise where the creditors of the bequeather bring an action before the successors accept the inheritance, the district court shall appoint an administrator of the inheritable property vested with the rights established in Article 5.38 of this Code. Provisions of Chapter XIV of Book Four of this Code shall apply mutantis mutandis in respect of the administrator of inheritance.

 


Article 5.66. Application for the issuance of the certificate of the right to inheritance


1. The successors who inherit by operation of law or by a will may file an application with the notary of the place of the opening of succession for the issuance of the certificate of the right to inheritance.


2. The same procedure for the issuance of the certificate of the right to inheritance shall apply in the instances where the inheritable estate is devolved to the State or municipality.


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Article 5.67. Time limit for the issuance of the certificate of the right to inheritance


1. The successors shall be issued with the certificate of the right to inheritance upon the lapse of three months from the day of the opening of succession.


2. In the event of succession both by operation of law and by a will, natural persons may also be issued with the certificate of the right to inheritance before the lapse of three months from the day of the opening of succession if the notary possesses information that there are no successors apart from the persons who have applied for the issuance of the certificate of the right to inheritance.

 


CHAPTER VII

MUTUAL RELATIONS BETWEEN SUCCESSORS

 


Article 5.68. Legal status of the inheritable estate

Where there are several heirs, the estate inherited by them shall comprise their partial co-ownership unless it is otherwise provided for by the will.


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Article 5.69. Division of the inheritance


1. No one may be forced to renounce his right to the share he is entitled to from the inheritable estate. Inheritance shall be divided by mutual agreement between the heirs.


2. Inheritance may not be divided:


1) until the birth of a testate or intestate successor;


2) if the testator has established by his will a time limit during which the successors jointly possess the inherited estate. This time limit may not exceed the period of five years from the day of the opening of succession, except in cases when there are minors among the successors. In this event, the testator may prohibit division of the estate until the successor concerned reaches the age of eighteen.


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Article 5.70. Methods of property division


1. Successors may divide the inherited estate upon their mutual agreement before the rights of successors to the things are registered in the public register. The division of immovable things shall be formalised by a notarial deed which must be registered in the public register. In the event of disagreement between the successors concerning the division of property, the estate shall be divided by the court upon the action brought by each of them.


2. Divisible things shall be divided in kind; indivisible things shall be devolved on one of the successors by taking into account the character of the thing and the needs of the successor, while the other successors shall be compensated for the value of the thing with other things or in money.


3. The whole inheritance or separate things thereof may be, upon the mutual agreement of the successors, sold in an auction and the amount received divided, or an auction may be held among the successors concerning separate things where the thing shall be devolved to that successor who offers the highest bid.


4. The transference of individual things to concrete successors may be decided by mutually agreed way of drawing lots.


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Article 5.71. Inheritance of a farmstead

Where a division of a farmstead may destroy the farm, the priority right to get the farm and the inventory thereof shall be granted to the successor who has worked most in the inheritable farm and is inclined and prepared to engage into farming himself. In the event of a dispute, the court may schedule the compensation to other successors for the shares of the property belonging to them to be paid within the period of ten years by deciding to establish a compulsory mortgage for all the immovable things of such successor.

 


Article 5.72. Priority right of a successor to an enterprise

The priority right to receive in kind a private (personal) enterprise inherited by several successors shall be awarded to that successor who is willing and able to manage the inherited enterprise himself. In this event, regard shall also be taken of the possibility of the person receiving the enterprise in kind to settle with the other successors.


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Article 5.73. Priority right of other successors to purchase an inherited farmstead

Where a successor, who has inherited a farmstead pursuant to Article 5.71 of this Code, sells the farmstead before the expiry of a ten-year period from the day of inheritance, priority right to purchase the farmstead shall be awarded to the other successors if the compensation provided for in Article 5.71 has not been paid to them in full. Upon the sale of the farmstead, the other successors shall acquire the right to demand immediate payment of the remaining part of the compensation.


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Article 5.74. Documents


1. Unless the successors have agreed otherwise, the documents of the family and the inheritable estate shall not be divided and shall be transferred by mutual agreement to the custody of one of the successors, or to the successor who has received the largest share of the inheritance, or, if all the shares are equal, to the eldest successor. The successor into whose custody the documents are transferred must allow the other successors to have access to them and to make copies or extracts thereof.


2. The documents pertaining to an immovable thing shall be located with that successor to whom the immovable thing is devolved. Where an immovable thing is inherited by several successors, the documents shall be kept by mutual agreement in the custody of one of them.


3. Disputes related to documents shall be decided by the court by taking into account the size of the shares, use of the immovable thing, place of residence of the successors and other circumstances.

 


CHAPTER VIII

PARTICULARITIES IN SUCCESSION OF SEPARATE TYPES OF PROPERTY


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CHAPTER VIII

PARTICULARITIES IN SUCCESSION OF SEPARATE TYPES OF PROPERTY

 


Article 5.75. Inheritance of land

Where land is inherited by an heir who may not have the right of ownership of land pursuant to laws of the Republic of Lithuania, he shall be entitled only to a sum of money received from the sale of the inherited land. The land shall, on the basis of the certificate of the right to inheritance submitted by the heir, be sold in accordance with the procedure established by the Government to the purchaser indicated by the heir or in an auction. The amount received shall be paid to the heir after deducting the costs of sale or of the organisation of auction.


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Article 5.76. Inheritance of industrial property


1. The right of the bequeather to a patent of invention or to a certificate of industrial design shall devolve to his successors. The rights provided by the documents of industrial property protection shall also be subject to inheritance.


2. Alongside with the enterprise, the successors shall also inherit the right to the name of the legal person and trade marks.


3. The rights and duties pursuant to licence contracts entered into by the bequeather shall devolve to the successors; they shall also acquire the right to industrial and commercial secrets (know-how) and the rights and duties pursuant to contracts on the transference of industrial and commercial secrets provided that these secrets are not of the character indivisible from the personality of the bequeather.

 


 


BOOK SIX

 


LAW ON OBLIGATIONS

 


PART I

GENERAL PROVISIONS

 


CHAPTER I

CONCEPT OF AN OBLIGATION AND ARISING OF OBLIGATIONS


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CHAPTER I

CONCEPT OF AN OBLIGATION AND ARISING OF OBLIGATIONS

 


Article 6.1. Concept of an obligation

An obligation shall mean a legal relationship in which one party (debtor) must perform a determined action for the benefit of another party (creditor) or refrain therefrom, and the creditor has the right to demand from the debtor the performance of his duty.

 


Article 6.2. Grounds for arising of obligations

Obligations shall arise from transactions or from any other legal facts which produce obligatory relationships under the effective laws.

 


Article 6.3. Subject matter of an obligation


1. The subject matter of an obligation may be any actions (acts or omissions) that are neither forbidden by law nor contrary to public order or good morals.


2. The subject matter of an obligation may also relate to any property, even future property, provided that the property is determinate as to the kind or quantity or can be determined according to other criteria.


3. The subject matter of an obligation may have a monetary or non-monetary expression; it must nevertheless meet the requirements set for the subject matter of an obligation.


4. The subject matter of an obligation may not be something that is impossible to perform.


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Article 6.4. Duties of parties to an obligation

The creditor and the debtor must conduct themselves in good faith, reasonably and justifiably both at the time of the creation and existence of the obligation and at the time of its performance or extinguishment.

 


CHAPTER II

TYPES OF OBLIGATIONS

 


SECTION ONE

PLURALITY OF DEBTORS AND CREDITORS

 


Article 6.5. Plurality of debtors

Where an obligation is solidary between two or more persons on the side of the debtor (co-debtors), each of them must perform the obligation in equal shares (partial obligation), except in cases provided for by law or an agreement between the parties.


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1. A solidary obligation of debtors shall not be presumed, except in the cases established by laws. It shall arise only where it is expressly imposed by the law or stipulated by agreement between the parties, also in the cases when the subject matter of the obligation is indivisible.


2. An obligation may be solidary even though the obligation of one of the debtors according to the conditions of its performance differs from the obligation of the others, for example, where one debtor is allowed a time limit and the other debtor is not granted such a time limit, or where the obligation of one debtor is not conditional while the other debtor is bound conditionally, etc.


3. Solidarity between debtors shall be presumed where an obligation is connected with providing of services, effectuating joint activity, or with the compensation for damage caused to another through the joint actions of several persons.


4. If the debtors are solidarily liable, the creditor shall have the right to demand performance both from all the debtors jointly or from several of them, or from a single debtor personally, either for the whole or a part of the debt.


5. A creditor to whom a solidary obligation has not been performed in full by one of the co-debtors shall have the right to demand performance of the remaining part of the obligation by any one of the debtors, or by all of them jointly.


6.


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right to demand performance of the remaining part of the obligation by any one of the debtors, or by all of them jointly.


6. Co-debtors shall remain obligated until the obligation is performed in full.


7. Full performance of a solidary obligation by one of the debtors shall relieve the others towards the creditor.


8. A creditor who receives separately and without any reserve the share of one of the co-debtors, and specifies in the acquitance paper that it applies only to that share, shall thereby renounce solidarity in favour of that debtor alone.


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Article 6.7. Defences of co-debtors against claims of a creditor

In the event of a solidary duty, any of the co-debtors may use against the creditor’s claim both the defences common to all debtors and personal defences. However, the debtor shall have no right to set up defences against the creditor’s claim based on such legal relationships between other co-debtors which do not involve the debtor concerned, nor shall the debtor be entitled to set up defences which can be used only personally by one or several other co-debtors.


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Article 6.8. Other rights and duties of co-debtors


1. Each of the debtors of a solidary obligation shall have the right to accept renunciation of the right to claim granted by the creditor to him and other debtors where such renunciation applies to all the co-debtors.


2. Adjournment of performance of an obligation granted by the creditor to one of the co-debtors shall respectively apply to all other co-debtors to the extent that this corresponds to the intentions of the creditor.


3. Where a creditor renounces solidarity in favour of one of the co-debtors, he shall retain his solidary remedy against the other co-debtors for the whole debt.


4. Any loss arising from insolvency of a co-debtor shall be equally divided between the other co-debtors, except in the cases when their shares in the obligation are not equal.


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1. A co-debtor who has performed the solidary obligation shall have the right to recover within the procedure of recourse from his co-debtors their respective shares that correspond to the equal portions from the performed obligation, with his participatory share deducted unless otherwise provided for by law or an agreement. Any loss, expressed in anything unpaid to the debtor who has performed the solidary obligation, arising from the insolvency of one of co-debtors shall fall in equal participatory shares on the remaining co-debtors, except in the cases when their shares in the obligation are not equal.


2. Where a solidary obligation is of non-monetary nature, in the case of recourse, the other co-debtors shall pay monetary compensation to the debtor who has performed the whole solidary obligation.


3. The rules provided for in paragraphs 1 and 2 of this Article shall also apply to the apportionment between the co-debtors of the expenses of performance of a solidary obligation.


4. A co-debtor against whom a claim was brought may invoke the same defences that might have been set up against the creditor at the time of arising of the claim, as well as other defences, except those which are based on exceptionally personal relationships between the co-debtor and the other co-debtor who has not filed a counter claim.


5. Where the obligation was contracted exclusively in the interest


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and the other co-debtor who has not filed a counter claim.


5. Where the obligation was contracted exclusively in the interest of one of the co-debtors, or where it is not performed due to the fault of one of the debtors alone, the debtor concerned shall be liable for the whole debt to the other co-debtors, who shall then be considered in his regard as his sureties.


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Article 6.10. Divisibility of a solidary duty and a solidary claim between the heirs of the parties to an obligation


1. Unless otherwise provided for by law or contract, the solidary obligation of a debtor shall be divided after his death between his heirs in accordance with the rules established in Book Five of this Code, except in the instances where the obligation is indivisible.


2. The provision established in paragraph 1 of this Article shall also apply in the case where the creditor’s claim is solidary.

 


Article 6.11. Influence of a novation upon a solidary duty

A novation between the creditor and one of the co-debtors shall discharge the other co-debtors towards the creditor from the performance of a solidary duty, except in cases established by law or contract. Where a novation is clearly related only with the share of one of the co-debtors, the other co-debtors shall be released from the performance of the duty only in respect of the share of that co-debtor.


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Article 6.12. Acknowledgement of a solidary debt and the right of a solidary claim


1. Where a debt is acknowledged by one of the co-debtors, this acknowledgement shall also apply to all other co-debtors.


2. Where the right of claim is acknowledged to one of the creditors with the right of a solidary claim, this acknowledgement shall also apply to all other co-creditors.

 


Article 6.13. Merger of a debtor and a creditor


1. Where an obligation is solidary and the qualities of a co-debtor and a creditor are combined in the same person, the obligation of the other solidary debtors shall be extinguished in respect to the share of that co-debtor.


2. The rule established in paragraph 1 of this Article shall also apply in the cases of the right of a solidary claim.


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Article 6.14. Power of a court judgment in the case of a solidary duty


1. A court judgment rendered in the case of dispute between the creditor and one of the solidary debtors shall also have effect against the other co-debtors.


2. The other co-debtors may invoke the judgment referred to in paragraph 1 of this Article as a defence against the claim of the creditor unless such judgment is based on exclusively personal relationships between that debtor alone and the creditor.


3. An action instituted against one of the solidary debtors shall not deprive the creditor of the right to bring an action against the other co-debtors, but the debtor sued shall have the right to demand the impleader of the other solidary debtors.


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Article 6.15. Non-performance of an obligation in the case of a solidary duty through the fault of one of the co-debtors


1. Where the performance of an obligation has become impossible through the fault of one of the solidary debtors, the other co-debtors shall not be released from liability for non-performance of the solidary obligation.


2. Where the performance of an obligation in kind has become impossible, or the time limit of its performance is forfeited through the fault of one or more of the solidary debtors, the other co-debtors shall not be released from their duty to compensate for damages to the creditor, though they shall not be liable for any additional damages which may be incurred by him. The creditor may claim additional damages only from those co-debtors through whose fault the obligation became impossible to be performed, or through whose fault the forfeiture of performance occurred.


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Article 6.16. Prescription of a solidary obligation


1. Actions by which prescription is interrupted with regard to the relationships between the creditor and one of the solidary debtors shall be equally effective in regard to the relationships between the creditor and other co-debtors. The same rule shall apply in the event of the right of a solidary claim between creditors.


2. Suspension of prescription with regard to one of the solidary debtors shall have no effect on the other co-debtors. The same rule shall apply in the case of a right of solidary claim between creditors. However, the debtor who has been required to perform the obligation shall have the right of recourse against the co-debtors who were discharged by prescription.


3. A refusal to demand the application of prescription made by one of the solidary debtors shall have no effect with regard to the other co-debtors. Where such refusal is made only in favour of one of the solidary creditors, it shall also benefit the other co-creditors. A solidary debtor who has refused to demand the application of prescription shall have no right of recourse against the other co-debtors discharged by the extinct prescription.


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Article 6.17. Solidarity among creditors

Where an obligation is solidary between two or more persons on the side of the creditor, each creditor shall be entitled to demand the performance of an equal share, except in the cases provided for by law or an agreement between the parties.

 


Article 6.18. Solidary claim of creditors


1. Solidarity between creditors may be established by law or an agreement between the parties, i.e. it shall entitle each of the creditors to claim from the debtor for the whole performance of the obligation or a part thereof. The claim shall also be deemed to be solidary where the subject matter of the obligation is indivisible.


2. The debtor shall have no right to set up defences against the claim of one of the co-creditors that are based on such personal legal relationships of the debtor in which the creditor concerned does not participate.


3. Performance of the whole duty in favour of one of the solidary creditors shall release the debtor from the performance towards the other creditors.


4. A solidary creditor who has received the whole performance of the obligation from the debtor must compensate the other co-creditors for their respective shares unless otherwise determined by the relationship between them.


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Article 6.19. Possibility of choice of creditor for performance

A debtor shall have the option of performing the obligation in favour of any of the solidary creditors, provided that he has not been sued by any of them.

 


Article 6.20. Influence of novation on a solidary claim

The novation of one of the solidary creditors and a debtor shall apply only to that creditor’s share and may not be used with respect to the other solidary debtors.

 


Article 6.21. Renunciation of the right to a solidary claim


1. If the remission from the right to claim is made by one of solidary creditors, it shall release the debtor from performance of a solidary obligation only in respect of the share the performance of which could have been claimed by the remitting creditor.


2. The remission provided for in paragraph 1 of this Article shall not release the solidary creditors from the settlements between themselves.


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Article 6.22. Power of a court judgment in the case of a solidary claim


1. A judgment rendered in the dispute between one of the solidary creditors and the debtor shall have effect against the other solidary creditors.


2. The other creditors may avail themselves of the court judgment against the debtor to the extent that it is related to the debtor’s defences he can set up against each of the solidary creditors.


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Article 6.23. Renunciation of a claim


1. A creditor who renounces a claim in favour of one of the co-debtors shall retain his right of solidary claim against the other co-debtors.


2. The solidary claim of the creditor in respect of one of the co-debtors shall terminate if the creditor:


1) acknowledges without any exceptions that one of the co-debtors has paid his share;


2) has filed an action against the debtor for the recovery of that debtor’s share, and the latter has assented to such action, or if a court judgment satisfying the creditor’s claim has been passed.


3. Where a creditor has renounced a solidary claim in respect of one of the co-debtors, and one of the other co-debtors has become insolvent, the share of such insolvent co-debtor shall be divided between all the solidary debtors, except for the share of the co-debtor in whose favour the renunciation of a solidary claim has been made.

 


SECTION TWO

DIVISIBLE AND INDIVISIBLE OBLIGATIONS


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SECTION TWO

DIVISIBLE AND INDIVISIBLE OBLIGATIONS

 


Article 6.24. Divisible obligations


1. An obligation shall be divisible unless it is expressly stipulated by law that it is indivisible, or unless the subject matter of the obligation, owing to its nature, is not susceptible to division either materially or abstractly.


2. Where an obligation is divisible, and where there is more than one debtor or more than one creditor though the obligation is not solidary, each of the creditors may claim the performance only of his share of the debt, while each debtor shall be bound to perform only his share of the debt.


3. The heir of the debtor who has been charged with rendering the performance, or who is in possession of the property as a subject matter of the obligation, shall have no right to claim for division of performance of the obligation.


4. An obligation of one debtor to one creditor may be performed between them only as an indivisible one, though this obligation shall become divisible between the heirs of the parties to the obligation, except where it is indivisible.


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Article 6.25. Indivisible obligations


1. An obligation shall be indivisible if the subject matter of the obligation, owing to its nature, is not susceptible to division, or if the parties have agreed on such mode of performance which renders the obligation impossible to be performed in shares.


2. Indivisibility of an obligation shall imply that it is not susceptible to division either between the creditors, or the debtors, or between their heirs.


3. A stipulation on solidarity of an obligation made by the parties thereof shall not render it indivisible.


4. Each of the debtors of an indivisible obligation or his heir may separately be obligated to perform the whole obligation, and each of the creditors of an indivisible obligation or his heir may claim the performance of the whole obligation even though the obligation is not solidary.


5. Where an heir of the creditor claims satisfaction of the whole performance, he must secure the protection of the interests of co-heirs.

 


SECTION THREE

ALTERNATIVE OBLIGATIONS


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SECTION THREE

ALTERNATIVE OBLIGATIONS

 


Article 6.26. Concept of an alternative obligation


1. An obligation shall be alternative where the debtor is charged with performance of one of two or more different actions (principal prestations) at his own choice or chosen by the creditor or a third person. The performance of either of the chosen prestations shall fully discharge the debtor.


2. The debtor may not demand the creditor to accept a part of the performance in one prestation and the other part in another.


3. An obligation shall not be considered alternative where at the time of its arising one of the two possible prestations could not have been the subject matter of that obligation.


4. In the event where a person who has the right of choice chooses a concrete action of performance (prestation), an alternative obligation shall become simple.


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1. In an alternative obligation, the choice of the prestation shall belong to the debtor unless it has been granted to the creditor or a third person by law, a contract or a court judgment.


2. A choice shall become irrevocable from the moment of performance of one chosen prestation, or when the choice is communicated to the other party, or to both parties in the event where the choice belongs to a third person.


3. Where the right of choice belongs to one of the parties to the obligation and this party fails to exercise it within the prescribed time limit, the right of choice shall pass to the other party to the obligation. The right of choice may not pass to the creditor until he acquires the right to claim for performance, and to the debtor until his duty to perform the obligation arises. Where the choice of a concrete prestation is referred to a third person and he fails to exercise it, it shall be determined by the court.


4. The time limit for exercising the right of choice may be established by agreement between the parties. Where such time limit is not established, it may be fixed by the party who is not granted the right of choice. Such time limit must be reasonable.


5. Where the right to claim has been pledged and the impossibility of performing an obligation is caused by the failure to choose a concrete action of performance, the pledgee may establish a time limit for both parties to the obligation within which the


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is caused by the failure to choose a concrete action of performance, the pledgee may establish a time limit for both parties to the obligation within which the choice of a concrete prestation must be made. Where the choice of a concrete prestation is not made within the established time limit, the right of choice shall pass to the pledgee.


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1. In the event of one of the several prestations being impossible to perform from the very arising of the obligation, or it becoming such after the arising of the obligation, the obligation shall be performed by the acceptance of the remaining prestation.


2. The rule established in paragraph 1 of this Article shall not apply if one of the prestations becomes impossible to perform due to the circumstances for which the responsibility is borne by the party without the right of choice of performance. In this event, the debtor shall be liable for the non-performance of the obligation.


3. Where the debtor had the right of choice and one of the several prestations became impossible to perform not through his fault, the debtor must perform the obligation in the remaining prestation.


4. Where the debtor had the right of choice and all of the prestations become impossible to perform due to his own fault, the debtor shall be liable to the creditor to the extent of the last prestation remaining.


5. Where all the prestations become impossible to perform through no fault of the debtor, the obligation shall be deemed to be extinguished.


6. Where the creditor is granted the right of choice, and if one of the prestations becomes impossible to perform, the creditor must accept performance in other prestations. Where one of the prestations becomes impossible to perform due to the fault of the debtor, the creditor may claim performance in kind by choosing other prestations, or claim compensation


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prestations becomes impossible to perform due to the fault of the debtor, the creditor may claim performance in kind by choosing other prestations, or claim compensation for damage resulting from the non-performance of the obligation by the prestation that has become impossible to perform. Where the obligation is impossible to perform in any of the several prestations due to the fault of the debtor, the creditor shall have the right at his choice to claim compensation for the damages resulting from the impossibility of performance of one or another of the prestations.


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Article 6.29. Facultative obligation


1. A facultative obligation shall be an obligation which has only one principal subject matter (prestation), though in the event of the obligation being impossible to perform in the principal prestation, it may be performed in another prestation that does not contradict the principal one.


2. The debtor shall be discharged from performing the obligation if the principal prestation, through no fault on his part, becomes impossible to perform, and the obligation cannot be performed in another prestation that does not contradict the principal one.

 


SECTION FOUR

CONDITIONAL OBLIGATIONS


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SECTION FOUR

CONDITIONAL OBLIGATIONS

 


Article 6.30. Concept of a conditional obligation


1. An obligation shall be conditional where its arising, modification or extinction is made dependent on whether or not a certain circumstance occurs in the future.


2. The conditional nature of an obligation shall not prevent the rights that arise from it being alienable and inheritable.


3. Conditional obligations may be with a suspensive term or a resolutory term. In such case, Article 1.66 of this Code shall apply.


4. An obligation shall not be deemed to be conditional if its extinction depends on an event that, unknown to the parties, had already occurred at the time when the debtor accepted the conditional obligation.


5. The obligation whose arising depends upon a condition that is at the absolute discretion of the debtor shall be null and void. However, if the condition consists of exercising or not exercising appropriate actions, the obligation shall be valid even where the exercising or not exercising the action is at the sole discretion of the debtor.


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Article 6.31. Requirements for a condition


1. A condition must be lawful and not contrary to the public order and good morals.


2. A condition may only be such circumstance, the existence or non-existence of which is possible.


3. A condition which is unlawful, contrary to the public order or good morals, or which is impossible shall be null and void, and shall render the obligation which depends upon it null and void.

 


Article 6.32. Time limits for fulfilment or non-fulfilment of a condition


1. In the event where no time limit has been established for the fulfilment of a condition, the condition may be fulfilled at any time. Where it becomes certain that the condition may not be fulfilled at all, it shall be deemed to be not fulfilled.


2. Where the arising, modification or extinction of an obligation is dependent upon a condition that certain circumstances will not occur within a given time, the condition shall be considered having occurred once the determined time has elapsed without the certain circumstance having occurred, also when, before the elapse of the time, it becomes certain that the circumstance will not occur altogether.


3. Where no time limit has been fixed, the condition shall not be considered fulfilled until it becomes certain that the circumstance will not occur.

 


SECTION FIVE

OBLIGATIONS WITH A TERM


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SECTION FIVE

OBLIGATIONS WITH A TERM

 


Article 6.33. Types of obligations with a term


1. Obligations may be with a suspensive or a resolutory term.


2. An obligation with a suspensive term shall be an existing obligation that is not performed until the expiry of a certain time limit, or until the occurrence of a certain circumstance. In this event, its performance may not be demanded before the expiry of the term; however, anything performed freely and without error before the expiry of the term may not be recovered.


3. An obligation with a resolutory term shall be an obligation whose duration is fixed by laws or agreements between the parties and which is extinguished by the expiry of the fixed term.

 


Article 6.34. Fulfilment of obligations with a term


1. In the event of non-occurrence of a circumstance in the case of an obligation with a suspensive term, the obligation shall become exigible from the day on which that circumstance should normally have occurred.


2. Anything that is due upon a term may not be exacted before the term expires. However, everything performed freely and without error before the expiry of the term may not be recovered.


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1. A term may be determined by laws, agreement between the parties or a court judgment.


2. Where the parties have agreed to postpone the determination of the term, or to delegate it to be determined by one of the parties, but no term has been determined, the term shall be determined by the court upon the application of one of the parties, taking into account the nature of the obligation and the circumstances of the case. In urgent cases, the term may be determined by one of the parties. In any event, the term must be reasonable.


3. Where a fixed term is required by the nature of the obligation, and it has not been determined by the parties, the term may be fixed by the court.


4. It shall be presumed that a term is determined for the benefit of the debtor unless otherwise established by laws or the contract, also where, taking into consideration the essence and nature of the obligation, it becomes clear that the term has been determined for the benefit of the creditor, or both parties to the obligation. The debtor shall lose his privileges in respect of the term if he becomes insolvent, is declared bankrupt or without the consent of the creditor reduces or destroys the security of performance of the obligation submitted, also if the debtor fails to meet the conditions in consideration of which the privileges were granted to him.


5. The party for whose benefit the term has been determined shall have the right to renounce it without the consent of


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granted to him.


5. The party for whose benefit the term has been determined shall have the right to renounce it without the consent of the other party. Renunciation of the benefit of the term shall render the obligation exigible immediately.


6. When one of the parties to the obligation renounces the benefit of the term, or loses the right to the benefit of the term, the other party shall acquire the right to demand immediate performance of the obligation.


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1. Monetary obligations (debts) must be expressed and paid in the currency which in accordance with the valid laws is legal tender in the Republic of Lithuania.


2. Monetary obligations may be paid in accordance with the procedure established by law by means of banknotes/coins, cheques, bills of exchange, transfer of funds, credit cards or by any other legal tender.


3. Where an action is brought in the Republic of Lithuania for the recovery of a sum of money expressed in a foreign currency, the creditor may at his choice demand payment in the foreign currency, or the equivalent in the national currency of the Republic of Lithuania at the rate of exchange on the day of the actual payment.


4. Where the monetary obligation is expressed in a currency which is not legal tender, the money paid by the debtor to perform the obligation must be legal tender and correspond to the rate of exchange of the currency valid at the time and in the place of actual payment.


5. Where the debtor exceeds the time limit fixed for the fulfilment of the obligation and fails to pay on the day of maturity, and where after the day concerned the currency in which the sum of money is due depreciates because of the change in exchange rates, the debtor must pay an additional amount equivalent to the difference between the rate of exchange at the date of maturity and the date of actual payment. This rule shall not apply where the failure of the debtor to perform the obligation is conditioned


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exchange at the date of maturity and the date of actual payment. This rule shall not apply where the failure of the debtor to perform the obligation is conditioned by the fault of the creditor. The debtor shall bear the burden of proof of the circumstance indicated above.


6. The provisions of paragraph 5 of this Article shall not apply where the rule established in paragraph 1 of this Article has been violated.


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Article 6.37. Interest on monetary obligations


1. Interest on obligations may be fixed by law or agreements between the parties.


2. The debtor must also pay a certain interest established by law on the sum adjudged to the creditor for the period from the moment of the commencement of the case in the court until the final execution of the judgment.


3. Where the interest is established by law, the parties may agree in writing upon a higher interest providing that such agreement is not contrary to law or the principles of good faith and reasonableness. Non-observance of the written form shall be the grounds for the application of the interest established by law.


4. No interest shall be calculated on the interest calculated previously (double interest), except in the cases established by law or agreement between the parties where such agreement is not contrary to the requirements of good faith, reasonableness and justice.

 


CHAPTER III

PERFORMANCE OF OBLIGATIONS AND LEGAL EFFECTS OF THEIR NON-PERFORMANCE

 


SECTION ONE

GENERAL PROVISIONS


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SECTION ONE

GENERAL PROVISIONS

 


Article 6.38. Principles of performance of obligations


1. Obligations must be performed in good faith, properly and within the set time limits, pursuant to the requirements indicated in laws or the contract, and in the absence of such requirements, obligations must be performed in accordance with the criteria of reasonableness.


2. In the event where the performance of an obligation is inherent in the exercise of professional activity of one of the parties, the requirements with respect to the nature of that professional activity must also be observed by the party concerned.


3. Each of the parties must perform its obligations in the most cost-effective manner possible and render every kind of assistance to the other party in performing its obligations (duty of the parties to cooperate).


4. If the debtor uses assistance of other persons in performance of the obligation, he shall be liable for the actions of those persons as for his own.


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Article 6.39. Manner of performance of an obligation


1. The debtor shall have no right, without the consent of the creditor, to perform the obligation in a manner other than that provided for in the contract or laws, irrespective of the value of the manner of performance.


2. Where the creditor has consented to accept performance of the obligation in another manner, the obligation shall be deemed to have been fulfilled.


3. The counter-duties of the debtor and creditor must be performed by them concurrently unless otherwise provided for by laws, the contract, or the essence of the obligation.

 


Article 6.40. Partial performance of an obligation


1. The creditor shall have the right to refuse accepting partial performance of an obligation unless otherwise provided for by laws or the contract.


2. If the creditor disputes a part of the obligation, he must accept the performance of that part of the obligation which is not disputed. However, the creditor shall reserve the right to demand performance of the remaining part of the obligation.


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Article 6.41. Quality of performance of an obligation


1. When the subject matter of an obligation is a thing specified only as to the kind, the debtor must deliver a thing of the same kind, but not below the average in quality required for the kind concerned, unless otherwise provided for by laws or a contract.


2. When the subject matter of an obligation is an individually specified thing, the debtor shall be liable for any worsening of the quality of that thing if such worsening occurs through his own fault.

 


Article 6.42. Provision of security for performance of an obligation

Any person bound to provide security for performance of an obligation, which is not specified by the contract as to the manner or form, shall have the right at his own discretion to choose concrete means of security adequate to the essence of the obligation or a form of security established by laws.

 


Article 6.43. Duty to safeguard

An obligation to deliver an individually specified thing shall include the duty to safeguard it until delivery unless otherwise provided for in the contract.


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Article 6.44. Person to whom the performance must be made


1. The obligation must be performed to the creditor or to his representative, or to the person designated by the creditor, or to the person obliged by laws or the court to accept such performance.


2. Performance of an obligation made to a person not entitled to accept it shall be deemed to be a proper performance if the creditor ratifies it or actually obtains the full performance from the person concerned.


3. Performance of an obligation shall not be deemed to be carried out in a proper way if the debtor, in the course of its effectuation in respect of one of his creditors, infringes the interests of his other creditor who is granted the right to demand the arrest of the property of the debtor.

 


Article 6.45. Performance of an obligation to an erroneous creditor


1. The debtor who performs an obligation to a person who, through the fault of the creditor, is reasonably and in good faith deemed to be entitled to receive the performance shall be discharged from the performance of the obligation to the creditor if he proves to have erred in good faith.


2. The erroneous creditor, who has accepted performance, must restore it to the true creditor or to the debtor in accordance with the rules of Chapter XX of this Book.


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Article 6.46. Suspension of performance of an obligation


1. The debtor shall have the right to suspend performance of an obligation upon substantial and reasonable grounds for doubt whether the person to whom the obligation is to be performed has the right to accept this performance, and if the latter, upon the demand of the debtor, fails to present the necessary proof of his right to claim.


2. The debtor shall also have the right to suspend performance of an obligation if the creditor fails to perform his counter-obligation and where the counter-obligations of the debtor and the creditor are connected in such a way as to justify the suspension of the performance of the obligation.


3. The debtor shall have no right to suspend the performance of an obligation where the creditor cannot perform his obligation through the fault of the debtor himself, likewise when the creditor cannot perform his obligation due to circumstances beyond his control.

 


Article 6.47. Performance of an obligation to a legally incapable creditor or to a creditor who had no right to accept the performance personally


1. The performance of an obligation to a creditor who is legally incapable in that area shall be deemed to be a proper performance only to the extent that the debtor proves that such performance was in fact in the interests of the creditor who was legally incapable in that area and was carried out for his benefit.


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2. Where the obligation is performed without considering that the creditor due to certain reasons (arrest, etc.) was unable to accept the performance personally, the debtor must perform such obligation anew and shall have the right of recourse against the creditor to demand the return of what has already been transferred.

 


Article 6.48. Limitation of the debtor’s legal capacity

If the obligation has been fulfilled by the debtor who is legally incapable in that area or has limited legal capacity in that area, this may not be challenged on the basis of the incapacity of the debtor in that area or his limited legal capacity in that area.

 


Article 6.49. Performance made with the property of another’s


1. The debtor may not dispute performance of an obligation made by the transfer of property he had no right to dispose of, except in the cases when he himself offers to make performance by a transfer of property he has the right to dispose of, and if such change of prestation does not violate the interests of the creditor.


2. The creditor to whom the property of another’s has been transferred by the debtor in performance of an obligation shall have the right to dispute such performance and claim damages.


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Article 6.50. Right of a third person to perform an obligation


1. An obligation may be performed in part or in full by a third person, except in the cases when pursuant to the agreement of the parties, or the essence of the obligation, it must be performed by the debtor personally.


2. The creditor may refuse acceptance of the performance offered by a third person if the debtor has notified him of his objection to such performance, except in the case established in paragraph 1 of Article 6.51 of this Code.


3. The third person who has performed the obligation shall acquire the rights of a creditor in respect to the debtor.


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Article 6.51. Right of a third person to perform an obligation for the debtor


1. Where the execution against the property of the debtor has been levied by the creditor, the claim of the creditor may be satisfied by third persons who by the reason of such execution may be deprived of certain rights to that property. The same right shall belong to the person who possesses the property if by the reason of execution the right of possession may be lost by him. The third person who has performed the obligation for the debtor shall acquire the right of recourse to claim from the debtor. 


2. A claim of the creditor may also be satisfied by depositing the money into the deposit account of a notary, a bank or any other credit institution, or by setting-off counter claims.


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Article 6.52. Place of performance of an obligation


1. An obligation must be performed at the place expressly indicated in the contract or laws, or inferred from the essence of the obligation.


2. In the event where no place of performance is indicated, the following rules shall apply:


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1) the obligation to deliver an individually specified thing must be performed at the place where the thing was located when the obligation arose;


2) the obligation to deliver an immovable thing must be performed at the place where the thing is located;


3) the obligation to deliver a thing specified as to the kind must be performed at the place of residence or business of the debtor;


4) a monetary obligation must be performed at the place of residence or business of the creditor at the time of maturity of the obligation. In the event of change of the creditor’s place of residence or business from the time of arising of the obligation, which has caused additional expenses of performance to the debtor, the creditor must compensate the debtor for such additional expenses. Upon the request of the creditor, a monetary obligation may also be performed in the territory of another state where the place of residence or business of the creditor is located at the time of payment, or the state where the creditor’s place of residence was at the time when the obligation arose. However, where the required performance would be rendered substantially more onerous in the consequence, the debtor may refuse to satisfy such requirement of the creditor and execute performance in the place of the creditor’s residence or business at the time when the obligation arose;


5) all other obligations must be performed in the place of the debtor’s residence or business at the time of maturity of the time limit for the performance


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all other obligations must be performed in the place of the debtor’s residence or business at the time of maturity of the time limit for the performance of the obligation.


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Article 6.53. Time limit for performance of an obligation


1. If the time limit for the performance of an obligation is not established, or it is determined by the moment of demand to perform the obligation, the creditor shall have the right to demand it at any time, and the debtor shall have the right to perform the obligation at any time. However, where a certain time limit is necessitated by the nature of the obligation, or the manner or place of its performance, it may be fixed by the court upon the demand of one of the parties.


2. The obligation whose time limit for performance is not determined must be performed by the debtor within seven days from the day on which the creditor requested performance unless a different time limit for performance results from laws or the essence of the contract. In such cases, the time limit for performance must be reasonable and enable the debtor to perform the obligation properly.


3. The debtor shall have the right to perform the obligation before the expiry of the time limit determined for its performance unless this is prohibited by laws, the contract, or is contrary to the essence of the obligation.


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Article 6.54. Imputation of payments


1. Unless otherwise agreed by the parties, payments received by the creditor in result of performance of an obligation shall be imputed first to the creditor’s expenses related to the filing of a claim to perform the obligation.


2. Second in line payments shall be imputed to interests in accordance with the sequence of their maturity.


3. Third in line payments shall be imputed to penalties.


4. Fourth in line payments shall be imputed to the performance of the principal obligation.


5. The creditor shall have the right to reject an offer to pay if the debtor indicates a different order of imputation than established in paragraphs 1, 2, 3 and 4 of this Article.


6. The creditor may reject full repayment of the principle obligation if the current interest at maturity is not paid at the same time.


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1. A debtor who owes several debts of the same kind to the same creditor may declare at the time of payment which debt he is repaying.  However, the debtor shall have no right without the consent of the creditor to impute a payment to an obligation not yet due in preference to a debt at maturity.


2. In the absence of such declaration of the debtor, or a different agreement between the parties, it shall be considered that the payment is imputed first to the debt at maturity. In the event of several debts at maturity, where none of them is secured, it shall be considered that the payment is imputed to the debt that was the first to reach maturity. Where several debts are due, it shall be considered that the payment is imputed to the one having the security. Among several secured debts, it shall be considered that the payment is imputed first to the debt which is most burdensome to the debtor, and in the event of all the debts being equally burdensome, to the one that was the first to reach maturity. In the instances where none of these criteria may be applied, imputation shall be made in proportion to all the debts.


3. The rules of this Article shall also apply when the debtor’s obligation to the creditor consists of the supply of goods or services, to the extent that this does not contradict the essence of the obligation.


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Article 6.56. Performance of an obligation by payment to a deposit account


1. The debtor shall have the right to perform a monetary obligation by depositing the debt into the deposit account of a notary, a bank or any other credit institution if:


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1) the creditor or any other person authorised to accept the performance cannot be found at the place where the obligation is to be performed;


2) the creditor is legally incapable in this area and has no guardian appointed for him; 


3) the creditor avoids accepting the performance of the obligation;


4) the creditor is not clear, as the right to accept the performance is being disputed by several persons;


5) the creditor is of limited legal capacity in this area and has no curator appointed for him.


2. A deposit of the sum necessary for the performance of an obligation into a deposit account indicated in paragraph 1 of this Article shall be considered a proper performance of the obligation.


3. A notary, a bank or any other credit institution, into whose account the money has been deposited, must within a reasonable time inform the creditor accordingly.


4. Where the subject matter of an obligation is a thing, and the creditor refuses to accept performance, the debtor must make a tender and determine the time limit for the acceptance of performance. In the case of the creditor’s failure to accept performance of the obligation within the established time limit, he shall be considered to be in breach of the obligation. In this event, the creditor shall bear the costs of the preservation of the thing. The creditor shall also bear the risk of accidental loss or deterioration of a thing. If a thing is perishable, the debtor may realise it


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thing. The creditor shall also bear the risk of accidental loss or deterioration of a thing. If a thing is perishable, the debtor may realise it and deposit the proceeds. These rules shall also apply within the conditions specified in paragraph 1 of this Article, with the exception of a tender.


5. Performance of an obligation in accordance with the rules provided for in this Article shall release the debtor from the payment of interest or any other dues in the future.


6. Interest or any other sums calculated from the day of deposit shall be due to the creditor. However, if the deposit is made to obtain performance of the obligation of the creditor that is correlative to the obligation the debtor intends to perform by the deposit, the interest and other sums received shall belong to the debtor until the deposit is accepted by the creditor.


7. The deposited sums of money may be withdrawn by the debtor as long as the performance has not been accepted by the creditor.  If the debtor withdraws the deposited sums from the deposit account, he shall not be considered to have performed the obligation. Where the deposit of a sum of money is made during judicial proceedings, the debtor may withdraw such deposited sum only upon the authorisation of the court. In addition, the withdrawal may not be effectuated by the debtor if this would impair the rights of third persons, or the interests of solidary debtors or sureties.


8. In the event of bankruptcy, monetary funds accumulated in


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third persons, or the interests of solidary debtors or sureties.


8. In the event of bankruptcy, monetary funds accumulated in the deposit account shall not be calculated into the assets of the bank or of any other credit institution from which the claims of the creditors are satisfied under the procedure of bankruptcy.


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Article 6.57. Expenses of performance of an obligation

The expenses related with the performance of an obligation shall be charged to the debtor unless otherwise provided for by laws or a contract.


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Article 6.58. Right to suspend performance of an obligation


1. Where the contractual obligation is counter-performed, and the party who is the first to make actions of performance fails to perform its obligation, or where it is evident that the party will delay the performance of the obligation, the other party shall have the right to suspend the performance of its counter-obligation, or refuse to perform it altogether, inform of this the other party, and claim damages.


2. The party to the obligation shall have no right to suspend performance where:


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1) the other party produces adequate security of performance of its obligation and this will not unduly delay performance of the obligation;


2) performance of the obligation of the other party is impossible for the reasons beyond the control thereof;


3) performance of the obligation of the other party is prevented by the fault of the opposite party.


3. In the event of a contractual obligation being not performed in full by one of its parties, the other party shall have the right to suspend the counter-performance of its obligation, or to refuse performance to the degree correspondent to that non-performed by the party obliged to perform it first.


4. Where a party performs its counter-obligation before the party who is to perform first, the latter shall be bound to perform its obligation.


5. The right to suspend performance of a bilateral obligation shall be extinguished when the other party to the obligation presents adequate security for the performance of its obligation.


6. The right to suspend performance of an obligation may also be invoked against the creditors of the other party to the obligation.


7. The right to suspend performance of an obligation must be exercised by the parties in good faith and reasonably.


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SECTION TWO

LEGAL EFFECTS OF NON-PERFORMANCE OF AN OBLIGATION

 


Article 6.59. Prohibition of unilateral refusal to perform an obligation

Unilateral refusal to perform an obligation or unilateral modification of the conditions of performance of an obligation shall be prohibited, except in the cases provided for by law or a contract. 

 


Article 6.60. Consequences of non-performance of an obligation to deliver an individually determined thing


1. Where a debtor fails to perform the obligation to deliver an individually determined thing to the creditor’s ownership or possession thereof by the right of trust or use, the creditor shall have the right to demand that thing to be delivered. This right shall be extinguished upon the thing concerned being delivered to another creditor with the same kind of right. Where the thing has not yet been delivered, the priority to receive it shall belong to the creditor in whose favour the obligation first arose, and in the event where it is impossible to be ascertained, to the creditor who was the first to bring the action. The creditor who is unable to exercise his right to claim performance in kind shall be entitled to claim compensation of damages only.


2. In the event where a penalty is foreseen by the contract, the creditor shall have the right at his choice to claim either payment of the penalty, or delivery of the individually determined thing.


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Article 6.61. Effects of non-performance of an obligation to do certain work


1. In the event where a debtor fails to perform an obligation that entails doing certain work, the creditor shall have the right to perform that work himself at the debtor’s expense within a reasonable time and for a reasonable price unless otherwise established by laws or a contract, or he may claim damages. In these instances, the creditor shall have the right to file a suit and demand the debtor to pay in advance the amount necessary for performing the work.


2. In the event where a debtor fails to perform an obligation that entails performing certain work or actions which can be performed exclusively by the debtor personally, the court shall, upon the demand of the creditor, exact a fine from the debtor in favour of the creditor. The amount of the fine shall be determined by the court. The fine may be exacted in a lump sum, or payable for every delayed day until the full performance of the obligation by the debtor.


3. Paragraph 2 of this Article shall not apply in the instances where the violated rights of the creditor can be defended by other means, likewise where the performance of the obligation was rendered impossible not through the fault of the debtor.


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Article 6.62. Liability for non-performance of an obligation arising from a bilateral contract


1. Where the performance of an obligation that arises from a bilateral contract has become impossible due to a circumstance not imputable to any of the parties, while neither laws nor a contract provides otherwise, none of the parties shall be entitled to require the other party to perform the contract. In such case, each party shall have the right to claim restitution in kind without the corresponding counter-performance.


2. Where the performance of an obligation that arises from a bilateral contract has become impossible due to a circumstance imputable to one party, while neither laws nor a contract provides otherwise, the other party shall be entitled to revoke the contract and claim restitution in kind (to return everything that was performed), likewise compensation of damages incurred as a result of non-performance.


3. Where the performance of an obligation that arises from a bilateral contract has become impossible due to a circumstance imputable to the other party, the first party shall be entitled to demand from the other party performance of the obligation and compensation of damages, including what has been accumulated due to the impossibility to perform the obligation.


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Article 6.63. Cases in which the debtor is considered to be in breach of an obligation


1. The debtor shall be considered to be in breach of an obligation where:


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1) the conditions of a contract are not performed, or are being performed improperly; 


2) the debtor fails to perform the obligation within the established time limit;


3) the creditor, whether judicially or extra-judicially, reasonably demands the debtor to perform his obligation;


4) the creditor demands performance of the obligation within a reasonable time established by him, but the debtor has failed to perform the obligation within this time limit;


5) the debtor informs the creditor before the expiry of the time limit of his intention not to perform the obligation;


6) the performance of the obligation has become impossible due to the debtor’s fault.


2. From the moment the debtor is considered to be in breach of an obligation, he shall be liable for any damages suffered by the creditor, except in the cases where the debtor is released from the performance of the obligation.


3. In the event where the time limit for the performance of an obligation has not been fixed, the debtor shall be considered to be in breach of an obligation from the moment when the creditor made a demand in writing to perform the obligation and fixed the time limit for performance, but the debtor has failed to perform the obligation within that time limit.


4. The debtor shall be liable for all the consequences of the impossibility to perform the obligation after it was breached by the debtor, except in cases where the performance of the obligation has been


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for all the consequences of the impossibility to perform the obligation after it was breached by the debtor, except in cases where the performance of the obligation has been rendered impossible through the fault of the creditor.


5. After the breach of an obligation committed by the debtor, the creditor shall have the right to refuse acceptance of the tender offered by the debtor if the debtor does not concurrently offer compensation of damages sustained by the creditor as a result of the breach of the obligation.


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Article 6.64. Cases in which the creditor is considered to be in breach of an obligation


1. The creditor shall be considered to be in breach of an obligation where:


1) the debtor cannot perform the obligation due to insufficient cooperation between the creditor and the debtor, or through any other fault of the creditor;


2) the creditor through his own fault fails to perform his duty to the debtor, thus the debtor justifiably suspends performance of the obligation.


2. When the creditor is in breach of an obligation, the debtor may file a suit and demand to be released from the performance of the obligation in whole or in part, conditionally or unconditionally.


3. If the creditor breaches the obligation, the debtor shall be considered not to have breached it.  The debtor may not be considered to be in breach of the obligation as long as the creditor is considered to have breached it.


4. The debtor shall have the right to demand compensation for the damages incurred as a result of the breach of the obligation committed by the creditor.


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1. Unless otherwise stipulated by the contract, the creditor, upon accepting the performance of an obligation, must issue to the debtor a quittance indicating to what extent, in part or in full, the performance has been made.


2. In the event where the creditor has documentary evidence of the debt issued by the debtor, he must, upon accepting the full performance of the obligation, remit this documentary evidence to the debtor or, failing that, inscribe the relevant annotation in the quittance. An inscription in the documentary evidence of the debt about the performance of the obligation shall be equalled to a quittance. If the performance does not cover the entire debt, or the creditor still needs this document for the exercise of his other rights, he shall have the right to retain it, though he must issue a quittance to the debtor.


3. If the creditor refuses to issue a quittance, to remit the documentary evidence of the debt, or to inscribe in the quittance annotation about the impossibility to remit that document, the debtor shall have the right to suspend the performance of his obligation until the document confirming the performance of the obligation is issued to him.


4. Where several actions must be performed by the debtor successively, a quittance for the two last actions shall create the presumption that the previous actions have also been performed, except in the cases where a contract or a quittance provides for otherwise.


5. If


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presumption that the previous actions have also been performed, except in the cases where a contract or a quittance provides for otherwise.


5. If the creditor issues a quittance for the principal sum, it shall be presumed that the interest and other costs have also been paid by the debtor.


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1. The creditor shall have the right to challenge transactions made by the debtor, where the debtor was not bound to make them and where they violate the rights of the creditor, while the debtor knew or ought to have known that prejudice to the creditor would result from that transaction (Paulian action). The creditor’s rights shall be considered violated if by such transaction the debtor renders himself insolvent or by which, being insolvent, he grants preference to another creditor, or the rights of the creditor are infringed in any other way.


2. A bilateral transaction may be annulled on the ground established in paragraph 1 of this Article only in the case when the third person concluding the transaction with the debtor concerned was in bad faith, i.e. he knew or ought to have known that the transaction violated the rights of the debtor’s creditor.  A gratuitous transaction may be annulled irrespectively of whether the third person is in good or bad faith.


3. The creditor shall have the right to bring an action upon the annulment of the transaction on the grounds provided in paragraph 1 of this Article within the limitation period of one year. This time limit shall be calculated from the day on which the creditor became aware or ought to have become aware of the transaction which violated his rights.


4. The annulment of the transaction shall have legal effects only in respect of the creditor who brought the action upon the annulment


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The annulment of the transaction shall have legal effects only in respect of the creditor who brought the action upon the annulment of the transaction and only to the extent that is necessary to remove the prejudice experienced by the creditor.


5. The annulment of the transaction shall have no effect upon the rights of third persons in good faith to the property which was the object of the annulled transaction.


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Article 6.67. Presumption of bad faith

It shall be presumed that the parties to a transaction by whom interests of the creditor are violated were in bad faith if:


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1) the debtor has concluded a transaction with his spouse, children, parents or other close relatives; 


2) the debtor has concluded a transaction with a legal person of which the debtor’s spouse, child, mother/father or any other close relative is the head or a member or participant of the management body who holds, directly or indirectly, by the right of ownership at least 50 per cent of the shares (member shares, contributions, etc.) in the legal person, or all of whom together hold at least 50 per cent of the shares (member shares, contributions, etc.) in that legal person;


3) the debtor, who is a legal person, has concluded a transaction with a natural person who is the head or a member of the management body of that legal person, or the spouse, child, mother/father or any other close relative of that person;


4) the value of the prestation which had to be performed by the debtor considerably exceeds the prestation presented by the other party to the transaction (disproportion of counter-obligations);


5) a transaction has been concluded upon the payment of a debt that has not yet matured;


6) the debtor, who is a legal person, has concluded a transaction with a natural person who, either himself or his spouse, children, parents, or any other close relatives, or jointly with them, is the participant of that legal person and holds, directly


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or his spouse, children, parents, or any other close relatives, or jointly with them, is the participant of that legal person and holds, directly or indirectly, by the right of ownership at least 50 per cent of the shares (member shares, contributions, etc.) in that legal person;


7) the debtor, who is a legal person, has concluded a transaction with another legal person which is controlled by the debtor, or if the head or a member of the management body of one of the parties to the transaction is a person who, directly or indirectly, separately or jointly with his spouse, children, parents or close relatives, holds by the right of ownership at least 50 per cent of the shares (member shares, contributions, etc.) in the other legal person or of the shares (member shares, contributions, etc.) in both legal persons;


8) the debtor, who is a legal person, has concluded a transaction with an association of legal persons or with any other corporation of which the debtor is a member.


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Article 6.68. Oblique action


1. A creditor whose right to claim against the debtor is certain and exigible shall be entitled to exercise the rights of the debtor by bringing an action in the debtor’s name in the event where the debtor fails to exercise these rights himself, or refuses to exercise them to the prejudice of the creditor’s interests (an oblique action).


2. An oblique action may be brought only in the instances when the creditor is necessitated to protect his rights (in the event of the debtor’s insolvency, bankruptcy proceedings instituted against him, or in any other special events) and under the condition that the time limit for the performance of obligations has matured prior to bringing the action.


3. The creditor shall have no right to demand exercising of such debtor’s rights which are related exceptionally with the person of the debtor.


4. A person against whom an oblique action of the creditor is brought may set up against the creditor all the objections and defences he could have set up against the debtor.


5. Upon the satisfaction of an oblique action, the recovered property shall be set off against the property of the debtor and shall benefit all his creditors.


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Article 6.69. Right of retention


1. The creditor shall be entitled to avail himself of the right of retention of a thing until the obligation is performed by the debtor.


2. The procedure for the implementation of the right of retention shall be established by the provisions of Book Four of this Code.

 


CHAPTER V

SECURING THE PERFORMANCE OF OBLIGATIONS

 


Article 6.70. Ways of securing the performance of obligations


1. The performance of obligations may be secured under the contract or laws by penalty, pledge (hypothec), suretyship, guarantee, earnest money or in any other way provided for in the contract. Relationships related to pledge (hypothec) shall be regulated by the provisions of Book Four of this Code.   


2. Securing the performance may apply to both the existing and future obligations.

 


SECTION ONE

PENALTY


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SECTION ONE

PENALTY

 


Article 6.71. Concept of penalty


1. A penalty shall mean a sum of money determined by the law, contract or court which the debtor must pay to the creditor in the case of failure to perform an obligation, or defective performance thereof (fine, late payment interest).


2. The penalty may be expressed as a concrete sum of money or as a percentage of the amount of the secured obligation.


3. The penalty stipulated for a delay in performance of an obligation may be established for every day, week, month, etc. that exceeds the time limit for performance.

 


Article 6.72. Form of agreement upon penalty

The clause by which it is agreed upon a penalty must be made in writing.


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Article 6.73. Penalty and actual performance of an obligation


1. Where an obligation with a penal clause is established, the creditor may not demand from the debtor both the actual performance of the obligation and the penalty, except in cases where the debtor misses the time limit for performance of the obligation. An agreement between the parties providing for any other stipulation shall be null and void. The sum stipulated in the penal clause shall be set off against damages in the case where compensation of damages is claimed.


2. The amount of penalty stipulated may be reduced by the court when it is manifestly excessive, or if the creditor has already benefited from partial performance of the obligation, although the sum may not be reduced below the damages payable for the failure to perform the obligation or for defective performance thereof. No reduction of the penalty paid shall be allowed.


3. The provisions of this Article shall not apply in the instances where it is otherwise provided for by this Code in respect of certain types of contracts.

 


Article 6.74. Voidability of agreement upon penalty

Where the transaction from which the obligation has arisen is declared void in accordance with the procedure established by laws, any agreement upon securing the performance of such an obligation by way of penalty shall also be void.


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Article 6.75. Burden of proof

The burden to prove the fact of the proper performance of the obligation shall be placed on the debtor by whom the obligation to pay the penalty is disputed on the basis of assertion that the obligation has already been performed by him.

 


SECTION TWO

SURETYSHIP

 


Article 6.76. Concept of a contract of suretyship


1. Suretyship shall mean a contract by which the surety binds himself to be liable towards the creditor of another person gratuitously or for a remuneration in the event where the person in whose favour suretyship is granted fails to perform the obligation in whole or in part.


2. Suretyship shall be an accessory obligation (dependent upon the obligation of the principal debtor for which it has been entered into).  Suretyship shall terminate upon the extinguishment of the principal obligation or it having been declared void.


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Article 6.77. Grounds for suretyship


1. Suretyship shall result from a contract of suretyship or shall be imposed on the basis of laws, or a court judgment.


2. Suretyship may be granted for an obligation irrespective of the request of the person for whose obligation it is being granted, also irrespective of the identity of the person who binds himself.


3. A person may become surety either for the principal debtor or for his surety. 


4. The creditor shall have the right to require a surety to be a concrete person named by the creditor.  In the case where the creditor does not express such a requirement, the debtor must propose as surety a person with sufficient property to perform the obligation.


5. Where a debtor is bound to furnish suretyship on the grounds of laws (legal surety) or a court judgment (judicial surety), he shall have the right to present other adequate security for performance of the obligation instead of suretyship.


6. Disputes whether the property of the surety is sufficient, and whether the security offered is adequate shall be decided by the court.


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Article 6.78. Obligations secured by suretyship


1. Suretyship may be contracted for both already existing obligation and those which will arise in future, but in any event, suretyship may be applied only for the performance of a sufficiently specified obligation.


2. Suretyship may also be contracted for a part of the principal obligation. Suretyship may not be contracted for an amount in excess of that owed by the debtor.  Suretyship may not be contracted under any other onerous conditions. Where the sum secured by suretyship extends beyond the limits of the debt for which it was contracted, it must be reduced to the amount of the debt.


3. Suretyship shall extend to all the accessories of the principal obligation.

 


Article 6.79. Form of a contract of suretyship

Suretyship must be contracted in written form. Non-observance of this requirement shall result in the voidability of the contract.


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Article 6.80. Relationship between the surety and the creditor


1. At the request of the surety, the creditor must provide him with information about the content and conditions of the principal obligation, as well as about its performance.


2. The surety shall have the right to require from the creditor exaction to be levied first on concrete property of the principle debtor, except in the cases where the surety has expressly renounced this right. Where the creditor failed to comply with the instruction of the surety, and did not levy the exaction first on the indicated concrete property of the principle debtor, the creditor shall be liable for any subsequent insolvency of the principle debtor up to the value of the property indicated. These rules shall not apply in the instances of solidary liability of the principal debtor and the surety towards the creditor (paragraph 1 of Article 6.81 of this Code).


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Article 6.81. Liability of the surety


1. If the debtor fails to perform the obligation, both the debtor and the surety shall be liable as solidary debtors towards the creditor for the performance of this obligation unless otherwise provided for by the contract of suretyship.


2. The surety shall be liable to the same extent as the debtor (for the payment of interest and penalty, compensation for damages) unless otherwise established by the contract of suretyship.  


3. Where several persons become sureties of the same debtor for the same debt, they shall be solidarily liable unless otherwise provided for by the contract of suretyship.


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Article 6.82. Rights and duties of the surety arising as a result of an action brought against him


1. In the event where the creditor brings an action against the surety, the latter must implead the debtor. Otherwise, the debtor shall have the right, in the case of a counter-claim brought by the surety, to set up against the creditor all the defences he is entitled to.


2. The surety shall have the right to set up against the creditor all the defences which could be set up by the debtor.  The surety shall not lose his right to set up such defences even when the debtor refuses his defences or admits his obligation.


3. The surety shall be entitled to avail himself of all other rights which may be exercised by the debtor (dispute a debt, apply a set-off, suspend performance of the obligation, etc.), with the exception of those which are exceptionally related to the person of the debtor.


4. A postponement of the performance of an obligation granted to the debtor by the creditor shall also apply to the surety.


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1. All the rights of the creditor arising from a certain obligation shall pass to the surety by whom that obligation has been performed.


2. The surety who has bound himself at the request of the debtor or with his consent, and who has performed the obligation shall have additional right to claim from the principal debtor compensation for all the damages incurred in relation with the suretyship; he shall also have the right to charge interest on the sum paid to the creditor even if the principal debt is not producing interest. The surety who has bound himself without the knowledge of the debtor may only claim from him what the debtor would have been bound to pay, including damages, if there had been no suretyship.


3. Each of several co-sureties shall have the right by way of recourse to claim from the debtor what he has paid.


4. After the surety has performed the obligation, the creditor must deliver to him the documents confirming the right of claim against the debtor, as well as the rights by which such claim is secured.


5. In the event where the surety fails to inform the principal debtor that he has performed the obligation, he shall have no right of recourse against the principal debtor who, being unaware of this performance, effectuates it repeatedly. The same effect shall be produced in the case where the surety performs the obligation without informing the principal debtor at the time when the principal debtor has already acquired the right to set


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produced in the case where the surety performs the obligation without informing the principal debtor at the time when the principal debtor has already acquired the right to set up against the claim of the creditor defences that could have enabled him to have the debt declared extinguished. Nevertheless, in both of these cases the surety shall retain his right of claim for recovery of the sums that were not due to the creditor.


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Article 6.84. Right of recourse of the surety performing a solidary obligation

If several persons acted as sureties for the same obligation, and the obligation was performed by one of the co-sureties, the co-surety who has performed the obligation shall have the right of recourse against the other co-sureties for their respective shares in the event where those sums cannot be recovered from the debtor.

 


Article 6.85. Duty of the debtor to inform the surety about the performance of the obligation

The debtor who has performed the obligation secured by suretyship must immediately inform the surety about the performance. Otherwise, the surety, who in his turn has performed the obligation, shall retain the right of recourse against the debtor. In this case, the debtor shall be entitled to recover from the creditor only what has been received by him not due.

 


Article 6.86. Relief of the surety from liability

Where the creditor refuses his priority right in the satisfaction of his claim, or declines any other security of the obligation established in his favour, the surety shall be released from liability if the creditor would have been able to satisfy his claim by exercising the rights which he has refused.


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Article 6.87. Termination of suretyship


1. Suretyship shall be terminated at the time of extinguishment of the obligation which was secured by it.


2. Suretyship shall also be terminated by the death of the surety.


3. If the qualities of a surety and debtor are united in the same person, suretyship shall remain in force if the creditor has an interest in its continuation.


4. Unless the contract of suretyship provides for otherwise, suretyship shall be terminated if the obligation is changed in essence, and such change without the consent of the surety results in the increase of his liability, or in any other consequences unfavourable thereto.


5. Suretyship shall be terminated if the debt according to the secured obligation is assumed by another person and the surety does not give his consent to the creditor to extend suretyship over in respect of the new debtor.


6. Suretyship shall be terminated where the creditor without any grounds refuses to accept a proper performance of the obligation offered by the debtor or the surety.


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Article 6.88. Termination of suretyship contracted for a determinate period


1. Suretyship contracted for a determinate period or with a view of performing an obligation with a fixed term shall be terminated if the creditor does not bring an action against the surety within three months from the day on which the contract of suretyship or the time limit for performance of the obligation expires.


2. Where suretyship by which a future obligation is secured is contracted for a determinate period, it shall terminate on the day of expiration of the time limit for suretyship if the obligation has not arisen before the expiration of this time limit.


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Article 6.89. Termination of suretyship contracted for an indeterminate period


1. In absence of any agreement to the contrary, where suretyship is contracted for an indeterminate period, or where the time limit for performance of an obligation is not indicated or determined by the moment of demand for performance, suretyship shall be terminated upon the expiry of two years from the day on which the contract of suretyship was concluded if the creditor does not bring an action against the surety within this time limit.


2. Where a future obligation is secured by suretyship contracted for an indeterminate period, the surety may, by his unilateral notice, dissolve it upon expiry of three years from its contraction if during the three years the obligation has not become exigible. The surety must immediately inform in writing the debtor and the creditor of the dissolution of suretyship.

 


SECTION THREE

GUARANTEE


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SECTION THREE

GUARANTEE

 


Article 6.90. Concept of a guarantee


1. A guarantee shall mean a unilateral obligation of a guarantor by which he binds himself within the sum indicated in the guarantee to be liable fully or in part towards another person (creditor) if a person (debtor) fails to perform an obligation, or performs it improperly; the guarantor also binds himself to compensate the creditor for damages under certain conditions (when the debtor becomes insolvent, and in other cases). The guarantor shall be subsidiarily liable.  


2. The obligation of the guarantor towards the creditor shall not depend on the principal obligation the performance of which is secured by it; a guarantee shall be an independent obligation even in the cases when the principal obligation is indicated in the guarantee.


3. A guarantor who has performed the obligation for a debtor shall acquire the right of recourse against the latter.

 


Article 6.91. Form of a guarantee

A guarantee must be drawn up in writing. Failure to meet this requirement shall render the guarantee null and void.


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1. The obligation of a guarantor shall be subsidiary and limited to the amount for which the guarantee was issued.


2. In the event where the guarantor fails to perform his obligation under the contract of guarantee, or performs it improperly, his liability towards the creditor for damages suffered as a consequence of violation of the guarantee shall not be limited to the amount for which the guarantee was issued.


3. Upon receiving the demand of the creditor to perform the obligation, the guarantor must immediately inform the debtor and submit to him copies of the creditor’s demand with the documents appended.


4. The guarantor shall have the right to refuse satisfaction of the creditor’s demand if this demand or the documents appended thereto do not correspond to the conditions of the guarantee, or they were submitted after the expiry of the time limit established for the guarantee. The guarantor must immediately notify the creditor about the refusal to satisfy his demand.


5. Where the guarantor becomes aware that the principal obligation secured by the guarantee has been performed in full, or has been terminated on other grounds, or has been declared null and void, he must immediately notify of this the creditor and the debtor.  In the event where after such notification the guarantor receives a repeated demand of the creditor to perform the obligation, he must satisfy it only upon the presentation by the creditor of proof that the obligation has not been terminated and continues to be valid.


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Article 6.93. Bank guarantee


1. Under a contract of a bank guarantee, the bank or any other credit institution (guarantor) shall bind itself in writing to pay to the debtor’s creditor upon his demand a sum of money fixed in the guarantee.


2. The debtor shall pay the guarantor the remuneration stipulated in the contract concluded between the debtor and the bank for the granting of a bank guarantee,


3. The bank guarantee shall enter into force from the moment of its granting unless otherwise provided for in the guarantee.      


4. The demand of the creditor concerning the performance under a bank guarantee must be submitted to the guarantor in writing with all the necessary documents appended. It must be indicated in the demand in what manner the debtor has violated the principal obligation secured by the guarantee.

 


Article 6.94. Irrevocability of a bank guarantee

The bank may not revoke any guarantee it has granted unless otherwise provided for by the contract of a guarantee.

 


Article 6.95. Prohibition to assign the right of claim

The creditor shall not be entitled to assign to another person the right of claim secured by the bank guarantee unless otherwise provided for in this guarantee.


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Article 6.96. Termination of a bank guarantee


1. A bank guarantee shall be terminated:


1) upon the payment by the bank to the creditor of the amount for which the guarantee was issued;


2) by the expiration of the time limit for the guarantee established by the contract of guarantee;


3) by the creditor’s renunciation of his rights arising from the guarantee and the return thereof to the bank, or information of the bank about the renunciation in writing.


2. Upon becoming aware that the guarantee has terminated, the bank must notify the debtor without delay.

 


Article 6.97. Right of recourse of the bank


1. The bank and the debtor may establish by a contract the right of recourse of the bank against the debtor after the bank effectuates to the creditor the payment of the sum of money stipulated in the guarantee.


2. The bank shall not have the right within the procedure of recourse to claim from the debtor compensation of the amounts paid not in accordance with the guarantee, or the amounts paid for non-performance or improper performance of the obligation of the bank to the creditor.

 


SECTION FOUR

EARNEST MONEY


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SECTION FOUR

EARNEST MONEY

 


Article 6.98. Concept of the earnest money


1. Earnest money shall be deemed to be a monetary amount issued by one contracting party from the payments due to be paid by it under a contract to the other party to prove the conclusion of the contract and secure its performance.


2. The earnest money may not be used for securing a preliminary contract, likewise a contract that must be concluded in the obligatory notarial form.

 


Article 6.99. Form of an earnest money agreement


1. An earnest money agreement must be concluded in the written form irrespective of the amount of the earnest money.


2. An earnest money agreement which does not meet the requirement of the written form shall be null and void.


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Article 6.100. Consequences of non-performance of an obligation secured by the earnest money


1. If the party which issues the earnest money is liable for non-performance of the contract, the earnest money shall remain with the other party. In the event where the party to whom the earnest money was handed over is liable for non-performance of the contract, it must pay to the other party double the amount of the earnest money.


2. In addition, the party who is liable for non-performance of the contract must compensate the other party for damages, including the earnest money, unless otherwise provided for by the contract.

 


CHAPTER VI

ASSIGNMENT OF A CLAIM


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Article 6.101. Right of the creditor to assign a claim


1. The creditor shall have the right, without the consent of the debtor, to assign to another person all or a part of the claim provided that the assignment does not contradict the laws or the contract, or the claim is not related with the person of the creditor. The assignment of the claim must not prejudice the rights of the debtor and must not render his obligation more onerous.


2. By effect of the assignment, the claim shall be transferred to the assignee with the privileges established for the security of performance of the obligation and other accessory rights.


3. A future claim shall be likewise subject to assignment.


4. The right of claim shall be transferred to another person by operation of law in the following cases:


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1) upon universal assumption of the rights of the creditor;


2) where the rights of the creditor under a court judgment are delegated to another person if such possibility is provided for by laws;


3) where the surety or the pledgor of the debtor, who are not parties to the secured obligation, perform the obligation for the debtor;


4) where within the procedure of recourse the rights of the creditor connected with the debtor responsible for the insurance event are transferred to an insurance company;


5) in other cases provided for by law.


5. In the event where the person of the creditor is of essential importance to the debtor, the creditor shall be prohibited from assigning the claim without the consent of the debtor.


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Article 6.102. Cases in which the assignment of a claim is prohibited


1. The assignment of a claim against which recourse cannot be taken shall be prohibited.


2. Judges, public prosecutors and advocates cannot become assignees of claims in respect of which litigation has arisen in the court within whose jurisdiction they exercise their functions.


3. It shall be prohibited to assign a claim inseparably related with the person of the creditor (claim for maintenance, claim for compensation of damage caused by impairment of health or loss of life, etc.).

 


Article 6.103. Form of the contract

The form of a contract upon assignment of a claim shall be subject to the same requirements as prescribed for the principal obligation.


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1. The creditor who has assigned his claim to another person must hand over to the new creditor the documentary evidence pertaining to the claim and the accessory rights, including the right to receive interest.  If such documents remain of importance to the previous creditor, he must hand over to the new creditor copies of the documents certified in accordance with the established procedure.


2. The assignment of a claim the performance of which is secured by a pledge (hypothec) must be inscribed in the public register.  In this case, the previous creditor and the new creditor must take measures in order to ensure that relevant inscriptions are made in the public register. 


3. In the event of assignment of the universality of claims, the previous creditor must deliver to the new creditor any pledged property which is under his control.


4. All expenses relating to the execution and delivering of the documents stipulated in paragraphs 1 and 2 of this Article shall be covered by the new creditor unless otherwise provided for by the contract.


5. The claim confirmed by a bearer security issued by the debtor shall be assigned by handing over the bearer security to the new creditor. In this case, the debtor must perform the obligation to any person who hands over the security to him.  In this event, the debtor shall neither be entitled to setting up any objections or defences other than a claim for acknowledging the nullity of the bearer security.


6. A creditor who has been


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to setting up any objections or defences other than a claim for acknowledging the nullity of the bearer security.


6. A creditor who has been dispossessed of a bearer security against his will may prevent the debtor from performing the obligation to the person who presents the security exclusively by means of instituting judicial proceedings.


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Article 6.105. Liability of an assignor (previous creditor)


1. The assignor (previous creditor) shall be liable towards the assignee (new creditor) for the invalidity of the assigned claim, though he shall not be liable for the debtor’s non-performance of the obligation arising from this claim, except in the cases when the assignor gives a surety to the assignee for the debtor.


2. Where the right of claim is assigned gratuitously, it shall be deemed that the assignor affirms that the right of claim exists, and is owned by him even if such affirmation is not provided for by the contract (statutory guarantee), with the exception of cases where the assignee acquires the right of claim at his own risk, or at the time of the assignment, he was aware or ought to have been aware of the uncertain nature of the right of claim. 


3. Where the right of claim is assigned for consideration, the assignor shall be liable only for the insolvency of the debtor that existed at the time of the assignment, and only to the extent of the amount he received for that assignment.


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Article 6.106. Performance of an obligation in favour of the assignor by the debtor uninformed about the assignment of the claim


1. In the event of failure to inform the debtor that the claim has been assigned, the performance of the obligation in favour of the assignor shall be deemed to be proper.  If the claim has been assigned several times, the performance of the obligation in favour of any subsequent creditor shall be deemed to be proper.


2. In the case of a dispute over the pretension to the claim, the debtor shall have the right to refuse payment to any concrete creditor and perform the obligation by depositing a sum into the depository account of a notary office, bank or any other credit institution.


3. In the instances where the debtor pays the debt being aware of the dispute indicated in paragraph 2 of this Article, he shall do so at his own risk.


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Article 6.107. Defences of the debtor against the claims of the assignee (new creditor)


1. The debtor shall have the right to set up against the assignee all the defences which he was entitled to set up against the assignor at the time of receiving the notice about the assignment of the claim.


2. After the assignment of the claim and handing over of a bearer instrument, the debtor who has issued the bearer instrument shall have no right to set up defences against the assignee based upon the assertion that the obligation is simulated or false, or the assignment is prohibited if at the time of the assignment of the claim the assignee did not know and could not have known of these circumstances.


3. In the event where, after the assignment of the claim, the debtor brings an action against the assignor for the annulment of the legal fact from which the obligation arises, the debtor must notify the assignee of this fact, except in the cases when the annulment of that legal fact cannot be invoked against the assignee.


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Article 6.108. Set-off against the assignee

A debtor who has a counter-claim against the assignor shall be entitled to a set-off against the assignee, except in the cases where at the time of acquisition of the counter-claim the debtor was aware of the assignment of the claim, or the time limit for the recovery of the assigned claim expired after he became aware of its assignment, or after the expiration of the time limit allotted for the recovery of the assigned claim.


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1. The fact of the assignment of the claim may be invoked against third persons and the debtor only from the moment when the debtor acquiesced in it, or received a copy of the document confirming the fact of the assignment of the claim, or any other evidence of the fact of the assignment of the claim.


2. Where the debtor’s whereabouts are unknown, the assignment of the claim may be announced by public notice (Article 1.65 of this Code).


3. The assignment of the right of claim, which is registered in the public register in accordance with the procedure established by laws, shall be announced in accordance with the procedure laid down by laws and the fact of the assignment shall be inscribed in the public register.


4. The assignment of a claim may not be set up by the creditor against the debtor if the creditor has given notice of this assignment to the debtor, even if the assignment would have not occurred or would have been declared void.


5. The handing over of the contract on the assignment of the claim to the assignee and presentation of that contract to the debtor shall also be deemed to constitute a notice.


6. A notice on the assignment of the claim may be renounced only with the consent of the assignee.


7. The debtor must perform the obligation to the assignee only if the latter together with the expression of his demand presents the contract on the assignment of the claim. Waiver of the


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obligation to the assignee only if the latter together with the expression of his demand presents the contract on the assignment of the claim. Waiver of the obligation or a demand for the performance thereof by the assignee shall have no effect without presentation of a contract on the assignment. This rule shall not apply if the assignee has notified the debtor of the assignment of the claim in writing.


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Article 6.110. Assignment of other rights

The rules establishing the procedure for the assignment of a claim shall also apply to the assignment of other rights unless otherwise provided for by laws.

 


CHAPTER VII

TRANSFER OF A CLAIM TO A THIRD PERSON WITHIN THE PROCEDURE OF RECOURSE

(SUBROGATION)  

 


Article 6.111. Grounds for subrogation

Subrogation may be effectuated on the basis of a written contract or laws.

 


Article 6.112. Cases of subrogation

A claim shall be transferred to a third person by way of subrogation when:


1) the claim is satisfied from the property of the third person;


2) the obligation is performed for the debtor by the third person whose property was pledged in securing the performance of obligation;


3) the third person performs the obligation for the debtor in order to prevent seizure of property, even though the property does not belong to him, where the seizure would make him lose whatever rights he has in that property;


4) the debtor and the third person who has paid the debt concludes a contract upon the payment of the debt, provided that the creditor knew of this contract at the time of payment, or had been notified thereof.


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Article 6.113. Rights acquired as a result of subrogation

A third person who is subrogated to the rights of the creditor may not acquire more rights than the subrogating creditor.

 


Article 6.114. Subrogation by operation of law

A claim shall be transferred to a third person according to subrogation by operation of law in the following cases:


1) in favour of the creditor who pays the debt to another creditor whose claim has preference to his by virtue of its securement in the form of a pledge (hypothec) or by the priority of claim;


2) in favour of the acquirer of the property when he performs an obligation towards the creditor whose claim is secured by a pledge (hypothec) on that property;


3) in favour of a person who performs the obligation to which he is bound with other debtors, or has reasonable interest in the performance thereof;


4) in favour of a heir who at his expense performs the obligation of succession for which he was not bound;


5) in other cases provided for by law.

 


CHAPTER VIII

DELEGATION OF DEBT


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CHAPTER VIII

DELEGATION OF DEBT

 


Article 6.115. Delegation of debt by a contract between the creditor and the new debtor (delegee)

A third person may by the effect of a contract with the creditor accept the rights and duties of the debtor.


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Article 6.116. Delegation and assumption of debt by the effect of a contract between the debtor and the person who assumes the debt (delegee)


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1. Delegation of debt may be effectuated by the debtor exclusively with the consent of the creditor unless otherwise provided for in other laws governing the stability and soundness of financial institutions and the system of financial institutions. The consent shall be given only after the creditor is notified of the intended delegation by the debtor and the person who assumes the debt (delegee).  Until the creditor has consented, the contract may be modified or terminated by the parties. After the consent of the creditor is received, the contract between the initial and the new (delegee) debtor may not be modified.


2. The creditor’s consent for delegation of the debt may be given in advance.  The creditor shall have no right to revoke his consent given in advance unless he has reserved this right in the said consent.


3. If the creditor has not given his consent, delegation of the debt shall be deemed not to have been effectuated.  In the event where the debtor and the person who assumes the debt (delegee) establish a time limit during which the consent of the creditor must be given, the consent may be given within the period provided. If no consent of the creditor is given within the established time limit, it shall be deemed that the creditor has not consented to the delegation of the debt.


4. Pending the expression of consent or dissent by the creditor, the person who assumes the debt (delegee) shall be


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Pending the expression of consent or dissent by the creditor, the person who assumes the debt (delegee) shall be bound to the debtor for the performance of the obligation in favour of the creditor.


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Article 6.117. Delegation of a debt secured by pledge (hypothecated debt)   

Upon effectuation by the debtor delegation of a debt secured by pledge (hypothecated debt), the right of pledge to the property of the debtor shall remain valid. 

 


Article 6.118. Form of the contractual delegation and assumption of debt

The contractual delegation and assumption of debt must be made in writing.

 


Article 6.119. Defences available to the person who assumes a debt (delegee)


1. The new debtor (delegee) shall have the right to invoke against the creditor all the defences based upon the obligatory relationship between the creditor and the initial debtor. Nevertheless, the claim of the initial debtor cannot be claimed by the new debtor (delegee) for a set-off.


2. The new debtor (delegee) may not invoke against the creditor the defences based upon the relationship between the initial debtor and the person who has assumed the debt (delegee) which formed the basis for the delegation of the debt.


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Article 6.120. Accessory rights


1. Upon the change of the debtor in the effect of the assumption of a debt, all accessory rights of the creditor shall remain unchanged provided that they are not purely personal in respect of the initial debtor.


2. Suretyship and pledge granted by a third person shall be extinguished by the delegation of the debt if the surety or the pledgor do not expressly state their consent to be liable for the new debtor (delegee).

 


Article 6.121. Effects of invalidity of a contract of delegation of debt


1. If a contract of delegation of debt is declared null and void, the obligations of the initial creditor, likewise all his accessory rights and responsibilities arising therefrom shall be restored; although the rights of third persons in good faith shall be retained.


2. The creditor shall have the right to claim against the person who has assumed the debt (delegee) compensation of damages resulting from the invalidity of contract of delegation of debt, except in the instances where the invalidity of that contract and the resulting damages were not conditioned by the delegee’s fault.


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Article 6.122. Assumption of property or a legal person


1. A person who has assumed property or an enterprise with its assets and liabilities shall also assume the rights and obligations connected with the property assumed.


2. Assumption of obligations in the cases of reorganisation of a legal person shall be regulated by the provisions of Book Two of this Code.

 


CHAPTER IX

EXTINCTION OF OBLIGATIONS

 


SECTION ONE

GENERAL PROVISIONS OF EXTINCTION OF OBLIGATIONS

 


Article 6.123. Extinction of an obligation by performance


1. An obligation shall be extinguished by its proper performance. It shall likewise be extinguished where a creditor has accepted the performance of a different kind in substitution for the one originally called for.


2. After the acceptance of performance by the creditor, the burden of proof of non-performance or the improper performance thereof shall fall on the creditor.


3. Extinction of an obligation by a proper performance shall entail termination of all accessory rights and liabilities arising from this obligation.

 


Article 6.124. Extinction of an obligation by the expiry of a resolutory time limit

An obligation shall be extinguished by the expiry of a resolutory time limit which is a condition for the termination of the obligation.


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Article 6.125. Extinction of an obligation by agreement of the parties


1. An obligation may be extinguished in whole or in part by agreement of the parties thereof. Such agreement may be concluded in any form, except in cases where its obligatory written or notarial form is established for the arising of the obligation.


2. An obligation may be extinguished by a unilateral statement of the party to the obligation only in cases provided for in laws or a contract.


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Article 6.126. Extinction of an obligation by confusion


1. An obligation shall be extinguished where the qualities of creditor and debtor are united in the same person. 


2. Where confusion ceases to exist, the obligation shall be restored unless it has been extinguished upon other grounds.


3. The confusion of the qualities of the parties to the obligation shall not affect the rights of third persons.


4. An obligation may not extinguish by confusion if the claim and the debt are related with separate and unconnected property.


5. In the event of suretyship, confusion of the qualities of creditor and debtor shall result in the extinction of the suretyship.


6. Confusion of the qualities of surety and creditor, or of surety and principal debtor shall not be the grounds for the extinction of the principal obligation.


7. Confusion of the qualities of creditor and one of the solidary debtors, or of debtor and one of the solidary creditors shall be the grounds for the extinction of the obligation only to the extent of the share of that solidary debtor or solidary creditor.


8. A pledge (hypothec) shall be extinguished by confusion of qualities of hypothecary creditor and the owner of the pledged property. However, if a creditor is evicted for a cause which is not imputable to him, the pledge (hypothec) shall revive.


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Article 6.127. Extinction of an obligation by impossibility of its performance


1. An obligation shall be extinguished when its performance becomes impossible as a consequence of superior force which is not imputable to the debtor. An obligation shall extinguish upon these grounds only in that event if the superior force arose before the obligation was violated by the debtor.  The burden of proof of a superior force shall fall on the debtor. In the event where the performance was rendered impossible only in part, the obligation shall be extinguished when the debtor performs that part of the obligation whose performance is still possible.


2. In the event indicated in paragraph 1 of this Article, the debtor in a bilateral contract who has been released by impossibility of performance must return all the benefits which he has received from the other party, and he shall have no right to claim performance of the remaining part of the unperformed obligation of the creditor in accordance with the contract.


3. If the performance of the obligation has become impossible by reason of unlawful acts of state or municipal institutions, the parties may claim compensation of damages from the state or municipal budget. When such act is annulled, the obligation shall revive unless otherwise conditioned by the contract of the parties or the essence of the obligation, or the creditor has already lost interest therein.


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Article 6.128. Extinction of an obligation upon the death of a natural person or liquidation of a legal person


1. An obligation shall be extinguished upon the death of a debtor if it cannot be performed without the participation of the debtor himself, or if it is in any other way inseparably connected with the person of the debtor.


2. An obligation shall be extinguished upon the death of a creditor where the performance of the obligation was assigned to the creditor personally, or where it is in any other way inseparably connected with the person of the creditor.


3. An obligation shall be extinguished upon the liquidation of a legal person (a creditor or a debtor), except where it is stipulated by laws that the obligation must be performed by other persons.


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1. An obligation shall be extinguished where the creditor releases his debtor from performance of the obligation, or declares the obligation to be non-existent if such release does not violate the rights of third persons towards the property of the creditor.


2. Release must be expressed in a clear and unequivocal manner.   Release may be onerous or gratuitous.


3. Release shall be complete unless clearly stipulated by the creditor to be partial.


4. A creditor shall be presumed to grant a debtor release of the debt where the creditor voluntarily surrenders the document evidencing the debt to the debtor unless the circumstances indicate that the document evidencing the debt has been surrendered to the debtor after he has performed the obligation.


5. The creditor’s offer addressed to the debtor regarding the latter’s onerous release from performance of an obligation shall be considered accepted if it is not rejected by the debtor immediately upon receipt.


6. In the event where an obligation is solidary, release granted to one of the solidary debtors shall release the other co-debtors only from the performance of the released person’s part. Express release granted by one of the solidary creditors to a debtor shall release the debtor only from the performance of the part in which the claim of that creditor can be brought.


7. Express renunciation of a pledge (hypothec) or any other kind of security of performance of obligation


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creditor can be brought.


7. Express renunciation of a pledge (hypothec) or any other kind of security of performance of obligation made by a creditor shall not constitute any grounds for acknowledging that the debtor has been released from performance of the principal obligation.


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SECTION TWO

SET-OFF

 


Article 6.130. Extinction of an obligation by a set-off


1. An obligation shall be extinguished by a set-off of a counter-claim which is of the same kind and its time limit has expired, or the time limit of its performance is not fixed, or it is defined by the moment of the demand to perform the obligation.


2. A set-off or refusal to make a set-off shall have no effect in respect of the rights acquired by a third person in good faith.


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Article 6.131. Procedure of a set-off


1. Declaration of intention made by one party shall be sufficient for the effectuation of a set-off.


2. A set-off shall be effectuated by notifying the other party to the obligation thereof. The notification shall be deemed of no effect where the set-off is made dependable upon a certain condition, or a time limit established thereto.


3. Where the creditor possesses documentary evidence of the debt issued by the debtor, the set-off shall be effectuated by inscribing the declaration of a set-off in the document and by remitting it to the debtor.


4. If a set-off does not cover the entire claim, or where the creditor still needs the documentary evidence of the debt to exercise his other rights, the creditor shall have the right to retain the document with the inscription upon the set-off, although the creditor must also furnish the debtor with a written notice of the set-off.

 


Article 6.132. Period of grace in a set-off

A period of grace granted to the debtor for payment of one of the debts shall not prevent the application of a set-off.


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Article 6.133. Set-off when the obligation is performed in a different place


1. The fact that the obligation must be performed in a different place shall not prevent the application of a set-off.


2. In the case indicated in paragraph 1 of this Article, the party to the obligation who avails itself of the right of a set-off must compensate for the damages suffered by the other party as a consequence of the obligation not being performed at the place agreed.

 


Article 6.134. Prohibition to effect a set-off


1. It shall be prohibited to effect a set-off of the following:


1) claims disputed within the judicial proceedings;


2) claims arising from a contract for the constitution of a life annuity;


3) claims the performance of which is connected with the person of a concrete creditor;


4) claims for damage suffered by reason of bodily injury or death;


5) claims against the State; although, the State has the right to effect a set-off;


6)  where the subject matter of an obligation is property which is exempt from recovery;


7) other claims provided for by law.


2. A debtor shall not be entitled to the right of a set-off if he is bound to compensate for damages resulting from his actions performed with the intention to harm.


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Article 6.135. Set-off in suretyship relations


1. A surety may refuse to satisfy the claim of the creditor if the principal debtor is entitled to the right of a set-off.


2. A surety shall have the right to effect a set-off for what the creditor owes to the principal debtor, i.e. by considering the relationships between the creditor and the debtor, but the principal debtor shall not have the right to effect a set-off in the interrelations of the creditor and the surety, i.e. for what the creditor owes to the surety.

 


Article 6.136. Set-off in the case of assignment of a claim

Where a claim is assigned, the debtor shall have the right to use for a set-off his claim against the previous creditor for the satisfaction of a claim of the new creditor (assignee) if the time limit of the debtor’s claim expired before the day when the notice about the assignment of the claim was received by him, or if the time limit is not established, or if it is defined by the moment of a demand to perform the obligation, with the exception of cases provided for in Article 6.108 of this Code.


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Article 6.137. Set-off in the case of a solidary obligation


1. A solidary debtor may not use a set-off for what the creditor owes to his co-debtor, except for the share of that co-debtor in the solidary debt.


2. A debtor (whether solidary or not) may not use a set-off against one of the solidary creditors for what another co-creditor owes him, except for the share of that co-creditor in the solidary debt.

 


Article 6.138. Set-off in the case of several debts

Where several debts are owed by one debtor to the same creditor, a set-off shall be effected by applying the rules of priority of imputation of payment established in Articles 6.54 to 6.55 of this Code.

 


Article 6.139. Set-off in a contract concluded in favour of a third person

A person who has assumed an obligation in favour of a third person shall have no right to use his own claim against the other party to the obligation for a set-off to relieve himself.


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Article 6.140. Set-off in the case of the debtor’s insolvency

After a debtor has proved to be insolvent, the claims of the creditors may be used for a set-off even though they are not due unless otherwise provided for by laws.

 


SECTION THREE

NOVATION

 


Article 6.141. Concept of novation


1. An obligation shall be extinguished when the parties by their agreement substitute the existing obligation with a new obligation of a different subject matter or different kind of performance (novation). Novation shall also be effected where a new debtor is substituted for the initial debtor who is discharged by the creditor. In such a case, novation may be effected without the consent of the initial debtor. Such conduct where by the effect of a new contract, a new creditor is substituted for the previous creditor towards whom the debtor is discharged shall likewise be considered novation.


2. Novation shall not be presumed, and the intention to effect it must be expressed clearly and unequivocally in all cases.


3. Novation shall be possible only if the previous obligation is valid.


4. It shall be prohibited to apply novation for the obligations to compensate for damage incurred by reason of bodily injury or death, also for the obligations the performance of which is connected exceptionally with the person of the parties.


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Article 6.142. Conduct that does not imply novation

Any extension or abridgement of the time limit of performance of an obligation, the issuance or change of a document confirming the existence of the obligation, and any other accessory modifications of an obligation shall not be considered novation.


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Article 6.143. Influence of novation upon accessory rights


1. The right of pledge (hypothec), also other accessory rights arising from the original obligation shall be extinguished by novation, except in the cases where the parties agree to retain them.


2. If novation is made between the creditor and one of the solidary debtors with the effect of discharging from the performance of the obligation all other co-debtors, the right of pledge (hypothec) and other accessory rights arising from the original obligation may be retained only in respect of the property of the debtor who makes the new obligation (novation) with the creditor.


3. Where novation is effected by substituting a new debtor for the initial debtor who is discharged from the performance of the obligation, pledge (hypothec) by which the performance of the obligation is secured may not be transferred to the property of the new debtor. Pledge (hypothec) attached to the property of the discharged initial debtor may be retained only with the consent of the initial debtor. In the event where a new debtor acquires from the initial debtor a thing, the rights to which are encumbered by pledge (hypothec), the pledge (hypothec) shall be retained if the new debtor consents thereto.


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Article 6.144. Other effects of novation


1. Where novation is a replacement of the original debtor, the new debtor may not invoke against the creditor the defences which he could have set up against the initial debtor, nor the defences which the initial debtor had against the creditor. However, the debtor may claim for the nullity of the transaction from which his obligation results.


2. In the event of novation of a creditor and a principal debtor, a surety of the debtor shall be released from the performance of the obligation.


3. An obligation shall not be extinguished upon the grounds provided for in paragraph 2 of this Article if the creditor requires participation of the surety in the novation and the surety refuses.

 


CHAPTER X

RESTITUTION

 


Article 6.145. Grounds for restitution


1. Restitution shall take place where a person is bound to return to another person the property he has received either unlawfully or by error, or as a result of the transaction according to which the property has been received by him being annulled ab initio, or as a result of the obligation becoming impossible to perform because of a superior force.


2. In exceptional cases, the court may modify the mode of restitution or refuse restitution altogether where it would render undue and unfair aggravation for one party and, accordingly, undue advantage to the other party.


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Article 6.146. Mode of restitution

Restitution shall be made in kind, except in the instances where this is impossible or it would cause serious inconveniences for the parties.  In these cases, restitution shall be effectuated by payment in monetary equivalence.

 


Article 6.147. Estimation of monetary equivalence


1. Monetary equivalence shall be estimated according to prices that were valid at the time when the debtor received what he is liable to restore.


2. In the case of destruction or alienation of property subject to restitution, the person must compensate for the value of the property which was at the time when the property was received, destroyed or alienated, or at the time of its restitution, taking into account whichever value is the lowest. In the event of the person liable to make restitution being in bad faith, or where the restitution is due to his fault, he must pay the highest value of the property.


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Article 6.148. Indemnity for the lost property


1. If the property is destroyed by a superior force, the restitution shall not be applied, but the debtor shall be bound to assign to the creditor the claim for indemnity for the lost property, or to deliver him the indemnity he has received for the destroyed property.


2. In the event where the debtor is in bad faith, or the restitution is due to his fault, he shall be bound to return the value of the property calculated in accordance with the rules provided in paragraph 2 of Article 6.147 of this Code, except in the cases where the debtor proves that the property would have been destroyed even if it had been in the possession of the creditor.

 


Article 6.149. Partial destruction of the property

Where the property has suffered partial loss or any other depreciation in value, the debtor shall be bound to pay the creditor monetary equivalence of such partial loss or to indemnify the depreciation in value of the property unless it results from normal wear and tear of the property.


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Article 6.150. Reimbursement of expenses relating to the care of the property

Expenses relating to the care and custody of the property subject to restitution incurred by the person who is bound to return the property shall be reimbursed in accordance with the provisions of Book Four of this Code applicable in respect of possessors in good faith and possessors in bad faith.

 


Article 6.151. Restoration of fruits and revenues


1. The fruits and revenues of the property subject to restitution shall belong to the person bound to make restitution. This person shall bear all the expenses incurred in the production of those fruits and revenues.


2. In the event where the person bound to make restitution is in bad faith, or if the restitution is due to his fault, he shall be obliged to return the fruits and revenues and to reimburse the creditor for any benefit he has derived from the property. However, the creditor must reimburse such person for the expenses incurred by him to obtain the fruits and revenues.

 


Article 6.152. Costs of restitution


1. Costs of restitution shall be borne by both parties in equal shares unless they have agreed otherwise.


2. In the event where one party is in bad faith, or the restitution is due to its fault, all costs of restitution must be borne by that party alone.


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Article 6.153. Effect of restitution on third persons


1. Third persons in good faith who, in accordance with a transaction of alienation by onerous title, have acquired property subject to restitution may invoke this transaction against a person who claims for restitution.


2. Third persons in good faith who, in accordance with a transaction of alienation by gratuitous title, have acquired property subject to restitution may not invoke this transaction against a person who claims for restitution if the time limit of prescription has not been exceeded by the latter.


3. Any other actions performed in favour of a third person in good faith may be invoked against a person who claims for restitution.

 


PART II

CONTRACT LAW

 


CHAPTER XI

GENERAL PROVISIONS


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PART II

CONTRACT LAW

 


CHAPTER XI

GENERAL PROVISIONS

 


Article 6.154. Concept of a contract


1. A contract shall mean an agreement between two or more persons to establish, modify or extinguish legal relationships by which one or several persons obligate themselves to one or several other persons to perform certain actions (or to refrain from performing certain actions) while the latter persons obtain the right of claim.


2. Contracts shall be subject to provisions of this Code that regulate bilateral and multilateral transactions.


3. Unless any exceptions from general rules are established by provisions regulating contractual relationships, the provisions of Part I of this Book that regulate general questions of the law of obligations shall likewise apply to contracts.

 


Article 6.155. Scope of application


1. General rules of contract law provided for in this Chapter shall apply to all contracts, taking into account their nature.


2. Special rules for certain types of contracts may also be established by other laws.


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1. The parties shall be free to enter into contracts and determine their mutual rights and duties at their own discretion; the parties shall also have the right to conclude other contracts not provided for in this Code if this does not contradict laws.


2. It shall be prohibited to compel another person to conclude a contract, except in cases when the duty to enter into a contract is established by laws or a free-will engagement.


3. The parties shall have the right to form a contract which contains elements of contracts of several types. Such contract shall be governed by rules regulating the separate types of contracts unless otherwise provided for by agreement of the parties, or this contradicts the essence of the contract.


4. The conditions of a contract shall be established by the parties at their own discretion, except in the cases where certain conditions of a contract are determined by the mandatory rules of law.


5. Where the conditions of a contract are established by a non-mandatory rule of law, the parties may agree on non-application of these conditions, or they may agree on any other conditions.  In the absence of such an agreement between the parties, the conditions of the contract shall be determined in accordance with the non-mandatory rule of law.


6. Where some conditions of a contract are regulated neither by laws nor by agreement between the parties, in the case of a dispute, such conditions shall be determined by a court on the basis of usages,


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laws nor by agreement between the parties, in the case of a dispute, such conditions shall be determined by a court on the basis of usages, principles of justice, reasonableness and good faith, also by application of analogy of statutes and the law.


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Article 6.157. Mandatory rules or law and a contract


1. The parties themselves may not agree on modification, restriction or abrogation of an effect or application of the mandatory rules of law, irrespective of by what law – national or international – these norms are determined.


2. Modification of the rules of law of mandatory character adopted after the conclusion of the contract shall not affect the conditions of the contract.

 


Article 6.158. Good faith and fair dealing


1. Each party to a contract must act in good faith in their contractual relationships.


2. The parties may not change or exclude by their agreement the duty established in paragraph 1 of this Article.

 


Article 6.159. Elements of a contract

The following elements shall be sufficient to render a contract valid: an agreement between legally capable parties, and, when prescribed by laws, also the form of a contract.


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Article 6.160. Types of contracts


1. Contracts may be unilateral and bilateral, onerous and gratuitous, consensual and real, contracts of successive performance and of instantaneous performance, consumer contracts and others.


2. According to the manner of their conclusion, contracts shall be divided into contracts by mutual agreement and contracts of adhesion.


3. According to the definiteness of advantages that the parties obtain, contracts shall be divided into aleatory (where receiving of advantages and the amount of the obligation of the parties is uncertain and dependant on occurrence or non-occurrence of a certain event) and commutative contracts (where the advantages and the extent of the advantages obtained by the parties are certain and determinate at the time when the contract is formed).


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Article 6.161. Public contract


1. A public contract shall be a contract concluded by a legal person (trader) that renders services or sells goods to an indefinite number of persons, i.e. to everyone who makes a request (enterprises of transport, communications, electricity, heating, gas, water supply and others).


2. In rendering services or selling goods, a legal person (trader) must enter into contracts with every person who applies for those services, with the exception of cases approved in accordance with the procedure established by laws.


3. When concluding public contracts, a legal person (trader) shall have no right to grant privileges to anyone, except in cases provided for by law.


4. Prices and other conditions of goods and services under public contracts must be equal to all consumers of the same category, except in cases expressly provided for by laws where preferential conditions may be applied to the separate categories of consumers.


5. In the cases established by laws, a legal person (trader) must submit standard conditions of a public contract to the relevant state institution for approval. In the cases established by laws, public contracts may be concluded in accordance with standard conditions approved by the relevant state institution and binding on both parties.

 


CHAPTER XII

FORMATION OF CONTRACTS


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CHAPTER XII

FORMATION OF CONTRACTS

 


Article 6.162. Formation of a contract


1. A contract shall be formed either by the proposal (offer) and the assent (acceptance) or by any other actions of the parties that are sufficient to show their agreement.


2. Where the parties agree on all essential conditions of a contract, the contract shall be effective, even though the parties have reserved an agreement as to secondary conditions. If the parties do not reach an agreement on the secondary conditions, the dispute may be resolved in judicial proceedings, taking account of the nature of the contract, non-mandatory rules of law, usages, and the principles of justice, reasonableness and good faith.


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Article 6.163. Obligations of parties in pre-contractual relationships


1. In the course of pre-contractual relationships, parties must act in good faith.


2. Parties shall be free to begin negotiations and negotiate, and shall not be liable for failure to reach an agreement.


3. A party who begins negotiations or negotiates in bad faith shall be liable for the damages caused to the other party. It shall be considered bad faith for a party to enter into negotiations or continue them without intending to reach an agreement with the other party, likewise any other actions that do not conform to the criteria of good faith.


4. The parties must disclose to each other any information of which they are aware that is of essential importance for the conclusion of a contract.

 


Article 6.164. Duty of confidentiality


1. Where in the course of negotiations one party furnishes the other with confidential information, the party that has learned or received such information shall be under the duty not to disclose it, or use it unlawfully for its own purposes, irrespective of whether a contract is subsequently concluded or not. The breach of confidentiality shall inflict liability of the faulty party in damages suffered by the injured party.


2. In such cases, the minimal amount of recoverable damages shall consist of monetary expression of benefit received.


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Article 6.165. Preliminary contract


1. A preliminary contract shall be an agreement between parties by which they obligate themselves to conclude another – principal – contract in future under the conditions negotiated in the agreement.


2. A preliminary contract must be made in writing.       Failure to comply with the requirements as to the form of the contract shall render the preliminary contract null and void.


3. In the preliminary contract, the parties must establish a time limit within which the principal contract is to be formed. In the event where such time limit is not established in the preliminary contract, the principal contract must be formed within one year from the date of the conclusion of the preliminary contract.


4. If after conclusion of the preliminary contract a party without due grounds avoids or refuses to enter into a principal contract, it must compensate the other party for the damages caused.


5. In the event where the parties fail to form a principal contract within the time limit established in the preliminary contract, the obligation to form that contract shall be extinguished.


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Article 6.166. Presumption of knowledge

An offer, acceptance, their revocation or any other communication addressed to a given person shall be presumed to become known to him at the moment when they reach the addressee’s place of residence or business (registered office) or the e-delivery box unless the addressee proves that it was impossible for him to receive the communication through no fault of his own or any of his employees.

 


Article 6.167. Offer


1. A proposal for concluding a contract shall be deemed to be an offer if it is sufficiently definite and indicates the intention of the offeror to be restricted in his rights by a contract and to be bound in the case of acceptance.


2. An offer may be addressed to a definite person or to an indeterminate number of persons (offer to the public).

 


Article 6.168. Effect of an offer


1. An offer shall become effective when received by the offeree.


2. An offer, even if it is irrevocable, may be revoked by the offeror if the notice on the revocation reaches the offeree before or at the same time as the offer.


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Article 6.169. Revocation of an offer


1. Until a contract is concluded, an offer may be revoked if the revocation reaches the offerer before he has dispatched the acceptance.


2. However, an offer may not be revoked if: 


1) it is indicated therein, whether by stating a fixed time limit for acceptance or otherwise, that it is irrevocable;


2) there were reasonable grounds for the offeree to rely on the offer as being irrevocable, and he acted accordingly.

 


Article 6.170. Termination of an offer

An offer shall lose its effect when the notice on its rejection reaches the offeror, or no reply to the offer is received within the established time limit.


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Article 6.171. Offer to the public


1. An offer to the public shall be a proposal for concluding a contract where such proposal is addressed to everyone, also the display of goods with the indicated prices on the shelves in a shop or in the shop window, or a promise to pay for the performance of certain actions.


2. Revocation of an offer to the public, if made in the same form as the offer,  shall extinguish the offer even though not all persons who are aware of the offer have received the notice on the revocation.


3. Price lists, prospectuses with prices, priced catalogues, tariffs and other information materials shall not be considered an offer to the public unless there are exceptions established by laws.

 


Article 6.172. Death, bankruptcy, liquidation or limitation of legal capacity of an offeror or an offeree 

The death, bankruptcy, liquidation, legal incapacity in this area or limitation of legal capacity in this area of an offeror or an offeree shall render an offer to conclude a contract invalid if these events occur before acceptance is received by the offeror.


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Article 6.173. Acceptance and its forms


1. A statement made by the offeree or any other conduct thereof indicating assent to the offer shall be considered acceptance.  Silence or inactivity per se shall not imply acceptance of an offer.   


2. An acceptance of an offer shall produce legal effects from the moment it is received by the offeror.


3. If by virtue of the offer, or as a result of practices which the parties have established between themselves, or of existing usages, the possibility to accept an offer without notice to the offeror (by silence or by performing factual actions) is foreseen, the acceptance shall produce legal effects from the moment when certain actions expressing the will of the offeree are performed.

 


Article 6.174. Time limit of acceptance


1. An offer must be accepted within the time limit fixed by the offeror, in the event where no time limit is fixed, within a reasonable period, taking into account concrete circumstances, including the capacities of the means of communication used by the parties.  


2. An oral offer must be accepted immediately unless, taking into account concrete circumstances, a different conclusion may be made.


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Article 6.175. Acceptance within a fixed time limit


1. The time limit for acceptance indicated by the offeror in his telegram or a letter shall begin to run from the moment the telegram is handed in for dispatch, or from the date indicated in the letter, or, if no date is indicated, from the date shown on the envelope. A time limit for acceptance indicated by the offeror by means of telecommunications terminal equipment shall begin to run from the moment when the offer reaches the offeree.


2. Official holidays or non-working days shall be included in calculating the time limit established for acceptance. However, if a notice of acceptance cannot be delivered to the offeror because the last day of the time limit falls on an official holiday or a non-working day, the time limit shall be extended until the first working day thereafter.

 


Article 6.176. Late acceptance


1. A late acceptance shall be effective if the offeror without delay informs about it the offeree or sends him an acknowledgement to that effect.


2. Where it is possible to establish from the letter or any other written notice containing a late acceptance that it was sent in time and that under normal circumstances it would have reached the offeror in due time, the late acceptance shall be deemed to be effective unless the offeror without delay informs the offeree that his offer has been extinguished.


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Article 6.177. Revocation of acceptance

An acceptance shall become invalid if the notice on its revocation reaches the offeror before or at the same time as the acceptance becomes effective.

 


Article 6.178. Modified acceptance


1. A reply to an offer which contains additions, limitations or other modifications of conditions determined in the offer shall be considered a rejection of the offer and constitute a counter-offer.


2. A reply to an offer which purports to be an acceptance but contains additional or different conditions which do not alter the essence of the conditions of the offer shall constitute an acceptance if the offeror, after receiving the reply, does not immediately object to such discrepancy. If the offeror does not object, the contract shall be deemed to be concluded under the conditions of the offer with the modifications contained in the acceptance.

 


Article 6.179. Conflict of standard conditions

Where a contract is concluded by an interchange of standard conditions of a contract made between both parties, it shall be considered that the contract is concluded on the basis of standard conditions which are common in substance unless one party clearly indicates in advance its disagreement with the standard conditions proposed by the other party, or informs without delay the other party of its disagreement upon receipt of the standard conditions.


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Article 6.180. Written confirmation

If the written confirmation which is sent by a party within a reasonable time after the conclusion of the contract, and by which the fact of conclusion of the contract is confirmed contains additional or modified conditions, such conditions shall become part of the contract unless they alter the conditions of the contract essentially, or the recipient of such confirmation objects without delay to the amendments and supplements provided.


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Article 6.181. Time and place of formation of a contract  


1. A contract shall be considered formed from the moment when the acceptance of the offeree to conclude the contract reaches the offeror unless otherwise provided for by the contract.


2. The place of formation of a contract shall be considered the place where the offeror’s residence or his business is located unless otherwise provided for by laws or the contract.


3. Where in the course of negotiations one of the parties declares that it will not consider the contract concluded until it is agreed upon specific conditions, or until the agreement is correspondingly formalised; no contract shall be deemed concluded until the parties agree on those conditions or correspondingly formalise their agreement.


4. Where a particular form is required by the law as a necessary condition of a contract, the contract shall be considered formed from the moment when the agreement of the parties is expressed in that form.


5. Where a transfer of property is required by law or by agreement between the parties as a necessary condition of a contract, the contract shall be considered formed from the moment when the relevant property is transferred.


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Article 6.182. Contract with conditions left open


1. The fact that the parties in the course of conclusion of a contract intentionally leave certain conditions to be agreed upon in future negotiations, or mandate them to be determined by third persons shall not prevent contractual relationships from coming into existence.


2. The validity of a contract shall not be affected by the fact that subsequently the parties reached no agreement on the conditions referred to in paragraph 1 of this Article, or the third persons failed to determine them, provided that there are other means or ways of determining those conditions.

 


Article 6.183. Modification clause


1. A written contract which contains a clause requiring any modification, supplementation or dissolution of the contract to be made only in writing may not be modified, supplemented or dissolved otherwise.


2. A party may be precluded by its conduct from invoking the clause provided for in paragraph 1 of this Article to the extent that the other party has acted in reliance on that conduct.


3. A contract concluded in the notarial form may be dissolved, modified or supplemented only in the notarial form.


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1. Where, under the law, the conclusion of a contract is obligatory for the party to whom the offer was sent, this party must, within 14 days from the receipt of the offer, send to the other party a notification of acceptance or rejection of the offer, or acceptance thereof under other conditions (protocol of disagreements).


2. A party who has sent an offer and received a notification of its acceptance with the protocol of disagreements must either accept the conditions indicated in the notification of acceptance, or apply to the court for the resolution of the dispute within 14 days from the date of receipt of the protocol of disagreements. 


3. Where, under the law, the conclusion of a contract is obligatory for the party who has sent an offer, this party must, within 14 days from the date of receipt of the protocol of disagreements, notify the other party about acceptance of the conditions indicated in the protocol or about rejection thereof.  In the event where the conditions indicated in the protocol of disagreements are rejected by the party that has received the protocol, or in the event of the latter’s failure to respond within the established time limit, the party that sent the protocol of disagreements shall have the right to apply to the court for the resolution of the dispute.


4. If the party for whom the conclusion of a contract is obligatory evades the conclusion thereof, the other party shall have the right to apply to the court with a request to obligate the evading


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contract is obligatory evades the conclusion thereof, the other party shall have the right to apply to the court with a request to obligate the evading party to conclude the contract and compensate for damages caused by the evading.


5. The time limits provided for in paragraphs 1, 2 and 3 of this Article shall apply unless other time limits have been established by laws or agreed upon by the parties.


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Article 6.185. Standard conditions of contracts


1. Standard conditions shall be such provisions which are prepared in advance for general and repeated use by one contracting party without their content being negotiated with the other party, and which are used in the formation of contracts without negotiation with the other party.


2. Standard conditions prepared by one of the parties shall be binding on the other party only if the latter was provided with an adequate opportunity to get acquainted with the said conditions.


3. In the event where both parties to a contract are enterprises (traders), it shall be considered that the other party was provided with the adequate opportunity referred to in paragraph 2 of this Article if:


1) the party who prepared the standard conditions delivered them in writing to the other party before or at the time of signing the contract;


2) the party who prepared the standard conditions informed the other party before the signing of the contract that the contract would be formed in accordance with the standard conditions which were accessible to the other party in the place indicated by the party who prepared the standard conditions;


3) a copy of the standard conditions was offered to be sent to the other party if requested.


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Article 6.186. Surprising standard conditions of contracts


1. No surprising condition contained in a standard condition contract, i.e. such condition that the other party could not reasonably have expected to be included in the contract, shall be effective. Standard conditions shall not be considered surprising if they were expressly accepted by the party when they were duly disclosed thereto.


2. In determining whether a condition is of surprising character, regard must be taken of its content, wording and form of expression.


3. A party who enters into a contract of adhesion where the standard conditions are drawn up by the other party shall have the right to claim for dissolution or modification of that contract in the event where, even though the standard conditions of the contract are not contrary to the law, they exclude the party’s rights and possibilities that are commonly granted in a contract of that particular type, or exclude or limit civil liability of the party who prepared the standard conditions, or establish other provisions which violate the principle of equality of parties, cause imbalance in the parties’ interests, or are contrary to the criteria of reasonableness, good faith and justice.


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Article 6.187. Conflict between standard conditions and non-standard conditions of contracts

In the event of conflict between standard conditions and non-standard conditions of a contract, preference shall be given to the latter, i.e. to those which have been individually negotiated by the parties.

 

Article 6.188. No longer effective from 13 June 2014.

 


CHAPTER XIII

EFFECTS AND FORM OF CONTRACTS

 


Article 6.189. Effects of a contract


1. A contract which is formed in accordance with the provisions of laws and is valid shall have the force of law between its parties. The contract shall bind the parties not only as to what it expressly provides, but also to all the consequences deriving from its essence or determined by laws.


2. The parties may provide that the contract shall apply to their relationships arisen before that contract was concluded.


3. It may be established by the contract or laws that the obligations of the parties under the contract shall be extinguished by the expiration of the time limit allotted for the validity of the contract.


4. The expiry of the time limit of validity of a contract shall not discharge the parties from civil liability for breach of that contract.


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Article 6.190. Effects of contracts with respect to third persons


1. Upon the death or liquidation of one of the parties, the rights and duties arising from a contract shall pass to its heirs (successors) if it is permitted by the nature of the contract, laws, or the contract itself.


2. If one of the contracting parties by a contract made in its own name promises that a third person will undertake to perform an obligation or any other action, in the event where the third person fails to perform the obligation or any other action as promised, the contracting party – the promisor – shall itself be bound to perform the obligation or any other action agreed, and to compensate for damages suffered by the other contracting party.


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Article 6.191. Contract in favour of a third person


1. If a contracting party has made a stipulation in a contract for the benefit of a third person, the stipulation shall give both the contracting party and the third person beneficiary the right to demand performance of the agreed obligation unless otherwise provided for by laws or the contract, or appears from the essence of the obligation.


2. In the case of the refusal by the third person to avail himself of the stipulation, the stipulator himself may exercise this right unless this is contrary to law, contract or the essence of the obligation.


3. The stipulation for the benefit of a third person may be revoked by the stipulator as long as the third person beneficiary has not declared of his assent to accept it.


4. If the performance is to be made to a third person only after the death of the stipulator, the latter may revoke the benefit by a testament (will).


5. The contracting party who is bound to perform an obligation may set up against the third person beneficiary such defences as it could have set up against the stipulator.


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Article 6.192. Form of a contract


1. The provisions of Articles 1.71 to 1.77 of this Code regulating the form of transactions shall apply in respect of the form of a contract.


2. Where, in accordance with the law or agreement between the parties, a contract must be concluded in a simple written form, it may be made either by drawing up one document signed by the parties, or by means of the parties exchanging written communications or information transmitted by telecommunications terminal equipment, providing the protection of the text is guaranteed and the signature of the sending party can be identified.


3. A contract may be formed by the acceptance of an order to be carried out.


4. Amendments and supplements of a contract must be made in the form in which the contract had to be made, except in the cases where it is otherwise established by laws or the contract.


5. If the parties have agreed to adopt a specified form for a contract under conclusion, the contract shall be deemed concluded only where it conforms to the form agreed, even though pursuant to the laws such form is not mandatory for the contracts of that concrete type.

 


CHAPTER XIV

INTERPRETATION OF CONTRACTS


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1. A contract must be interpreted in good faith. In interpreting a contract, it shall be necessary to seek for the real intentions of the parties without being limited by the literal meaning of the words. In the event where the real intentions of the parties cannot be established, the contract must be interpreted in accordance with the meaning that could be attributed in the same circumstances by reasonable persons in the corresponding position as the parties.


2. All conditions of a contract must be interpreted taking into account their interrelation, the essence and purpose of the contract, and the circumstances under which it was formed.  In interpreting a contract, regard must also be taken of the ordinary conditions, irrespective of their expression in the contract.


3. In the event of doubt as to concepts which may have several meanings, these concepts shall be understood in the sense most suitable to the nature, essence and subject matter of the contract.


4. In the event of doubt over conditions of a contract, they shall be interpreted against the contracting party that proposed them, and in favour of the party that accepted those conditions.  In all cases, the conditions of a contract must be interpreted in favour of consumers and the adhering party.


5. In interpreting a contract, regard must also be taken of the preliminary negotiations between the parties, practices which the parties have established between themselves, the conduct of the parties subsequent to the conclusion of the contract, and the existing usages.


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Article 6.194. Linguistic discrepancies

Where a contract is drawn up in two or more languages and all the language versions are of equal legal power, in case of discrepancy between the language versions, preference shall be given to the version which was the first to be drawn up.

 


Article 6.195. Filling in gaps of a contract

Where the parties have left undiscussed certain conditions necessary for the performance of the contract, the court may, at the request of one of the parties, eliminate such gaps in the contract by determining appropriate conditions, taking into account non-mandatory legal norms, the intentions of the parties, the purpose and essence of the contract, and the criteria of good faith, reasonableness and justice.

 


CHAPTER XV

CONTENT OF CONTRACTS

 


Article 6.196. Types of contract terms


1. The terms of a contract may be express or implied.


2. The implied terms shall follow from the essence and purpose of the contract, the nature of relationships established between the parties, and the criteria of good faith, reasonableness and justice.

 


Article 6.197. Quality of performance of a contract

Where the quality of performance is determined neither by the contract nor by the law, the quality of performance must be of reasonable quality and not lower than the average quality in the concrete circumstances.


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Article 6.198. Price of a contract


1. Where a contract does not fix the price or establish an order for determining the price, the parties shall be considered, in the absence of any indication to the contrary, to have made reference to the price commonly charged at the moment of the conclusion of the contract for such performance in comparable circumstances in the sphere of business concerned, or if such price does not exist, to a reasonable price.


2. In the event where the price is to be determined by one party, and such determination is manifestly unreasonable, it must be substituted by a reasonable price regardless of any other agreement between the parties.


3. If the price is to be fixed by a third person, and if that person does not or is unable to do so, the price of the contract shall be deemed to be a reasonable price.


4. Where the price is to be fixed by reference to the criteria which do not exist or have ceased to exist, or cannot be ascertained, the price shall be fixed by reference to the criteria which are the nearest equivalent.

 


Article 6.199. Contract for an indefinite period

A contract for an indefinite period may be terminated by either party, provided the party gives notice about its intention to dissolve the contract to the other party within a reasonable time in advance unless otherwise provided for by laws or the contract.


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CHAPTER XVI

PERFORMANCE OF CONTRACTS

 


Article 6.200. Principles of performance of a contract


1. A contract must be performed by the parties in a proper manner and in good faith.


2. In performing a contract, each party shall be bound to contribute to and cooperate with the other party.


3. In performing a contract, the parties shall be bound to use the most cost-effective means with respect to the other party.


4. Where, by virtue of a contract or its nature, a party is bound, in taking certain actions, to make the best effort in the performance of the contract, this party shall be obliged to make the same efforts that a reasonable person would have made under the same circumstances.

 


Article 6.201. Order of performance of a contract

The parties shall be bound to perform the contract simultaneously unless otherwise provided for by laws or the contract, or determined by its nature or circumstances.


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Article 6.202. Permission of a state institution  


1. Where certain laws require a permission of a relevant state institution affecting the validity of the contract or its performance, and where the law or the contract does not indicate otherwise, the measures necessary to obtain the permission must be taken by the party situated in the state, the laws of which provide for such permission.


2. Where the permission indicated in the preceding paragraph of this Article is required by the laws of the Republic of Lithuania and both parties are situated in Lithuania, the permission must be obtained by the party whose obligation to obtain it is established by the law, except in cases where the law does not establish thereof.  In such event, the parties shall be bound to agree which of them must obtain the permission.


3. The contracting party must obtain the required permission or permissions in due time.  Expenses of performance of the duty to obtain the obligatory permission shall be borne by the party under this duty unless otherwise established by the contract. This party shall also be bound to notify the other party without delay of the fact that the permission has been granted or refused.


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Article 6.203. Refusal to grant permission


1. If, notwithstanding the fact that the party has taken all measures necessary, permission is neither granted nor refused within the established period, or, where no period has been agreed, within a reasonable time, the parties shall have the right to dissolve the contract.


2. In the event where the obligatory permission affects only some terms of a contract, paragraph 1 of this Article shall not apply when it is reasonable to uphold in force the terms of the contract.


3. A refusal to grant permission affecting the validity of the contract shall cause nullity of that contract.  Where the refusal affects the validity of only some of the terms of a contract, the remaining terms of the contract shall be in force if the contract would have been formed even without the invalid terms.


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Article 6.204. Performance of contractual obligations in the event of a change of circumstances


1. Where the performance of a contract becomes more onerous for one of the parties, this party shall be bound to perform the contract in accordance with the procedure established in other paragraphs of this Article.


2. The performance of a contract shall be considered obstructed under such circumstances which fundamentally alter the balance of the contractual obligations, i.e. either the cost of performance has essentially increased, or the value thereof has essentially diminished if:


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1) these circumstances occur or become known to the aggrieved party after the conclusion of the contract;


2) these circumstances could not have been reasonably foreseen by the aggrieved party at the time of the conclusion of the contract;


3) these circumstances are beyond the control of the aggrieved party;


4) the risk of occurrence of these circumstances was not assumed by the aggrieved party.


3. In the event where the performance of a contract becomes obstructed, the aggrieved party shall have the right to make a request to the other party for the modification of the contract. Such request must be reasoned and made immediately after the occurrence of obstructions. The request for modification of the contract shall not in itself entitle the aggrieved party to suspend performance of the contract. Where within a reasonable time the parties fail to reach an agreement on the modification of the contractual obligations, any of them shall have the right to bring an action before a court. The court may:


1) dissolve the contract and establish the date and terms of its dissolution;


2) modify the conditions of the contract with a view to restoring the balance of the contractual obligations of the parties.


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CHAPTER XVII

LEGAL EFFECTS OF NON-PERFORMANCE OF CONTRACTS

 


Article 6.205. Non-performance or defective performance of a contract

Non-performance of a contract shall be deemed to be a failure to perform any of the obligations arising from the contract, including defective performance and delay of the time limit of performance.

 


Article 6.206. Actions of the other party

One party may not rely on the non-performance of the other party to the extent where such non-performance was caused by the first party’s acts or omissions, or by any other event of which the first party bears the risk.

 


Article 6.207. Suspension of performance of a contract


1. Where the parties are bound to perform a contract simultaneously, either party shall have the right to suspend performance until the other party begins to perform the contract.


2. Where the parties are bound to perform a contract consecutively, the party who is to perform later may suspend its performance until the first party has performed its obligations.


3. The parties must exercise the right provided for in paragraphs 1 and 2 of this Article reasonably and in good faith.


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Article 6.208. Elimination of defects in performance


1. The party failing to perform a contract shall be entitled to eliminate any defects in performance at its own expense if:


1) it gives notice without undue delay to the other party indicating the manner and time of elimination of defects;


2) the aggrieved party has no legitimate interest in refusing elimination;


3) elimination is effected immediately;


4) elimination is appropriate in the concrete circumstances.


2. The right of elimination shall not be precluded by a declaration of the other party on the dissolution of the contract.


3. Upon effective notice of elimination, the rights of the aggrieved party that are inconsistent with the performance of the contract shall be suspended until the expiry of the time limit allotted for elimination of the defects in performance.


4. The aggrieved party may suspend performance of its obligations until the defects in performance are eliminated by the other party, and may also claim compensation for damages.


5. The aggrieved party must cooperate with the other party during the whole period of the elimination of defects.


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1. In the case of non-performance, the aggrieved party may establish in writing an additional period of time of a reasonable length for the performance of the contract and notify the other party thereof.


2. Having established an additional period for performance, the aggrieved party may suspend the performance of its own obligations for that period and claim compensation for damages, but it may not invoke any other remedy. If the aggrieved party receives notice from the other party that the latter will not perform its obligations within the additional period, or if upon the expiry of that period the contract has not been performed, the aggrieved party may invoke other remedies available to it.


3. In the event where delay in performance is not essential violation of a contract, and the aggrieved party has established an additional period of time of a reasonable length for the performance, this party may dissolve the contract upon the expiry of that period. If the additional period is unreasonably short, it must be extended up to a reasonable length.  The aggrieved party may stipulate in its notice upon the additional period that in the case of failure on the part of the other party to perform the contract within the additional period, the contract will be unilaterally dissolved.


4. Paragraph 3 of this Article shall not apply if the obligation which has not been performed constitutes only an insignificant part of the contractual obligations of the failed party.


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Article 6.210. Interest


1. Where a debtor fails to meet his monetary obligation when it falls due, he must pay an interest at the rate of five per cent per annum on the amount overdue unless any other rate of interest has been established by the law or contract.


2. Where both parties are traders or private legal persons, the interest at the rate of six per cent per annum shall be payable for a delay in payment unless any other rate of interest has been established by the law or contract.

 


Article 6.211. Conditions excluding liability

The conditions of a contract which limit or exclude a party’s liability for non-performance of an obligation, or which permit to effectuate performance in a substantially different manner from what the other party reasonably expected, shall not be valid if, having regard to the nature of the contract and other circumstances, such conditions are unfair.


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1. A party shall be exempted from liability for non-performance of a contract if it proves that the non-performance was due to the circumstances which were beyond its control and could not have been reasonably expected by it at the time of the conclusion of the contract, and the arising of such circumstances or consequences thereof could not have been prevented. A superior force (force majeure) shall not include such circumstances as absence in the market of goods needed for the performance of the obligation, or lack of the necessary financial resources on the part of the party, or violation of their own obligations committed by the contrahents of the debtor.


2. In the event where the impedimental circumstance is temporary, the non-performing party shall be exempted from liability only for such a period which is reasonable having regard to the effect of that impedimental circumstance on the performance of the contract.


3. The party who fails to perform the contract shall be obliged to inform the other party about the arising of an impedimental circumstance referred to in paragraph 1 of this Article and its effect on the performance of the contract.  In the event where the notice is not received by the other party within a reasonable time after the non-performing party became or should have become aware of the impedimental circumstance, the latter party must compensate for damages resulting from the non-receipt of the notice.


4. The provisions of this Article shall not deprive the other party of the right to dissolve the


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non-receipt of the notice.


4. The provisions of this Article shall not deprive the other party of the right to dissolve the contract, or to suspend its performance, or to require payment of interest.


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Article 6.213. Demand of performance


1. In the event where a party fails to perform its monetary obligation, the other party shall have the right to demand performance in kind.


2. If a party fails to perform its non-monetary obligation, the other party may demand performance in kind, except in cases where:


1) performance of the contractual obligation in kind is impossible legally or factually;


2) performance of the contractual obligation in kind would be greatly burdensome or expensive for the debtor;


3) the party entitled to performance may reasonably obtain performance from another source;


4) the party entitled to performance does not demand that performance within a reasonable time after it became aware or should have become aware of the non-performance of the contract;


5) the non-performed obligation is of exclusively personal character.

 


Article 6.214. Repair or replacement of a defective performance

The right to obtain performance shall include the right to demand repair or replacement of a defective performance, or elimination of defects in performance by other means taking into consideration the provisions of Article 6.208 of this Code.


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Article 6.215. Fine for non-performance of the requirement to perform an obligation in kind


1. Where the debtor fails to comply with a court judgment ordering the performance in kind of a contractual obligation, the court shall impose a fine upon the debtor.


2. The amount of a fine shall be established by the court with regard to concrete circumstances of the case. The fine may be imposed in the form of a lump sum payment or in the form of payment of interest on the delayed payments for every day exceeded.


3. The fine shall be exacted in favour of the creditor.  Exaction of the fine shall not release the debtor from the obligation to compensate for damages.

 


Article 6.216. Change of remedies

Where the debtor fails to perform a non-monetary obligation in kind within a fixed time limit, or where the creditor does not have the right to demand the performance in kind, the creditor may require other remedies to be invoked.

 


CHAPTER XVIII

TERMINATION OF CONTRACTS


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Article 6.217. Dissolution of a contract


1. A party may dissolve the contract where the failure of the other party to perform it or the defective performance thereof is considered to be an essential violation of the contract.


2. In determining whether a violation of a contract is essential, the following conditions must be taken into account:


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1) whether the aggrieved party is substantially deprived of what it was entitled to expect under the contract, except in cases when the other party did not foresee or could not have reasonably foreseen such result;


2) whether, taking into consideration the essence of the contract, strict compliance with the conditions of the obligation is of essential importance;


3) whether the non-performance is intentional or grossly negligent;


4) whether the non-performance gives the aggrieved party reason not to expect future performance of the contract;


5) whether the non-performing party, who was preparing for performance or was effectuating the performance of the contract, would suffer significant damages if the contract were dissolved;


3. In the case of delay in performance, the aggrieved party may dissolve the contract if the other party fails to perform the contract within the additional period fixed.


4. On any other grounds not established in this Article, the contract may be dissolved only within the judicial proceedings resulting from an action of the party concerned.


5. A contract may be dissolved unilaterally in the cases provided for therein.


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Article 6.218. Notice of dissolution of a contract


1. On the grounds indicated in Article 6.217 of this Code, the aggrieved party may dissolve the contract unilaterally without going to court. The other party must be notified of the dissolution of the contract in advance within the time limit established by the contract; if the contract does not indicate such time limit, the notice of dissolution must be given 30 days in advance.


2. Where the party who has essentially violated the contract submits an offer to perform the contract before the dissolution thereof, but this offer is belated or otherwise does not conform to the requirements of the contract, the aggrieved party shall lose the right to dissolve the contract unilaterally unless it gives notice to the other party within a reasonable time after it became aware or ought to have become aware of the offer to perform the contract, or such offer fails to conform to the proper performance of the contract.

 


Article 6.219. Anticipatory non-performance

A party may dissolve a contract if, before the expiry of the time limit for performance of the contract, it is reasonably foreseeable from the particular circumstances that the other party will commit a material breach.


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Article 6.220. Assurance of due performance


1. A party who, having regard to the circumstances, believes that there may be an essential non-performance by the other party shall have the right to require the latter party to present an assurance of due performance. The party may suspend performance of its contractual obligations until the other party to the contract has provided the assurance that it will faithfully exercise a proper performance of the contract.


2. Where the assurance indicated in paragraph 1 of this Article is not received within a reasonable time, the party demanding thereof may dissolve the contract.

 


Article 6.221. Legal effects of the dissolution of a contract


1. Dissolution of a contract shall release both parties from the performance of the contract.


2. Dissolution of a contract shall not preclude the right of claim for damages for non-performance of the contract, as well as the right of claim for penalty.


3. Dissolution of a contract shall not affect the validity of its conditions establishing the dispute settlement procedure and of any other conditions, provided that these conditions, by their essence, remain in force even after the dissolution of the contract.


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Article 6.222. Restitution


1. Upon dissolution of the contract, each of the parties may claim the return of whatever it has supplied to the other party under the contract if this party concurrently returns to the other party whatever it has received from the latter. If restitution in kind is not possible or appropriate to the parties due to modification of the subject matter of the contract, a compensation of value of what has been received shall be made in money, provided that such compensation does not contradict the criteria of reasonableness, good faith and justice.


2. If the performance of a contract is successive and divisible, the party may claim restitution only of what has been received after the dissolution of the contract.


3. Restitution shall not affect the rights and duties of third persons in good faith, except in the cases established in this Code.


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Article 6.223. Modification of a contract


1. A contract may be modified by agreement between the parties.


2. At the request of one of the parties, the contract may be modified by a court judgment, provided that:


1) the violation of the contract committed by the other party amounts to an essential one;


2) in other cases specified by the contract or laws.


3. An action for modification of a contract may be brought only after the other party has refused to modify the contract or has not responded to a proposal to modify the contract within 30 days unless a different procedure of modification is established by laws or the contract.


4. A refusal of one party to perform the contract in part or in whole may be effected only in cases provided for by laws or the contract.

 


Article 6.224. Nullity of a contract

A contract may be declared null and void upon the grounds of invalidity of transactions established in Book One of this Code, likewise on any other grounds established by laws.


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Article 6.225. Absolute and relative nullity of a contract


1. A contract shall be absolutely voidable (null contract) where a violation of the main principles of the contract law made in forming a contract has conditioned violation not only of the interests of a party of the contract, but also that of the public interests.


2. A contract that is absolutely null may not be ratified by the parties later.


3. A contract shall be relatively voidable (disputable contract) where in contracting it one party acted in good faith, and the declaration of its nullity is necessary only for the protection of the private interest of the party in good faith.


4. A contract that is relatively null may be ratified by its parties (a party), provided that such ratification results from their express will.

 


Article 6.226. Partial nullity of a contract


1. The nullity of one of the condition of a contract shall not import the nullity of the entire contract unless the contracting parties would not have entered into the contract without the condition affected by nullity.


2. In the case of a multilateral contract when there are two or more persons bound to perform an obligation, the nullity affecting one of the persons shall not import the nullity of the entire contract unless the participation of that person is necessary for the formation of the contract concerned.


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Article 6.227. Right to bring an action for nullity


1. An action on the absolute nullity of a contract may be brought by any person whose rights or legitimate interests are violated by such contract.


2. The fact of the absolute nullity of a contract and legal effects of this fact may be stated by the court ex officio (on its own motion).


3. An action on the relative nullity of a contract may be brought by a contracting party in good faith who has sustained damage from entering into that contract, or by a third person in whose interest it is concluded, or by a person whose rights or legitimate interests are violated by that contract.


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Article 6.228. Gross disparity between parties


1. A party may withdraw from the contract or a particular condition thereof if, at the time of the conclusion of the contract, the contract or its particular condition unreasonably conferred an excessive advantage on the other party. In such cases, among other circumstances, regard must also be paid to the fact that one party has taken unfair advantage of the other’s dependent position, or of the other party’s economic difficulties, urgent needs, or of the latter’s economic weakness, lack of information or experience, its inadvertence or inexperience in negotiations; regard must also be taken of the nature and purpose of the contract.


2. Upon the request of the party entitled to withdraw from a contract or a particular condition thereof on the grounds established in paragraph 1 of this Article, the court shall have the right to revise the contract or its particular condition and adapt them respectively in order to make the contract or its particular condition meet the requirements of fairness and reasonable standards of fair dealing practices.


3. The court may modify the contract or particular conditions thereof also at the request of the party who has received a notice of withdrawal from the contract if this party upon receiving the notice has immediately informed the other party about its request to the court, and the latter still has not withdrawn from the contract.

 


CHAPTER XVIII1

CONSUMER CONTRACTS


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Article 6.2281. Concept of a consumer contract and other terms


1. In a consumer contract, the trader shall undertake to transfer the goods to the consumer by the right of ownership or to provide services to the consumer, and the consumer shall undertake to accept the goods or services and to pay the price. In the cases specified in this Code, other contracts concluded between the trader and the consumer shall also be considered to be consumer contracts.


2. ‘Consumer’ means any natural person who seeks to conclude or concludes contracts for purposes which are outside his trade, business, craft or profession (for consumption purposes).


3. ‘Trader’ means any natural or legal person or another organisation, or a branch thereof, that seeks to conclude or concludes, including through any other person acting in his name or on his behalf, contracts for purposes relating to his trade, business, craft, or profession.      A legal person may be considered a trader regardless of the legal form of its participants.


4. ‘Goods’ means:


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1) any tangible movable items;


2) electricity, water and natural gas where they are put up for sale in a limited volume or a set quantity;


3) any tangible movable items that incorporate, or are inter-connected with, digital content or a digital service in such a way that the absence of that digital content or digital service would prevent the goods from performing their functions (hereinafter: ‘goods with digital elements’).  


5. ‘Digital content’ means data which are produced and supplied in digital form.


6. ‘Digital service’ means:


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1) a service that allows the consumer to create, process, store or access data in digital form;


2) a service that allows the sharing of or any other interaction with data in digital form uploaded or created by the consumer or other users of that service.


7. ‘Functionality’ means the ability of the digital content or digital service to perform its functions having regard to its purpose.


8. ‘Integration’ means the linking and incorporation of digital content or a digital service with the components of the consumer’s digital environment in order for the digital content or digital service to be used in accordance with the quality requirements for digital content and digital services set out in this Chapter.


9. ‘Interoperability’ means the ability of the digital content or digital service to function with hardware or software different from those with which digital content or digital services of the same type are normally used.


10. ‘Digital environment’ means hardware, software and any network connection used by the consumer to access or make use of digital content or a digital service.     


11. ‘Price of digital content or a digital service’ means money or a digital representation of value that is due in exchange for the supply of digital content or a digital service.


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12. ‘Compatibility’ means the ability of the digital content or digital service to function with hardware or software with which digital content or digital services of the same type are normally used, without the need to convert the digital content or digital service.


13. ‘E-marketplace service’ means a service based on software, including a website, a part of a website or an application, which is provided by or on behalf of the trader and enables consumers to conclude distance contracts with other traders or consumers.


14. ‘E-marketplace service provider’ means a trader who makes an e-marketplace service available to consumers.


15. ‘Product ranking’ means the relative importance given to products by a trader by any technological means.


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Article 6.2282. Prohibition of waiving or restricting consumer rights. Protection of consumer rights


1. Consumers may not waive the rights conferred upon them by this Code. The conditions of consumer contracts which directly or indirectly nullify or restrict the rights of consumers set out in this Code shall be null and void.


2. Where a trader violates a consumer’s rights, the consumer shall have the right to seek redress from consumer protection authorities or courts in accordance with the procedure laid down by law.


3. Consumer protection authorities and consumer redress procedures shall be laid down by law.


4. A trader shall be prohibited from engaging in unfair commercial practices with regard to consumers. The types and cases of unfair commercial practices shall be determined by law.


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Article 6.2283. Application of the rules governing consumer contracts


1. The provisions of this Chapter shall apply to all consumer contracts other than those provided for in this Article. The provisions of this Chapter shall also apply where a trader supplies or undertakes to supply non-physical digital content or a digital service to a consumer and the consumer provides or undertakes to provide personal data to the trader, except where the trader only processes those personal data for the purposes of the provision of the non-physical digital content or digital service or to comply with legal requirements, and does not process those personal data for any other purposes.


2. The provisions of this Chapter, with the exception of Article 6.2284, shall not apply to the following contracts:


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1) contracts in the notarial form;


2) contracts for social services;


3) contracts for health care services;


4) contracts for financial services;


5) construction contracts for the construction of a new construction works or for the reconstruction of construction works;


6) residential rental contracts;


7) timeshare, long-term holiday product, resale or exchange contracts (Articles 6.369 and 6.370 of this Code);


8) package travel contracts (Articles 6.747 to 6.755 of this Code), with the exception of the right of withdrawal specified in paragraph 1 of Article 6.22810 of this Code from an off-premises package travel contract, with the exceptions referred to in paragraph 2 of Article 6.22810 of this Code and the provisions laid down in paragraphs 3, 5 and 6 of Article 6.2285, paragraph 1 of Article 6.2286 and paragraphs 3 and 5 of Article 6.2288 of this Code, which apply to package travel contracts;


9) contracts for frequent and regular supply to the consumer of foodstuffs, beverages or other goods intended for current household consumption;


10) contracts concluded by means of vending machines or automatic sales premises;


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10) contracts concluded by means of vending machines or automatic sales premises;


11) contracts concluded with communication service providers using call-box facilities or other public pay telephones for their use, and contracts concluded for a single use of telephone, internet or fax by the consumer;


12) contracts for gambling, lotteries or other games based on risk or chance;


13) contracts for the carriage of passengers, with the exception of paragraphs 3 and 6 of Article 6.2285 of this Code and paragraph 3 of Article 6.2288 of this Code;


14) transactions for the realisation of assets during enforcement proceedings.


3. The rules of this Chapter relating to the protection of consumer rights shall also apply in the following cases:


1) where a natural person enters into a contract for purposes of dual use, i.e., for consumption and business purposes, but, taking into account all the circumstances surrounding the contract, business purposes are not predominant;


2) where a natural person actually uses the goods or actually receives a service for consumption purposes and pays for it, even though the contract with the trader was concluded by a public legal person representing the natural person;


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Article 6.2284. Unfair terms in consumer contracts


1. A consumer shall have the right to claim within the judicial procedure for invalidity of unfair terms in a consumer contract. For the purposes of this Article, any contract concluded between a trader and a consumer shall be regarded as a consumer contract.


2. Terms of consumer contracts which have not been individually negotiated between the parties and which, by reason of a breach of the requirement of good faith, substantially undermine the balance of rights and obligations of the parties to the detriment of the consumer shall be regarded as unfair. It shall be presumed that unfair terms are the terms of the contract which:


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1) exclude or limit the trader’s civil liability for damage caused by the loss of life, injury to the consumer’s health or damage to the consumer’s property;


2) improperly eliminate or restrict the consumer’s rights vis-à-vis the trader or another party in the event of the trader’s full or partial non-performance or defective performance of any of the obligations under the contract;


3) provide that the consumer is bound by the terms of the contract and that the trader’s obligation to perform the contract is subject to other terms the fulfilment of which depends solely on the trader’s will;


4) give the trader the right not to refund the sums received from the consumer when the consumer decides not to conclude or perform the contract and do not provide for the consumer’s right to receive the same sums from the trader when the trader unilaterally terminates the contract;


5) impose a disproportionately high civil liability on the consumer for non-performance or defective performance of the contract;


6) give the trader the right to unilaterally terminate the contract or to withdraw from it at any time at his discretion, without giving this right to the consumer, or give the trader the right not to reimburse the sums received from the consumer before the performance of the contract when the trader unilaterally terminates the contract or withdraws from it;


7) give the trader the right to unilaterally


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the performance of the contract when the trader unilaterally terminates the contract or withdraws from it;


7) give the trader the right to unilaterally terminate an open-ended contract without sufficient grounds, without giving the consumer adequate prior notice of the intended termination of the contract;


8) give the trader the right to unilaterally and automatically renew a fixed-term contract, or provide for an unreasonably short period of time within which the consumer must express his views on the renewal of the contract, or that the consumer must give his consent or refusal to renew the contract at an unreasonably early stage;


9) oblige the consumer to perform contractual terms to which he did not have real access to before the conclusion of the contract;


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10) give the trader the right to unilaterally modify the terms of the contract without contractual or sufficient grounds;


11) give the trader the right to alter unilaterally and without sufficient grounds any characteristics of the goods or services;


12) give the trader the right to fix unilaterally the prices at the time of transfer of goods and provision of services, or the right to unilaterally increase the price without providing the consumer with the right to withdraw from the contract if the final price is higher than the price stipulated in the contract. This provision shall not apply to contracts involving securities or other financial instruments, or to contracts for alienation of things or provision of services where the price is linked to fluctuations in exchange rates or indexes and is beyond the control of the trader, likewise to contracts for the purchase or sale of foreign currency, travellers cheques or international money orders denominated in foreign currency;


13) give the trader the right to decide unilaterally whether the goods or services supplied comply with the requirements of the contract;


14) give the trader an exclusive right to interpret the contract;


15) limit the trader’s obligation to fulfil the commitments undertaken by his agents, or make this obligation subject to certain conditions;


16) obligate the consumer to fulfil all obligations to the trader, even if the trader fails to fulfil his own obligations or does not fulfil them fully;


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17) give the trader the right to transfer his rights and obligations arising from the contract without the consumer’s consent, where this may reduce the guarantees offered to the consumer;


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18) exclude or hinder the consumer’s right to bring an action or pursue other remedies (establishing exclusive territorial jurisdiction to resolve the dispute before the court of the place where the trader has his registered office, requiring that disputes be referred exclusively to arbitration, limiting the use of evidence, shifting the burden of proof to the consumer, etc.).


3. Any other terms of a consumer contract may be declared by the court to be unfair if they conform to the criteria set out in paragraph 2 of this Article. The burden of proving that a contractual term referred to in paragraph 2 of this Article is not unfair shall lie with the trader.


4. Pursuant to paragraph 2 of this Article, terms of a consumer contract the preparation of which could not have been influenced by the consumer shall be regarded as not having been individually negotiated, in particular where those terms are laid down in a standard contract drawn up in advance by the trader. In the event where certain terms in a standard contract prepared in advance were individually negotiated, the provisions established in this Article shall apply to other terms of that contract. The burden of proving that a particular term in a consumer contract has been individually negotiated shall lie with the trader.


5. The assessment whether a term in a consumer contract is unfair must be made taking into account the nature of the goods or services referred to in the contract as well as other circumstances which existed at the time of conclusion of the contract and exerted influence thereupon, likewise


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goods or services referred to in the contract as well as other circumstances which existed at the time of conclusion of the contract and exerted influence thereupon, likewise any other terms of that contract or of other contract it depends upon. 


6. Any written term in a consumer contract must be expressed clearly and intelligibly. The terms which do not comply with this requirement shall be regarded as unfair. Where there is doubt as to the content of the terms of a consumer contract, the terms of the contract must be interpreted in favour of consumers. This rule shall not apply in cases of collective consumer redress, when prohibition of further use of the drawn-up standard terms of the contract is sought.


7. Terms which define the subject matter of a consumer contract, likewise those relating to the conformity between the goods sold or services rendered and the price thereof, ought not to be subjected to assessment from the point of view of unfairness, provided that they are expressed in a clear and understandable manner. In addition, terms in consumer contracts that are identical to provisions of laws or other legal acts ought not to be subjected to assessment from the point of view of unfairness.


8. Where the court declares a contractual term(s) to be unfair, the term(s) shall have no effect from the moment of conclusion of the contract while the remaining terms of the contract shall continue to be binding on the parties, providing that further performance of the contract is still possible after the elimination of the unfair


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remaining terms of the contract shall continue to be binding on the parties, providing that further performance of the contract is still possible after the elimination of the unfair terms.


9. The court hearing the case shall have the obligation to assess the conformity of the terms of consumer contracts with the criteria of unfairness ex officio.


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10. Consumer claims for unfair terms in consumer contracts shall not be subject to limitation period. The general limitation period shall apply to consumer claims for the recovery of sums unduly paid under unfair terms in consumer contracts.


11. Consumer protection authorities shall exercise control of unfair terms in consumer contracts in accordance with the procedure established by law.


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1. The consumer must pay the trader for the goods and services at the price fixed in or under the consumer contract unless otherwise provided for in the contract or by law.


2. Where a consumer contract provides for advance payment of the price, but the consumer fails to pay the price within the time limit laid down in the contract, the consumer shall be deemed to have withdrawn from the contract unless otherwise provided for in the contract.


3. Prior to concluding a consumer contract, a trader must obtain the express consent of the consumer regarding any additional charges to be added to the price (compensation for the trader’s performance of the principal contractual obligation).   If the trader did not obtain the consumer’s express consent, but inferred it from the preliminary statements with which the consumer would have had to disagree in order to avoid additional charges, the consumer shall be entitled to recover such charges.


4. The costs of concluding a consumer contract shall be borne by the consumer only if, at the time of conclusion of the contract, the trader has discussed them separately with the consumer and obtained his express consent to the payment of those costs.


5. If a trader gives a consumer the possibility of contacting him by telephone with regard to the contract concluded between them, the trader may not use a telephone number which entails a charge that is higher than the basic call rate, i.e. higher than the charge payable by the consumer for calls to public fixed or mobile


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a charge that is higher than the basic call rate, i.e. higher than the charge payable by the consumer for calls to public fixed or mobile telephone numbers. The trader who fails to comply with this obligation shall be liable for the costs incurred by the consumer.


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6. A trader shall be prohibited from requiring a consumer to pay a charge for the use of certain payment instruments or for payment in cash which exceeds the expenses incurred by the trader for the use of those payment instruments or for payment in cash. Prohibition to request a consumer to pay a charge for the use of certain payment instruments may be provided for by law.


7. A trader selling weighed goods shall be prohibited from including in the weight and price of the goods weighed the weight and value of the packaging material used for the weighing and packaging of those goods.


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Article 6.2286. General requirements for consumers’ right to information


1. Before concluding a consumer contract other than a distance or off-premises contract, the trader must provide the consumer with the necessary, correct, complete and non-misleading information in a clear and comprehensible manner. The information must be provided to the consumer in the official language. The trader must, when marking the goods or otherwise, provide the consumer with the following information, unless it is obvious from the context:


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1) the main characteristics of the goods or service (taking into account the means of information and the goods or service);


2) details of the trader (name, registered office, telephone number);


3) the total price of goods or services inclusive of taxes or where, due to the nature of the goods or services, the price cannot reasonably be calculated in advance, the method by which that price is calculated and, where appropriate, any additional transport, delivery and postal costs, or where such additional costs cannot reasonably be calculated in advance, the information that they may have to be paid;


4) where appropriate, the arrangements for payment, delivery and performance of the contract, the time limit for the delivery of goods or provision of services, and the procedure for dealing with consumer’s complaints by the trader;


5) the terms of the after-sales service and quality guarantee (commercial guarantee), if applicable, together with a reminder of the statutory guarantee (legal guarantee) of the goods, digital content or digital service;


6) where appropriate, the duration of the contract and, in the case of contracts of indefinite duration or automatic renewal, the conditions for terminating the contract;


7) where relevant, the functionality of goods with digital elements, digital content and digital services, including the technical protection measures applied;


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8) where appropriate, the compatibility and interoperability of goods with digital elements, digital content and digital services to the extent that the trader knows or needs to know.


2. Laws and retail rules may lay down requirements for the provision of additional information to be provided to consumers prior to the conclusion of consumer contracts for certain types of goods and services.


3. This Article shall not apply to small domestic contracts which are performed immediately after their conclusion.


4. The burden of proving that the information has been provided to the consumer in accordance with this Article shall lie with the trader.


5. The trader who has failed to comply or improperly complied with the obligation to provide information to the consumer must compensate for any loss suffered by that consumer.


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Article 6.2287. Consumer’s right to information in the case of distance and off-premises contracts


1. Before concluding a distance or off-premises contract, the trader must provide the consumer with the following information in a clear and comprehensible manner:


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1) the main characteristics of the goods or services (taking into account the means of information and the goods or service);


2) details of the trader (name and surname, legal form of the legal person);


3) the address of the trader’s registered office, telephone number and e-mail address; Where the trader provides other means of online communication enabling the consumer to store on a durable medium any written correspondence with the trader, including the date and time of the correspondence, these other means of communication must be indicated. All these means of communication provided by the trader must allow the consumer to contact the trader quickly and to communicate effectively with him. In addition, details must be provided, where appropriate, of the trader on whose behalf the action is being taken (name, registered office address). The address of the place of economic activity of the trader and, where applicable, of the trader on whose behalf the action is being taken, at which the consumer may lodge complaints shall be indicated if the address of the place of economic activity is different from the address of the registered office;


4) the total price of goods or services inclusive of taxes, or where due to the nature of goods or services the price cannot be reasonably calculated in advance, the method by which that price is calculated and, where appropriate, any additional transport, delivery, postal and other costs, or where such additional costs cannot be reasonably calculated in advance, the fact that they may have to be


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additional transport, delivery, postal and other costs, or where such additional costs cannot be reasonably calculated in advance, the fact that they may have to be paid. In the case of an open-ended contract or a contract providing for the payment of periodic instalments, the total price shall consist of the total cost of a given billing period. Where a fixed fee is to be paid under the contract, the total price shall also mean the total cost of the month. If all costs cannot be reasonably calculated in advance, the method used to calculate the price must be specified;


5) the cost of using the means of communication at the time of conclusion of the contract, if this is not calculated on the basis of basic (normal) rates;


6) arrangements for payment, delivery and performance of the contract, time limit for delivery of goods or provision of services and, where appropriate, the procedure for the handling of consumer complaints by the trader;


7) the right of withdrawal: the conditions, time limit and procedure for implementing this right in accordance with Article 6.22810 of this Code, as well as the model form of withdrawal or information that the consumer does not have the right to withdraw from the contract in accordance with Article 6.22810 of this Code or, where appropriate, the circumstances in which the consumer loses the right to withdraw from the contract;


8) if necessary, the information that the consumer must bear the costs of returning the goods after


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loses the right to withdraw from the contract;


8) if necessary, the information that the consumer must bear the costs of returning the goods after withdrawing from the contract and, in the case of distance contracts, the cost of returning the goods if, by their nature, the goods cannot normally be returned by post;


9) information that the consumer who withdraws from the contract in accordance with paragraphs 9 or 10 of Article 6.22810 of this Code must pay to the trader reasonable expenses in accordance with paragraph 9 of Article 6.22811 of this Code;


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10) a reminder of the statutory guarantee (legal guarantee) of the goods, digital content or digital service;


11) where appropriate, consumer service, post-contractual service and quality guarantee (commercial guarantee) and their terms and conditions;


12) where appropriate, the code of conduct applicable to the trader and the information on how it can be accessed;


13) where appropriate, the duration of the contract and, in the case of contracts of indefinite duration or automatic renewal, the conditions for terminating the contract;


14) if applicable, the minimum duration of the contract;


15) where appropriate, deposits or other financial guarantees to be provided or paid by the consumer at the request of the trader and the conditions under which they are to be applied;


16) where appropriate, the possibility of submitting a complaint or seeking an out-of-court redress and conditions for exercising it;


17) where relevant, the functionality of goods with digital elements, digital content and digital services, including the technical protection measures applied;


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18) where appropriate, the compatibility and interoperability of goods with digital elements, digital content and digital services to the extent that the trader knows or needs to know;


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19) if applicable, the fact that the price has been personalised using automated decision-making.


2. The information referred to in points 7, 8 and 9 of paragraph 1 of this Article may be provided to the consumer by means of a completed model withdrawal information form. This form shall be approved by the Government of the Republic of Lithuania or an institution authorised by it. Where the trader has provided the consumer with a duly completed model withdrawal information form, the trader shall be deemed to have duly complied with the information provision requirements set out in points 7, 8 and 9 of paragraph 1 of this Article.


3. The information referred to in paragraph 1 of this Article shall form an integral part of a distance or off-premises contract. This information may be amended only by express agreement between the parties to the contract.


4. Where the trader has not duly complied with the requirement to provide the consumer with the information on additional charges or other costs referred to in point 4 of paragraph 1 of this Article or with the information on the costs of returning the goods referred to in point 8 of paragraph 1 of this Article, the consumer shall not be obliged to pay those charges or costs.


5. The burden of proving that the information has been provided to the consumer in accordance with this Article shall lie with the trader.


6. Before the conclusion of a consumer contract on the e-marketplace, the e-marketplace service provider must, taking into


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Before the conclusion of a consumer contract on the e-marketplace, the e-marketplace service provider must, taking into account the means of distance communication used, provide the consumer with the following information in a clear and comprehensible manner:


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1) general information on the main parameters used to determine the ranking of products offered to consumers in response to a search query and the relative importance of those parameters compared to other parameters. This information must be provided in a separate part of the electronic interface, directly and easily accessible from the page where the proposals are submitted;


2) whether the goods, services or digital content are offered by a trader. This information is based on the declaration made by the person submitting the offer on the e-marketplace;


3) the fact that consumer protection requirements do not apply to a contract where the person offering the goods, services or digital content is not a trader;


4) where relevant, information on the allocation of contractual obligations between the person offering the goods, services or digital content and the provider of the e-marketplace service. This information may not replace the obligations of the e-marketplace service provider or trader arising from the performance of the contract, as laid down in other laws or European Union legislation.


7. Other laws may lay down additional information requirements for individual types of distance contracts or off-premises contracts.


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1. A distance contract shall be a contract between a trader and a consumer concluded in the framework of an organised distance sales or provision of services, without the trader and the consumer being physically present at the same place and using only means of communication prior to the conclusion of the contract and at the time of conclusion of the contract.


2. When concluding a distance contract, the trader must provide the consumer with the information referred to in paragraph 1 of Article 6.2287 of this Code in a clear and understandable manner or make that information properly available to the consumer taking into account the means of communication used. The information provided on a durable medium must be legible.


3. Where a distance contract concluded by electronic means obliges the consumer to pay, the trader must, in a clear and visible manner and immediately before the consumer’s order is placed, familiarise the consumer with the information specified in points 1, 4, 13 and 14 of paragraph 1 of Article 6.2287 of this Code. The trader must ensure that the consumer, when placing his order, explicitly confirms that the consumer is under an obligation to pay after placing the order. If the placing of an order requires the pressing of a button or the use of a similar function, the button or a similar function must be marked in such a way as to be easily legible (understandable), i.e. by including only the words ‘order with the obligation to pay’ or a


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be easily legible (understandable), i.e. by including only the words ‘order with the obligation to pay’ or a similar unambiguous wording indicating that the placing of the order creates an obligation for the consumer to pay the trader. If the trader violates this requirement, the distance contract shall not create a payment obligation for the consumer.


4. Where a distance contract is concluded by means of communication which do not contain sufficient space or time to provide information, the trader must, before the conclusion of the contract, provide by such means at least the information specified in points 1, 2, 4, 7 and 13 of Article 6.2287 of this Code, except for the model withdrawal form. The other information referred to in paragraph 1 of Article 6.2287 of this Code, including the model withdrawal form, must be provided by the trader to the consumer as set out in part 2 of this Article.


5. The trader who makes a telephone call to a consumer with a view to concluding a distance contract must, at the beginning of the conversation with the consumer, disclose his identity (name) and, where appropriate, the identity (name) of the person on whose behalf he makes the call and specify the commercial purpose of the conversation. If in this case the consumer agrees to conclude a distance contract, the trader must confirm the offer to the consumer on a durable medium. A distance contract shall be deemed concluded when the consumer signs the offer or sends


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the trader must confirm the offer to the consumer on a durable medium. A distance contract shall be deemed concluded when the consumer signs the offer or sends his or her written consent to the trader.


6. Within a reasonable period of time after the conclusion of the distance contract and at the latest at the time of delivery of the goods or before the provision of the services, the trader must provide the consumer with a confirmation of the contract on a durable medium. The confirmation of the contract shall contain all the information referred to in paragraph 1 of Article 6.2287 of this Code, with the exception of information provided by the trader to the consumer on a durable medium prior to the conclusion of the distance contract.


7. Other requirements for the conclusion of consumer contracts by electronic means may be laid down by law.


8. Other laws may not impose additional pre-contractual information requirements for distance contracts.


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Article 6.2289. Off-premises contracts


1. An off-premises contract shall be a contract between a trader and a consumer which meets one of the following conditions:


1) it is concluded with the simultaneous physical presence of the trader and the consumer in a single place other than the trader’s commercial premises;


2) it is offered by the consumer and is subject to the conditions referred to in point 1 of this paragraph;


3) it is concluded at the trader’s commercial premises or by means of communication immediately after the trader has addressed the consumer personally and directly while they are physically present in a single place other than the trader’s commercial premises;


4) it is concluded during a tour organised by a trader to promote and sell goods or services to the consumer.


2. ‘Commercial premises’ shall mean both immovable premises on which the trader carries out regular retail trade and movable premises on which the trader normally carries out retail trade.


3. Off-premises contracts where the amount to be paid by the consumer is less than twenty-five euros shall be exempt from the provisions of this Article and Articles 6.2287 and 6.22810 of this Code.


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4. When concluding an off-premises contract, the trader must provide the consumer with the information referred to in paragraph 1 of Article 6.2287of this Code in writing on paper or, with the consumer’s consent, on another durable medium. The information must be legible and presented in clear and comprehensible language.


5. The trader must provide the consumer with a signed copy of the off-premises contract or a written confirmation of that contract on paper or, with the consumer’s consent, on another durable medium.


6. Other laws may not impose any additional pre-contractual information requirements for off-premises contracts.


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Article 6.22810. Consumer’s right to withdraw from a distance and off-premises contract


1. The consumer shall have the right, without giving any reason or incurring any costs other than those provided for in Article 6.22811 of this Code, to withdraw from a distance or off-premises contract within 14 days, subject to the exceptions provided for in paragraph 2 of this Article.


2. The right of the consumer to withdraw from a distance and off-premises contract shall not apply to the following contracts:


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1) service contracts where the services have been fully provided to the consumer and where the consumer is obliged to pay the price, provided that the consumer’s express consent and acknowledgement has been obtained prior to the commencement of the provision of the services that he will lose the right of withdrawal once the trader has fully performed the contract;


2) contracts where the price of the goods sold or services rendered depends on fluctuations in the financial market during the withdrawal period set out in paragraph 1 of this Article;


3) contracts for goods produced in accordance with the consumer’s specific instructions, i.e. goods which are not manufactured in advance and which are produced according to the consumer’s personal choice or instruction, whether or not the goods have been put into production, or for goods which are expressly tailored to the consumer’s personal needs;


4) contracts for perishable goods or goods with a short term of validity;


5) contracts for packaged goods which have been unsealed after delivery and which are unfit for return for health or hygiene reasons;


6) contracts for goods which are, after delivery, according to their nature, inseparably mixed with other items;


7) contracts for alcoholic beverages, the price of which is fixed at the time of conclusion of the sales contract and which are delivered 30 days after the conclusion of the contract, and the fair value of the beverages is dependent on market fluctuations;


8) contracts


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which are delivered 30 days after the conclusion of the contract, and the fair value of the beverages is dependent on market fluctuations;


8) contracts concluded after the consumer has made a specific request to the trader for his arrival in order to carry out urgent repairs or maintenance work. If, in this case, the trader provides more additional services than specifically indicated by the consumer or sells more additional goods than necessary to carry out the repairs or maintenance work, those additional services or goods shall be subject to the right of withdrawal;


9) contracts for packed video or audio recordings or packaged software which have been unpacked after delivery;


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10) contracts for the delivery of newspapers, periodicals or magazines, with the exception of contracts for subscriptions to these publications;


11) contracts concluded at a public auction;


12) contracts for the provision of accommodation, carriage of goods, car rental, catering or leisure services, provided that the contract provides for a specific date or period for the provision of services;


13) contracts for the supply of digital content which have been put into effect and which provide for an obligation on the part of the consumer to pay the price, provided that all the following conditions are met:


a) the consumer has expressly consented in advance to the performance of the contract even though the time limit for exercising the right of withdrawal has not expired;


b) the consumer has acknowledged that he or she is no longer entitled to withdraw from the contract;


c) the trader has provided a confirmation pursuant to paragraph 6 of Article 6.2288 or paragraph 5 of Article 6.2289 of this Code.


3. The withdrawal period for distance and off-premises contracts referred to in paragraph 1 of this Article shall expire after 14 days:


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1) in the case of a contract for services or a contract for the sale of energy, from the date of conclusion of the contract;


2) in the case of a sales contract, from the date on which the consumer or a person designated by the consumer, other than the carrier, receives the goods ordered or:


a) where the consumer has ordered more than one item in one order and the goods are delivered separately, from the date on which the consumer or a person designated by the consumer, other than the carrier, receives the last item;


b) where the goods are delivered in different lots or parts, from the date on which the consumer or the person designated by the consumer, other than the carrier, receives the last lot or part;


c) in the case of a contract for regular delivery of goods within a specified period, from the date on which the consumer or the person designated by the consumer, other than the carrier, receives the first item.


4. If the trader has not provided the consumer with the information on the right of withdrawal pursuant to point 7 of paragraph 1 of Article 6.2287 of this Code, the consumer shall have the right to withdraw from the contract within 12 months of the expiry of the time limit set in paragraph 3 of this Article.


5. If the trader provides the consumer with the information referred to in point 7 of paragraph 1 of Article 6.2287 of this Code within


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If the trader provides the consumer with the information referred to in point 7 of paragraph 1 of Article 6.2287 of this Code within 12 months of the expiry of the time limit set in paragraph 3 of this Article, the period of withdrawal shall expire 14 days after the day on which the consumer receives that information.


6. The consumer shall inform the trader of the withdrawal from a distance or off-premises contract:


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1) by submitting a duly completed model withdrawal form. This form shall be approved by the Government of the Republic of Lithuania or an institution authorised by it; or


2) by submitting a clear statement setting out his decision to withdraw from the contract.


7. The trader may enable the consumer to submit electronically on the internet website the documents referred to in paragraph 6 of this Article for the withdrawal from a distance contract or an off-premises contract. In this case, the trader must immediately confirm to the consumer, on a durable medium, that he has received his withdrawal from the contract.


8. The burden of proving compliance with the requirements of this Article with regard to withdrawal shall rest with the consumer.


9. Where a consumer who has concluded a distance contract wishes to have services or energy supplied before the expiry of the withdrawal period set out in this Article and the consumer is contractually obliged to pay the price, the trader may only provide the services or energy upon the consumer’s explicit request on a durable medium and the consumer’s acknowledgement that the consumer loses the right of withdrawal upon the trader’s full performance of the contract.


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10. Where a consumer who has concluded an off-premises contract wishes to have services or energy supplied before the expiry of the withdrawal period for the off-premises contract set out in this Article and the consumer is contractually obliged to pay the price, the trader may only provide the services or energy upon the consumer’s explicit request on a durable medium and the consumer’s acknowledgement that the consumer loses the right of withdrawal upon the trader’s full performance of the contract.


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1. The exercise of the right of withdrawal by the consumer shall terminate the obligations of the parties to perform a distance or off-premises contract or to conclude a distance or off-premises contract if the consumer has submitted an offer to conclude it.


2. The trader must, without delay and at the latest within 14 days from the date on which he receives the consumer’s notice of withdrawal from the contract, reimburse to the consumer all sums paid by the latter, including the costs of delivery of the goods paid by the consumer. When reimbursing all sums paid by the consumer, the trader must use the same means of payment as the consumer used to pay the trader, unless the consumer expressly agrees otherwise, and provided that the consumer does not incur any other additional costs as a result of such reimbursement..


3. The trader shall not be obliged to reimburse the consumer for any additional costs arising from the fact that the consumer has made a clear choice other than the cheapest usual method of delivery proposed by the trader.


4. The trader may withhold the reimbursement of sums paid by the consumer until the goods have been returned to the trader or until the consumer has provided proof that the goods have been dispatched to the trader, whichever occurs first, unless the trader is bound by the contractual obligation to take back the goods following the consumer’s withdrawal from the contract.


5. The consumer must, without delay and at the latest within 14 days from the


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following the consumer’s withdrawal from the contract.


5. The consumer must, without delay and at the latest within 14 days from the date on which the notice of withdrawal was given to the trader, send or hand over the goods to the trader or to another person authorised by the trader unless the trader is contractually obliged to take back the goods following the consumer’s withdrawal.


6. The consumer shall bear only the direct costs of returning the goods, except where, under the contract, these costs are borne by the trader, or where the trader has not duly informed the consumer that such costs will be borne by the consumer.


7. Where, in the case of an off-premises contract, the goods were delivered to the consumer’s place of residence at the time of conclusion of the contract, following the consumer’s withdrawal from the contract, the trader must withdraw the goods at his own expense when, due to the nature of the goods, the goods cannot normally be returned by post.


8. The consumer shall be liable only for the reduction in value of the goods resulting from actions which are not necessary to determine the nature, characteristics and functioning of the goods. The consumer shall not be liable for the reduction in the value of the goods if the trader has not provided the consumer with information on the right of withdrawal in accordance with point 7 of paragraph 1 of Article 6.2287 of this Code.


9.


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consumer with information on the right of withdrawal in accordance with point 7 of paragraph 1 of Article 6.2287 of this Code.


9. The consumer who withdraws from a contract in the cases referred to in paragraph 9 or 10 of Article 6.22810 of this Code shall be obliged to compensate the trader in proportion to the services provided up to the moment when the consumer gave the notice of withdrawal to the trader. The amount to be paid by the consumer to the trader shall be calculated in proportion to the value of the services provided on the basis of the total price fixed in the contract. Where the total price is too high, the proportionate amount shall be calculated on the basis of the market value of the services provided.


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10. The consumer shall not compensate for the services or energy supplied during the withdrawal period if:


1) the trader has not provided the consumer with information concerning the right of withdraw from the contract in accordance with point 7 of paragraph 1 of Article 6.2287 of this Code or with the information set out in point 9 of paragraph 1 of Article 6.2287 of this Code that the consumer must pay the trader’s reasonable costs in accordance with paragraph 9 of this Article; or


2) the consumer has not explicitly requested to start the provision of services or supply of energy during the withdrawal period in accordance with paragraph 9 or 10 of Article 6.22810 of this Code.        


11. The exercise of the consumer’s right to withdraw from the contract may not lead to any other expenses not provided for in this Article or in Article 6.22812 of this Code.


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12. Where the consumer exercises the right to withdraw from a distance or off-premises contract, ancillary contracts shall be automatically terminated at no cost to the consumer, except for the costs provided for in this Article or in Article 6.22812 of this Code. Contracts under which the consumer acquires goods or services relating to a distance contract or an off-premises contract and where those goods or services are supplied by the trader or by another person under an agreement with the trader shall be regarded as ancillary contracts. The consumer must inform the other party in writing without delay of the termination of the ancillary contract and provide details of the withdrawal from the distance or off-premises contract. A separate notice from the consumer shall not be required where the ancillary contract has been concluded with the same trader who has been notified of the withdrawal in accordance with Article 6.22810 of this Code.


13. When the consumer exercises the right of withdrawal, the trader must comply with the legal requirements for the protection of the consumer’s personal data.


14. The trader must refrain from using any content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader, except where such content:


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1) has no utility outside the context of the digital content or digital service supplied by the trader;


2) only relates to the consumer’s activity when using the digital content or digital service supplied by the trader;


3) has been aggregated with other data by the trader and cannot be disaggregated or only with disproportionate efforts;


4) has been generated jointly by the consumer and others, and other consumers are able to continue to make use of the content.


15. The trader must, at the request of the consumer, make available to the consumer any digital content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader, except in the cases provided for in points 1, 2 and 3 of paragraph 14 of this Article. The consumer shall be entitled to retrieve that digital content free of charge, without hindrance from the trader, within a reasonable time and in a commonly used and machine-readable format.  


16. Once the consumer has exercised the right of withdrawal, the trader shall be entitled to prevent any further use of the digital content or digital service by the consumer by making the digital content or digital service inaccessible to the consumer or disabling the user account of the consumer or by other means.


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17. After exercising the right of withdrawal, the consumer must refrain from using the digital content or digital service and from making it available to other persons.


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Article 6.22812. Specific features of the consumer’s right of withdrawal from consumer contracts for the supply of digital content


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1. No longer effective from 1 January 2022.


2. No longer effective from 1 January 2022.


3. No longer effective from 18 November 2016.


4. Where a consumer contract for the supply of digital content is a distance contract or an off-premises contract the performance of which is requested by the consumer before the expiry of the withdrawal period laid down in Article 6.22810 of this Code, the trader must additionally state in the confirmation of the contract to the consumer that the consumer’s prior express consent and acknowledgement of the loss of the right to withdraw has been obtained.


5. The withdrawal period laid down in Article 6.22810 of this Code for consumer contracts for the supply of digital content shall start to run from the date of conclusion of the contract.


6. In the cases referred to in point 13 of paragraph 2 of Article 6.22810 of this Code, the consumer shall not have the right to withdraw from the contract for the supply of digital content.


7. The consumer shall not have the obligation to pay for all or part of digital content not supplied on a durable medium where at least one of the following conditions applies:


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1) the consumer has not given his prior explicit consent to the commencement of the supply of digital content before the expiry of the time limit laid down in Article 6.22810  of this Code;


2) the consumer has not acknowledged the loss of the right of withdrawal  when giving his consent to the commencement of the supply of digital content;


3) the trader has not provided the consumer with a confirmation in accordance with paragraph 4 of this Article.


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Article 6.22813. Quality and safety requirements for goods and services


1. Goods and services sold to consumers must be safe and of adequate quality. The quality and safety requirements for goods and services shall be laid down by laws and other legal acts.


2. The sale of goods whose shelf-life has expired or which have been relabelled, repackaged or otherwise treated to extend their shelf-life shall be prohibited. The manufacturer shall not be liable for the safety and suitability of the goods for their intended purpose (product characteristics) after the expiry of the shelf-life of the goods.


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Article 6.22814. Quality guarantee (commercial guarantee)


1. Quality guarantee (commercial guarantee) shall mean an obligation on the part of the trader (seller or manufacturer) to reimburse the consumer for the price paid for the goods or services, or to replace, repair or otherwise remedy a defect in the goods or services where the goods or services do not conform to the conditions or requirements set out in the guarantee document or in the advertising provided at the time of or prior to the conclusion of the contract, which do not relate to the conformity of the goods or services with the contract.


2. The quality guarantee may not restrict the rights of the consumer as laid down in Article 6.3641 of this Code.


3. The quality guarantee must be provided in the official language. It must state that the quality guarantee does not restrict the consumer’s rights in the event of the purchase of goods or services of inadequate quality, and it must clearly and comprehensibly indicate the name and address of the registered office and e-delivery box of the guarantor as well as the terms and conditions of the guarantee, including its duration, territorial scope and the information needed for lodging a guarantee claim.


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4. At the consumer’s request, the quality guarantee must be provided to him in writing on paper or on another durable medium accessible to him.


5. The consumer shall have the right to claim a quality guarantee regardless of the fact that it has been granted in breach of the requirements laid down in this Article.

 


Article 6.22815. Trader’s liability and performance of an obligation in kind

If the trader fails to perform his obligations under a consumer contract, the payment of damages or the payment of penalties shall not exempt the trader from performing the obligation in kind.

 


Article 6.22816. Supply of goods or services without an order from the consumer


1. The consumer to whom unsolicited goods or services, including digital content, are supplied shall not have the obligation to pay for them. The consumer shall not incur any additional costs due to the receipt of unsolicited goods or services, as well as digital content.


2. An omission (silence) of the consumer to whom goods or services have been provided without his order shall not constitute consent to purchase.


3. The burden of proving that the consumer has expressed his will to conclude a consumer contract (ordering goods or services) shall lie with the trader.


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1. The provisions of Articles 6.22817 to 6.22824 of this Code shall apply to contracts under which the trader supplies or undertakes to supply digital content or digital service to the consumer and the consumer pays or undertakes to pay the price of the digital content or digital service. The provisions of these Articles shall also apply where the digital content or digital service is produced in accordance with the instructions of the consumer.


2. In addition, the provisions of Articles 6.22817 to 6.22824 of this Code shall apply where the trader supplies or undertakes to supply digital content or a digital service to the consumer and the consumer provides or undertakes to provide personal data to the trader, except where the trader only processes those personal data for the purposes of the provision of the digital content or digital service or to comply with legal requirements, and does not process those personal data for any other purposes.


3. The provisions of Articles 6.22817 to 6.22824 of this Code shall also apply to any tangible medium which serves exclusively as a carrier of digital content, with the exception of Article 6.22818 and paragraphs 1, 2 and 3 of Article 6.22822 of this Code. 


4. The provisions of Articles 6.22817 to 6.22824 of this Code shall not apply to digital content and digital services which are incorporated in or inter-connected with goods with digital elements and which are supplied together with those goods under


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not apply to digital content and digital services which are incorporated in or inter-connected with goods with digital elements and which are supplied together with those goods under the same sales contract, irrespective of whether the digital content or digital service is supplied by the seller or by another person. In the event of doubt as to whether the supply of incorporated or inter-connected digital content or an incorporated or inter-connected digital service forms part of the sales contract, the digital content or digital service shall be presumed to be covered by the sales contract.


5. The provisions of Articles 6.22817 to 6.22824 of this Code shall not apply to contracts regarding:


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1) the provision of services other than digital services, regardless of whether digital forms or means are used by the trader to produce the output of the service or to deliver or transmit it to the consumer;


2) electronic communications services, with the exception of number-independent interpersonal communications services as defined in the Law of the Republic of Lithuania on Electronic Communications;


3) health care services;


4) remote gambling services at the individual request of the consumer;


5) financial services;


6) software offered by the trader under a free and open-source licence, where the consumer does not pay a price for the digital content or digital service and the personal data provided by the consumer are exclusively processed by the trader for the purpose of improving the security, compatibility or interoperability of that specific software;


7) the supply of digital content where the digital content is made available to the general public other than by signal transmission as a part of a performance or event, such as digital cinematographic projections;


8) digital content provided by public sector bodies in accordance with the Law of the Republic of Lithuania on the Right to Obtain Information from State and Municipal Institutions and Agencies.


6. Where digital content or digital services and other services or goods are supplied under the same consumer contract, the provisions of Articles Articles 6.22817 to 6.22824 of this Code shall only apply to the part of the contract concerning the digital content


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the provisions of Articles Articles 6.22817 to 6.22824 of this Code shall only apply to the part of the contract concerning the digital content or digital service.


7. Where other laws or legal acts of the European Union regulating the protection of personal data lay down rules other than those provided for in Articles 6.22817 to 6.22824 of this Code, the rules of these Articles shall apply to the extent that they do not conflict with the rules governing the protection of personal data.


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Article 6.22818. Supply of digital content or digital services


1. Unless the parties have agreed otherwise, the trader must supply the digital content or digital service to the consumer without delay after the conclusion of the contract.


2. The trader shall have complied with the obligation to supply when:


1) the digital content or any means suitable for accessing or downloading the digital content is made available or accessible to the consumer, or to a physical or virtual facility chosen by the consumer for that purpose;


2) the digital service is made accessible to the consumer or to a physical or virtual facility chosen by the consumer for that purpose.


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Article 6.22819. Quality requirements for digital content and digital services


1. The trader must supply the consumer with the digital content or digital service complying with the requirements laid down in this Article.


2. The digital content or digital service must comply with all of the following requirements, provided that they are applicable:


1) be of the description, quantity and quality, and possess the functionality, compatibility, interoperability and other features, as required by the contract;


2) be fit for any particular purpose for which the consumer requires it and which the consumer made known to the trader at the latest at the time of the conclusion of the contract, and in respect of which the trader has given acceptance;


3) be supplied with all accessories, instructions, including on installation, and customer assistance as required by the contract;


4) be updated as stipulated by the contract.


3. In addition, the digital content or digital service must meet all of the following requirements:


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1) be fit for the purposes for which digital content or digital services of the same type would normally be used, taking into account any applicable legal provisions, technical standards or, in the absence of such technical standards, applicable codes of conduct;


2) be of the quantity and possess the qualities and performance features, including in relation to functionality, compatibility, accessibility, continuity and security, normal for digital content or digital services of the same type and which the consumer may reasonably expect, given the nature of the digital content or digital service and taking into account any public statement made by or on behalf of the trader, or other persons in previous links of the chain of transactions, particularly in advertising or on labelling, except for the cases referred to in paragraph 4 of this Article;


3) where applicable, be supplied along with any accessories and instructions which the consumer may reasonably expect to receive;


4) comply with any trial version or preview of the digital content or digital service, made available by the trader before the conclusion of the contract.


4. The public statements referred to in point 2 of paragraph 3 of this Article shall not bind the trader if he proves that at least one of the following conditions is met:


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1) the trader was not, and could not reasonably have been, aware of the public statement in question;


2) by the time of conclusion of the contract, the public statement had been corrected in the same way as, or in a way comparable to how, it had been made;


3) the decision to acquire the digital content or digital service could not have been influenced by the public statement.


5. The trader must ensure that the consumer is informed of and supplied with updates, including security updates, that are necessary to ensure the adequate quality of the digital content or digital service, for the period of time:


1) during which the digital content or digital service is to be supplied under the contract, where the contract provides for a continuous supply over a period of time;


2) that the consumer may reasonably expect, given the type and purpose of the digital content or digital service and taking into account the circumstances and nature of the contract, where the contract provides for a single act of supply or a series of individual acts of supply.


6. Where the consumer fails to install, within a reasonable time, updates supplied by the trader in accordance with paragraph 5 of this Article, the trader shall not be liable for any lack of conformity resulting solely from the lack of the relevant update, provided that both of the following conditions are met:


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1) the trader informed the consumer about the availability of the update and the consequences of the failure of the consumer to install it;


2) the failure of the consumer to install or the incorrect installation by the consumer of the update was not due to shortcomings in the installation instructions provided by the trader.


7. Where the contract provides for a continuous supply of digital content or digital service over a specific period of time, the trader shall be responsible for the proper supply of the digital content or digital service throughout the duration of that period.


8. Where, at the time of the conclusion of the contract, the consumer was specifically informed that a particular characteristic of the digital content or digital service was deviating from the requirements laid down in paragraphs 3, 4 or 5 of this Article and the consumer expressly and separately accepted that deviation when concluding the contract, it shall be considered that the digital content or digital service is of adequate quality.


9. Unless the parties have agreed otherwise, digital content or a digital service must be supplied in the most recent version available at the time of the conclusion of the contract.


10. The trader shall be responsible for any lack of conformity resulting from the incorrect integration of the digital content or digital service into the consumer’s digital environment in the following cases:


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1) the digital content or digital service was integrated by the trader or under the trader’s responsibility;


2) the digital content or digital service was intended to be integrated by the consumer and the incorrect integration was due to shortcomings in the integration instructions provided by the trader.


11. Where a violation of intellectual property rights or any other rights of other persons prevents or limits the consumer’s use of the digital content or digital service, the consumer shall be entitled to the remedies in accordance with the provisions of paragraphs 4 to 9 of Article 6.22822 of this Code.


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Article 6.22820. Statutory guarantee


1. The trader shall be liable to the customer for any failure to supply the digital content or digital service in accordance with the requirements laid down in Article 6.22818 of this Code.


2. Where a contract provides for a single act of supply or a series of individual acts of supply of digital content or a digital service, the trader shall be liable for any lack of conformity with the requirements laid down in Article 6.22819 of this Code which exists at the time of supply and becomes apparent within a period of two years from the time of supply.


3. Where the contract provides for a continuous supply of digital content or a digital service over a period of time, the trader shall be liable for any lack of conformity with the requirements laid down in Article 6.22819 of this Code that occurs or becomes apparent within the period of time during which the digital content or digital service is to be supplied under the contract.


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1. The burden of proof with regard to whether the digital content or digital service was supplied in accordance with the requirements laid down in Article 6.22818 of this Code shall be on the trader.


2. Where a contract provides for a single act of supply or a series of individual acts of supply of digital content or a digital service and the inadequate quality of the digital content or digital service becomes apparent within one year of the supply of the digital content or digital service, the burden of proof with regard to whether the supplied digital content or digital service was in conformity with the quality requirements at the time of supply shall be on the trader.


3. Where the contract provides for a continuous supply of digital content or a digital service over a period of time and the inadequate quality of the digital content or digital service becomes apparent within that period, the burden of proof with regard to whether the digital content or digital service is in conformity with the quality requirements for the period covered by the contract shall be on the trader.


4. Paragraphs 2 and 3 of this Article shall not apply where the trader demonstrates that the digital environment of the consumer is not compatible with the technical requirements of the digital content or digital service and where the trader informed the consumer of such requirements in a clear and comprehensible manner before the conclusion of the contract.


5. The consumer must cooperate with the trader, to the extent reasonably possible and necessary, to ascertain whether the cause of the lack of conformity


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The consumer must cooperate with the trader, to the extent reasonably possible and necessary, to ascertain whether the cause of the lack of conformity of the digital content or digital service, which became apparent within the period specified in paragraph 2 or 3 of Article 6.22820 of this Code, lay in the consumer’s digital environment. The obligation of the consumer to cooperate shall be limited to the technically available means which are least intrusive for the consumer. Where the consumer fails to cooperate, and where the trader informed the consumer of such requirement in a clear and comprehensible manner before the conclusion of the contract, the burden of proof with regard to inadequate quality of the digital content or digital service shall be on the consumer.


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Article 6.22822. Consumer rights in cases of the failure to supply or inadequate quality of the digital content or digital service


1. Where the trader fails to fulfil his obligation to supply the digital content or digital service in accordance with Article 6.22818 of this Code, the consumer shall call upon the trader to supply the digital content or digital service. If the trader then fails to supply the digital content or digital service without delay, or within an additional period of time, as expressly agreed to by the parties, the consumer shall be entitled to unilaterally terminate the contract.


2. The provisions of paragraph 1 of this Article shall not apply, and the consumer shall be entitled to unilaterally terminate the contract immediately, where:


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1) the trader has declared, or it is equally clear from the circumstances, that the trader will not supply the digital content or digital service;


2) the consumer and the trader have agreed, or it is clear from the circumstances attending the conclusion of the contract, that the supply of the digital content or digital service within the time period laid down in the contract is essential for the consumer and the trader has failed to supply them within the prescribed period.


3. Where the consumer terminates the contract on the grounds provided for in paragraph 1 or 2 of this Article, the provisions of Article 6.22823 of this Code shall apply.


4. In the case of a lack of conformity of the digital content or digital service with the requirements laid down in Article 6.22819 of this Code, the consumer shall be entitled to have the digital content or digital service brought into conformity, to receive a proportionate reduction in the price, or to unilaterally terminate the contract, in accordance with the provisions of this Article.


5. The consumer shall be entitled to have the digital content or digital service brought into conformity, unless this would be impossible or would impose costs on the trader that would be disproportionate, taking into account all the circumstances of the case including:


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1) the value the digital content or digital service would have if there were no lack of conformity;


2) the significance of the lack of conformity.


6. The trader must bring the digital content or digital service into conformity by complying with all of the following requirements:


1) within a reasonable time from the moment the trader has been informed by the consumer about the lack of conformity;


2) free of charge;


3) without any significant inconvenience to the consumer, taking account of the nature of the digital content or digital service and the purpose for which the consumer required the digital content or digital service.


7. The consumer shall be entitled to either a proportionate reduction of the price where the digital content or digital service is supplied in exchange for a payment of a price, or the unilateral termination of the contract, in any of the following cases:


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1) the remedy to bring the digital content or digital service into conformity is impossible or disproportionate for the trader taking into account all the circumstances;


2) the trader has not brought the digital content or digital service into conformity in accordance with paragraph 6 of this Article;


3) a lack of conformity appears despite the trader’s attempt to bring the digital content or digital service into conformity;  


4) the lack of conformity is of a serious nature;


5) the trader has declared, or it is clear from the circumstances, that the trader will not bring the digital content or digital service into conformity within a reasonable time, or without significant inconvenience for the consumer.


8. The reduction in price must be proportionate to the decrease in the value of the digital content or digital service which was supplied to the consumer compared to the value that the digital content or digital service would have if it were in conformity. Where the contract stipulates that the digital content or digital service is to be continuously supplied over a period of time in exchange for the payment of a price, the reduction in price shall apply to the period of time during which the digital content or digital service was not in conformity.


9. Where the digital content or digital service is supplied in exchange for the payment of a price, the consumer shall be entitled to terminate the contract only if the lack of conformity is not minor.    The burden of proof with regard to whether the


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consumer shall be entitled to terminate the contract only if the lack of conformity is not minor.    The burden of proof with regard to whether the lack of conformity is minor shall be on the trader.


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10. The consumer shall have the right to suspend payment of the price or part of the price of the digital content or digital service until the trader has brought the digital content or digital service into conformity.


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1. This Article shall apply where the consumer terminates the contract in accordance with the provisions of paragraphs 1, 2 or 7 of Article 6.22822 or Article 6.22824 of this Code.


2. The consumer shall exercise the right to terminate the contract by means of a statement to the trader expressing the decision to terminate the contract.


3. In the event of termination of the contract, the trader must reimburse the consumer for all sums paid under the contract. In cases where the contract provides for the supply of the digital content or digital service in exchange for a payment of a price and over a period of time, and the digital content or digital service had been in conformity for a period of time prior to the termination of the contract, the trader must reimburse the consumer only for the proportionate part of the price paid corresponding to the period of time during which the digital content or digital service was not in conformity, and any part of the price paid by the consumer in advance for any period of the contract that would have remained had the contract not been terminated.


4. Upon termination of the contract, the trader must comply with the consumer’s personal data protection requirements laid down in laws and European Union legal acts regulating the protection of personal data.


5. The trader must refrain from using any content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader, except where such


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content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader, except where such content:


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1) has no utility outside the context of the digital content or digital service supplied by the trader;


2) only relates to the consumer’s activity when using the digital content or digital service supplied by the trader


3) has been aggregated with other data by the trader and cannot be disaggregated or only with disproportionate efforts;


4) has been generated jointly by the consumer and others, and other consumers are able to continue to make use of the content.


6. The trader must, at the request of the consumer, make available to the consumer any digital content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader, except in the cases provided for in points 1, 2 and 3 of paragraph 5 of this Article.  The consumer shall be entitled to retrieve that digital content free of charge, without hindrance from the trader, within a reasonable time and in a commonly used and machine-readable format. 


7. After the termination of the contract, the trader shall be entitled to prevent any further use of the digital content or digital service by the consumer by making the digital content or digital service inaccessible to the consumer or disabling the user account of the consumer or by other means.


8. After the termination of the contract, the consumer must refrain from using the digital content or digital service and from making it available to other persons.


9. Where


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of the contract, the consumer must refrain from using the digital content or digital service and from making it available to other persons.


9. Where the digital content was supplied on a tangible medium, the consumer must, at the request of the trader, return the tangible medium to the trader without delay. The costs of the return shall be borne by the trader. The trader shall have the right to make a request for the return of the tangible medium within 14 days of the day on which the trader is informed of the consumer’s decision to terminate the contract.


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10. The consumer shall not be liable to pay for any use made of the digital content or digital service in the period, prior to the termination of the contract, during which the digital content or the digital service was not in conformity.


11. Any reimbursement that is owed to the consumer by the trader due to a price reduction or termination of the contract must be carried out no later than within 14 days of the date on which the trader is informed of the consumer’s decision to invoke the consumer’s right for a price reduction or to terminate the contract.


12. The trader must carry out the reimbursement using the same means of payment as the consumer used to pay for the digital content or digital service, unless the consumer expressly agrees otherwise, and provided that the consumer does not incur any additional expenses as a result of such reimbursement.


13. The trader shall be prohibited from imposing any fee on the consumer in respect of the reimbursement.


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Article 6.22824.  Modification of the digital content or digital services


1. Where the contract provides that the digital content or digital service is to be supplied or made accessible to the consumer over a period of time, the trader shall have the right to modify the digital content or digital service beyond what is necessary to maintain the digital content or digital service in conformity if all of the following conditions are met:


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1) the contract allows, and provides a valid reason for, such a modification;


2) such a modification is made without additional cost to the consumer;


3) the consumer is informed in a clear and comprehensible manner of the modification;


4) in the cases referred to in paragraph 2 of this Article, the consumer is informed reasonably in advance on a durable medium of the features and time of the modification and of the right to terminate the contract in accordance with paragraph 2 of this Article, or of the possibility to maintain the digital content or digital service without such a modification in accordance with paragraph 3 of this Article.


2. The consumer shall be entitled to terminate the contract if the modification negatively impacts the consumer’s access to or use of the digital content or digital service, unless such negative impact is only minor. The consumer shall be entitled to terminate the contract free of charge within 30 days of the receipt of the information referred to in point 4 of paragraph 1 of this Article or of the time when the digital content or digital service has been modified by the trader, whichever is later. In the event of termination of the contract by the consumer, the provisions of Article 6.22823 of this Code shall apply.


3. The provisions of paragraph 2 of this Article shall not apply if the trader has enabled the consumer to maintain without additional cost the digital content or digital service without the modification, and the digital content or digital service remains in


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the trader has enabled the consumer to maintain without additional cost the digital content or digital service without the modification, and the digital content or digital service remains in conformity.


4. The provisions of this Article shall not apply to the supply of digital content or a digital service and internet access service or number-based interpersonal communications service under the same consumer contract.


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Part III

OBLIGATIONS ARISING ON OTHER GROUNDS

 


CHAPTER XIX

MANAGEMENT OF THE AFFAIRS OF ANOTHER PERSON


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1. Where a person voluntarily and without any mandate, instruction or previous assent to act undertakes the management of the affairs of another person, where such management does not fall within his duties, he must manage them in such a way that it conforms to the interests of that other person. The obligations arising on the basis of these activities shall be binding on the person managing the affairs of another person. The activities of the person managing the affairs of another person (manager) shall be governed mutatis mutandis by the provisions of Book Four of this Code regulating simple administration of another’s property.


2. A person who assumes the management of the affairs of another person shall be bound to continue the management undertaken until that other person (principal) is in a position to attend to it himself, or until his guardian, curator or administrator of the property is appointed; if the principal dies, the duty to continue the management shall remain in existence until his heirs take over the management.


3. A person managing the affairs of another person must as soon as reasonably possible inform the principal of everything that has been done; he must also render in writing a comprehensive account of income, expenditure and loss.


4. A person managing the affairs of another person must exercise the necessary concern in his management to the extent that can reasonably be required of him, taking into consideration the concrete circumstances in which he acts.


5. The provisions of this Article shall not


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that can reasonably be required of him, taking into consideration the concrete circumstances in which he acts.


5. The provisions of this Article shall not apply to the activities of state and municipal institutions which act in the interests of other persons if the performance of such activity is within the duties of the institutions concerned.


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Article 6.230. Managing of the affairs of another person against his will


1. A person who manages the affairs of another person against the latter’s will being aware of that shall be liable to compensate the person against whose will he has acted for the damage caused by his actions.


2. A person’s consent or refusal to have his affairs managed by another person shall be of no effect in the instances where an obligation whose performance corresponds to the public interest, or the obligation to maintain another person would not be performed in time without such consent, or where effort is undertaken to avert danger threatening a person’s life.


3. Actions performed by the manager of the affairs of another person after he became aware of the person’s, for the benefit of whom the affairs are conducted, disapproval of such actions shall not create any obligations for the person concerned, neither for the person performing the indicated actions, nor third persons.

 


Article 6.231. Managing of the affairs of another person in case of danger

If a person has undertaken the management of the affairs of another person in order to protect the latter against real danger to his person or property, the former shall not be held liable for damages inflicted unless he acted intentionally or in gross negligence.


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Article 6.232. Ratification of actions

Subsequent ratification of actions of a manager made by the person whose affairs were managed by the former without a mandate produces the same effects with respect to the management as would have arisen from a contract of mandate or any other contract best corresponding to the nature of the performed actions.


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Article 6.233. Reimbursement of expenses incurred


1. When the management of the affairs of another person has been rightly undertaken and conformed to the principal’s interests, the principal shall be bound to perform the obligations assumed by the manager in his name. In addition, the principal must reimburse the manager for all the useful and necessary expenses incurred and compensate for the damages suffered by reason of the management of his affairs, irrespective of whether the desired result has been attained.


2. Expenses incurred in the cases provided for in paragraph 1 of Article 6.230 of this Code shall not be reimbursed.


3. In the instances indicated in Article 6.321 of this Code, reimbursement of expenses incurred may be claimed in any case.


4. Where management of the affairs of another person has yielded positive results to the latter, the manager, who has conducted the affairs, shall be entitled to remuneration. In the case of disagreement between the parties, the amount of remuneration shall be established by the court taking in consideration the concrete circumstances of the case and being guided by the principles of justice, reasonableness and good faith.


5. The expenses or damages incurred by a person in managing the affairs of another person with the consent of the latter shall be subject to reimbursement in accordance with the rules governing the appropriate nominate contract.


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Article 6.234. Return of the received property


1. A person who has been managing the affairs of another person must return to the latter the property received by reason of the management, including the fruits and income therefrom.


2. Upon ratification of the management of affairs by the principal, the manager shall acquire the right to claim reimbursement of expenses in accordance with Article 6.233 of this Code.


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Article 6.235. Legal effects of a transaction formed on behalf and in the interests of another person


1. Obligations arising from a transaction formed on behalf and in the interests of another person shall be assumed by the person on whose behalf and in whose interests the said transaction is formed, providing that the latter ratifies the transaction and the other party to the transaction does not contradict to such assumption, or that this other party on entering into the transaction was aware or ought to have been aware of the transaction being formed on behalf and in the interests of another person.


2. Where the principal assumes the obligations resulting from a transaction formed in his interests, the rights arising from the said transaction must be likewise transferred to the principal.


3. Where a transaction in the interests of another person is formed by the manager of affairs of that person on his own behalf, the latter shall be liable towards the third persons for obligations resulting from that transaction.  However, this provision shall not affect the exercise of the manager’s and third persons’ rights connected with the person whose affairs were managed.

 


Article 6.236. Supposed managing of the affairs of another person

Provisions of this Chapter shall not apply if the management of the affairs of another person is performed by a person believing to be managing his own affairs.


