CIVIL CODE

OF THE REPUBLIC OF LITHUANIA

18 July 2000 No VIII-1864

Vilnius

(Last amended on 12 April 2011 No XI-1312)

BOOK ONE

GENERAL PROVISIONS

PART I

CIVIL LAWS AND THEIR APPLICATION

CHAPTER I

CIVIL LAWS AND THE RELATIONSHIPS THEY REGULATE

Article 1.1. Relationships regulated by the Civil Code of the Republic of Lithuania

1. The Civil Code of the Republic of Lithuania shall govern property relationships and

personal non-property relationships related with the aforesaid relations, as well as family

relationships. In the cases provided for by laws, other personal non-property relationships shall

likewise be regulated by this Code.

2. The provisions established by this Code shall apply to property relationships based on the

legal subordination of persons to state institutions and directly resultant from their exercise of

functions of state power (realization of subordination), or from the performance of persons’

obligations established by laws towards the state, or from the infliction of administrative or criminal

sanctions established by laws, including relationships in the field of taxation and other obligatory

payments or dues to the state or to its institutions, also in the field of the state budget, as well as to

any other relationships governed by the provisions of public law to the extent that these relationships

are not regulated by the relevant laws, also in the cases when it is expressly prescribed by this Code.

3. Labour relationships shall be regulated by special laws. The provisions of this Code shall

apply to labour relations to the extent that they are not regulated by special laws.

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Article 1.2. Principles of legal regulation of civil relationships

1. Civil relationships shall be regulated in accordance with the principles of equality of their

subjects’ rights, inviolability of property, freedom of contract, non-interference in private relations,

legal certainty, proportionality, and legitimate expectations, prohibition to abuse a right, as well as

the principles of comprehensive judicial protection of civil rights.

2. No civil rights may be limited, except in the cases established by laws, or on the basis of a

court judgment made in accordance with laws, where such limitation is necessary to protect public

order, the principles of good morals, likewise the health and life of people, property of persons, their

rights and lawful interests.

Article 1.3. Sources of civil law

1. The sources of the Civil law shall be the Constitution of the Republic of Lithuania, the

present Code, other laws and international treaties of the Republic of Lithuania.

2. In the eventuality of contradictions between the present Code and other laws, the

provisions of this Code shall apply, except in cases where this Code gives priority to the provisions

of other laws.

3. When implementing legal acts of the European Union, other laws may lay down the

norms, regulating civil legal relationships, other than those laid down by this Code. In this case the

Civil Code shall apply to the extent other laws do not specify otherwise.

4. Civil relationships may be regulated by the decisions of the Government and legal acts of

other state institutions only in the cases and to the extent expressly indicated by laws. Where legal

acts of the Government or those of the other state institutions contradict the provisions of the present

Code or the norms of other laws, the provisions of the Civil Code, or those of the other laws shall

prevail.

5. A court has the right to declare a legal act or a part thereof void if it contradicts the Civil

Code or another law in those cases where the supervision of the conformity of this act to the

Constitution or to other laws is not within the competence of the Constitutional Court. The court,

having recognized such a legal act to be void, shall within 3 days send a copy of its judgement to the

institution or the official that has passed the legal act concerned. The res judicata court judgement

shall be published in “Valstybės žinios” (“The Official Gazette”).

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Article 1.4. Customs

1. In the cases established by laws or agreed on in contracts, civil relationships shall be

regulated by customs.

2. Customs may not be applied if they are contrary to the mandatory legal norms or to the

principles of good faith, reasonableness and justice.

Article 1.5. Application of the criteria of justice, reasonableness and good faith

1. In exercise of their rights and performance of their duties, the subjects of civil

relationships shall act according to the principles of justice, reasonableness and good faith.

2. In the cases when laws do not prevent subjects of civil legal relationships from

determining their mutual rights and duties upon agreement between themselves, these subjects shall

act in accordance with the principles of justice, reasonableness and good faith.

3. If laws or an agreement between the parties provide for certain issues to be decided by a

court according to its discretion, the court shall act in accordance with the principles of justice,

reasonableness and good faith.

4. In interpreting and applying laws, the court shall be guided by the principles of justice,

reasonableness and good faith.

Article 1.6. Ignorance of laws or improper understanding thereof

Ignorance of laws or improper understanding thereof shall not exempt from the application

of the sanctions established therein, and shall not justify the failure to comply with the requirements

of laws, likewise improper compliance therewith.

Article 1.7. The effect of civil laws

1. Civil laws and the other legal acts regulating civil relationships shall enter into force only

upon their publication within the procedure established by the laws.

2. Civil laws and other legal acts regulating civil relationships shall have no retroactive

effect.

Article 1.8. Analogy of a statute and law

1. Civil relationships not regulated by the norms of the Civil law shall be governed by civil

laws that regulate similar relationships (analogy of statute).

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2. In absence of relevant civil laws regulating similar relationships, general principles of law

shall be applied (analogy of law).

3. Special norms, i.e. those establishing exceptions to general rules, may not be applied by

analogy.

Article 1.9. Principles of interpretation of the Civil Code provisions

1. In order to ensure the integrity of the present Code and the conformity of its separate

structural parts, the provisions of this Code in the process of their application shall be interpreted by

taking into account the structure and system of this Code.

2. The words and word combinations used in this Code shall be interpreted according to their

general meaning, except in those cases where it is clear from the context that a word or word

combination is used in a special – legal, technical or any other – meaning. In the cases of non-

conformity between the general and the special meaning of a word, priority shall be given to the

special meaning.

3. In determining the right meaning of an applicable norm, the purposes and tasks of the

Civil Code and the norm concerned shall be taken into consideration.

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CHAPTER II

PRIVATE INTERNATIONAL LAW

SECTION ONE

GENERAL PROVISIONS

Article 1.10. Application of foreign law

1. Foreign law shall apply to civil relationships where it is so provided for by the

international treaties of the Republic of Lithuania, agreements between the parties or the laws of the

Republic of Lithuania.

2. A reference to foreign law shall include all the provisions applicable to the facts of a case

under that law. The application of a provision of foreign law may not be precluded solely because of

the provision being attributed to public law.

3. A reference to an applicable foreign law means a reference to the national material law of

the state concerned, but not a reference to the private international law of that state, except in cases

provided for by this Code.

4. Where the legal system of the state to which the renvoi is made by the provisions of this

Code comprises different legal systems based on the criteria of division into several territorial units,

a reference to an applicable foreign law shall mean a reference to the legal system of the relevant

territory determined in accordance with the criteria established in the law of that foreign state.

5. Where the legal system of the state to which renvoi is made by the provisions of this Code

comprises several legal systems applied to different categories of persons, the applicable legal

systems shall be determined in accordance with the criteria established in the law of that foreign

state.

6. Where the criteria foreseen in paragraphs 4 and 5 of this Article may not be identified

within the scope of the applicable foreign law, the law of the legal system to which the relevant case

is most closely connected shall apply.

Article 1.11. Limitation of the application of foreign law

1. The provisions of foreign law shall not be applied where the application thereof might be

inconsistent with the public order established by the Constitution of the Republic of Lithuania and

other laws. In such instances, the civil laws of the Republic of Lithuania shall apply.

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2. Mandatory provisions of laws of the Republic of Lithuania or those of any other state most

closely related with a dispute shall be applicable regardless of the fact that another foreign law has

been agreed upon by the parties. In deciding on these issues, the court shall take into consideration

the nature of these provisions, their purpose and the consequences of application or non-application

thereof.

3. In accordance with this Code, the applicable foreign law may not be given effect where, in

the light of all attendant circumstances of the case, it becomes evident that the foreign law

concerned is clearly not pertinent to the case or its part, with the case in question being more closely

connected with the law of another state. This provision shall not apply where the applicable law is

determined by the agreement of the parties.

Article 1.12. Determination of the content of foreign law

1. In the cases established by the international treaties of the Republic of Lithuania or by the

laws of the Republic of Lithuania, the application, interpretation and determination of the content of

foreign law shall be performed by the court ex officio (on its own initiative).

2. In the instances where the application of foreign law is established upon agreement

between the parties, the burden of proof in relation to the content of the applicable foreign law in

accordance with its official interpretation, practice of application and the law doctrine in the relevant

foreign state, shall be imposed on the disputing party that refers to the foreign law. Upon request of

the disputing party, the court may provide assistance in collecting information on the applicable

foreign law.

3. If the court or the disputing party that refers to foreign law fails to perform the obligation

indicated in paragraphs 1 and 2 of this Article, the law of the Republic of Lithuania shall apply.

4. In the exceptional cases where it is necessary to take immediate interim measures to

protect the rights or the property of a person, the court may decide on the urgent questions by

applying the law of the Republic of Lithuania pending the determination of the law applicable to the

dispute and the content thereof.

Article 1.13. International treaties

1. Where the provisions established in the international treaties of the Republic of Lithuania

are different from those determined by the present Code and other laws of the Republic of Lithuania,

the provisions of the international treaties of the Republic of Lithuania shall apply.

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2. The international treaties of the Republic of Lithuania shall apply to civil relationships

directly, except in cases where an international treaty establishes that a special national legal act is

necessary for its application.

3. The provisions of international treaties shall be applied and interpreted in accordance with

their international character and the necessity to guarantee a unified interpretation and application

thereof.

Article 1.14. Referring back and referring to the law of a third state (renvoi)

1. If the applicable foreign law refers back to the Lithuanian law, that reference shall be

observed only in the instances provided for by this Code or the foreign law.2. If the applicable

foreign law refers to the law of a third state, that reference shall be observed only in the instances

provided for by this Code or the law of the third state.

3. If in the matters of determining the civil legal status of a person, the applicable foreign law

refers back to the law of the Republic of Lithuania, such reference shall be observed.

4. Paragraphs 1, 2 and 3 of this Article shall not apply in the instances where the applicable

law has been chosen by the parties to a transaction, likewise in determining the applicable law to the

form of a transaction and to non-contractual obligations.

5. Where the provisions of this Chapter provide for the application of an international treaty

(convention), the matters of renvoi, i.e. referring back and referring to the law of a third state, shall

be decided in accordance with the provisions of the applicable international treaty (convention).

SECTION TWO

LAW APPLICABLE TO THE CIVIL LEGAL STATUS OF NATURAL PERSONS

Article 1.15. Civil capacity of foreign citizens and stateless persons

1. Foreign citizens in the Republic of Lithuania shall possess the same civil capacity as the

citizens of the Republic of Lithuania. Exceptions to this rule may be established by the laws of the

Republic of Lithuania.

2. The time of birth and death of foreign citizens shall be determined in accordance with the

law of the state where was the domicile of the foreign citizens (Article 2.12 of this Code) at the

moment of their birth or death.

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3. Stateless persons shall possess the same civil capacity as the citizens of the Republic of

Lithuania. Special exceptions to this rule may be established by the laws of the Republic of

Lithuania.

4. The time of birth and death of stateless persons shall be determined in accordance with the

law of the state where was the domicile of the stateless persons at the moment of their birth or death.

Article 1.16.Civil active capacity of foreign citizens and stateless persons

1. Civil active capacity of foreign citizens or stateless persons shall be governed by the laws

of their state of domicile.

2. If such persons have no domicile or it cannot be determined with certainty, their legal

active capacity shall be determined in accordance with the laws of the state within the territory of

which these persons formed a relevant transaction.

3. If a person has residence in more than one state, the law of the state with which he is the

most closely connected shall apply.

4. The ascertainment of incapacity or limited capacity of foreign citizens and stateless

persons with permanent residence in the Republic of Lithuania shall be governed by the laws of the

Republic of Lithuania.

5. A change of domicile shall not affect civil active capacity if that capacity was acquired

prior to the change of domicile.

Article 1.17. Prohibition to invoke incapacity

1. A party to a transaction, who is incapable under the law of the state of his domicile may

not invoke his incapacity if he was capable under the law of the state in which the transaction was

formed, unless the other party was or should have been aware of the first party’s incapacity under

the law of the state of the latter’s domicile.

2. Provisions of paragraph 1 of this Article shall not apply to family law and the law of

succession, as well as to real rights.

Article 1.18. Declaration of foreign citizens and stateless persons to be missing or dead

Foreign citizens and stateless persons shall be acknowledged missing or declared dead in

accordance with the law of the state of their last known domicile.

SECTION THREE

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LAW APPLICABLE TO LEGAL PERSONS OR ANY OTHER ORGANISATIONS

Article 1.19. Civil capacity of foreign legal persons or any other organisations

1. Civil capacity of foreign legal persons or any other organisations shall be governed by the

laws of the state where these persons or organizations are founded.

2. If the procedure of founding a foreign legal person or any other organisation has been

violated, its civil capacity shall be determined by the law of the state of its actual functioning.

3. Irrespective of the state of foundation of a legal person or any other organisation, the civil

capacity of its subdivisions shall be determined in accordance with the law of the Republic of

Lithuania if the head office, principal place of business or other activity of the subdivision is located

in the Republic of Lithuania.

4. Merger, association or transfer of the head office of legal persons or any other

organizations, one of which is located in the Republic of Lithuania and the other in a foreign state,

shall have effect on their civil capacity in the Republic of Lithuania only if implemented in

conformity with the laws of both states concerned.

Article 1.20. Issues regulated in accordance with the applicable law

1.The following shall be regulated in accordance with the applicable law determined in

Article 1.19 of this Code:

1) the legal nature (legal form and status) of a legal person or any other organization;

2) foundation, reorganization and liquidation of a legal person or any other organization;

3) the name of a legal person or any other organization;

4) the system and competence of the bodies of a legal person or any other organization;

5) civil liability of a legal person or any other organization;

6) the power to represent a legal person or any other organization;

7) legal effects of the violation of laws or incorporation documents;

2. Protection against infringement of the business name of a legal person or any other

organization registered in the Republic of Lithuania shall be governed by the law of the Republic of

Lithuania.

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Article 1.21. Law applicable to the representative offices and branches of foreign legal persons

or any other organizations

1. Representative offices and branches of foreign legal persons or any other organizations

registered in the Republic of Lithuania shall be governed by the law of the Republic of Lithuania.

2. At least one of the persons acting on behalf of a representative office or a branch shall be

bound to reside in the Republic of Lithuania. This provision shall not apply to representative offices

or branches, established in the Republic of Lithuania, of the legal persons or other organizations of

the member states of the European Union and the states of the European Economic Area.

3. The rights and obligations (competence) of the persons acting on behalf of a representative

office or a branch registered in the Republic of Lithuania shall be determined by the law of the

Republic of Lithuania.

Article 1.22. Law applicable to representatives of foreign legal persons or any other

organizations and to their civil liability

1. If the business of a legal person or any other organization founded under foreign law is

conducted in the Republic of Lithuania, the civil liability of the persons acting on behalf and in the

interests of those legal persons or any other organizations shall be governed by the law of the

Republic of Lithuania.

2. A legal person or any other organization may not claim for annulment or invalidity of a

transaction formed by its body or any other representatives in excess of their competence (powers) if

the law of the state where the domicile or the head office of the other party to the transaction is

located does not provide for any restrictions on their representative powers, unless the other party

knew or, taking into account its position and the relationship with the other party, should have

known of such restrictions.

Article 1.23. Law applicable to the state and state institutions as well as to local governments

and local government institutions as subjects to civil legal relationships

Civil capacity of the state and state institutions as well as those of local governments and

local government institutions shall be governed by the law of the state concerned.

SECTION FOUR

LAW APPLICABLE TO FAMILY LEGAL RELATIONSHIPS

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Article 1.24. Law applicable to a promise to marriage

1. A promise to marry and its legal effects shall be governed by the law of the state of

domicile of the parties to the promise.

2. Where the parties to the promise of marriage are domiciled in different states, the promise

of marriage and its legal effects shall be governed by the law of the place where the promise was

made, or by the law of the state of domicile of one of the parties, or by the law of the state of

citizenship of one of the parties, whichever law is most closely related with the dispute.

Article 1.25. Law applicable to the conditions to contract marriage

1. Matrimonial capacity and other conditions to contract marriage shall be governed by the

law of the Republic of Lithuania.

2. Civil Registration Bureaus of the Republic of Lithuania shall have jurisdiction to perform

the registration of marriage if either of the persons intending to marry is domiciled in the Republic

of Lithuania or is a Lithuanian citizen at the time of solemnization of the marriage.

3. Matrimonial capacity and other conditions to contract marriage in respect of foreign

citizens and stateless persons without Lithuanian domicile may be determined by the law of the state

of domicile of both persons intending to marry if such marriage is recognized in the state of

domicile of either of them.

4. A marriage validly performed abroad shall be recognized in the Republic of Lithuania,

except in cases when both spouses domiciled in the Republic of Lithuania performed the marriage

abroad with the purpose of evading grounds for nullity of their marriage under Lithuanian law.

Article 1.26. Law applicable to the procedure of contracting marriage

The procedure of contracting marriage shall be determined in accordance with the law of the

state where the marriage is solemnized. Marriage shall also be recognized valid if the procedure of

its contracting is in compliance with the requirements of the law of the state of domicile of either of

the spouses or the law of the state of citizenship of either of them at the moment of solemnization of

the marriage.

Article 1.27. Law applicable to personal relations between spouses

1. Personal relations between spouses shall be governed by the law of the state of their

domicile.

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2. Personal relations between the spouses domiciled in different states shall be governed by

the law of the state of their last common domicile. Where the spouses have never had a common

domicile, the law applicable to their personal relations shall be the law of the state to which the

personal relations between the spouses are the most closely related. Where it is not possible to

determine to the law of which state the personal relations between the spouses are the most closely

related, the law of the state where the marriage was solemnized shall apply.

Article 1.28. Law applicable to matrimonial property relations between spouses

1. The matrimonial property legal regime shall be governed by the law of the state of

domicile of the spouses. Where the spouses are domiciled in different states, the law of their

common state of citizenship shall apply. Where the spouses have never had a common domicile and

are citizens of different states, the law of the state where the marriage was solemnized shall apply.

2. The law applicable to contractual legal regime of matrimonial property shall be

determined by the law of the state chosen by the spouses upon agreement. In this event, the spouses

may choose the law of the state in which they are both domiciled or will be domiciled in future, or

the law of the state in which the marriage was solemnized, or the law of the state a citizen of which

is one of the spouses. The agreement of the spouses upon the applicable law shall be valid if it is in

compliance with the requirements of the law of the chosen state or the law of the state in which the

agreement is made.

3. The applicable law chosen upon agreement of the spouses may be invoked against third

persons only if they knew or should have known of that fact, i.e. if the third party knew or should

have known the chosen law that governed the matrimonial property regime when the legal

relationship commenced.

4. The applicable law chosen upon agreement of the spouses may be used in resolving a

dispute related to real rights in immovable property only in the event if the requirements of public

registration of this property and of the real rights therein, as determined by the law of the state where

the property is located, were complied with.

5. Any agreed change of matrimonial property legal regime shall be governed by the law of

the state of domicile of the spouses at the time of the change. If the spouses were domiciled in

different states at the time of change of the matrimonial property legal regime, the applicable law

shall be the law of their last common domicile, or failing that, the law governing matrimonial

property relationships between the spouses.

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Article 1.29. Law applicable to separation and dissolution of marriage

1. Separation and dissolution of marriage shall be governed by the law of the spouses’ state

of domicile.

2. If the spouses do not have their common domicile, the law of the state of their last

common domicile shall apply, or failing that, the law of the state where the case is tried.

3. If the law of the state of common citizenship of the spouses does not permit dissolution of

marriage or imposes special conditions for dissolution, the dissolution of marriage may be

performed in accordance with the law of the Republic of Lithuania if one of the spouses is also a

Lithuanian citizen or is domiciled in the Republic of Lithuania.

Article 1.30. Jurisdiction in the cases of annulment, dissolution of marriage and separation

The courts of the Republic of Lithuania shall have jurisdiction over actions of annulment,

dissolution of marriage or separation in the cases provided for by the Code of Civil Procedure of the

Republic of Lithuania.

Article 1.31. Law applicable to the ascertainment of the origin of a child (legitimation)

1. The origin of a child (ascertainment or contest of paternity or maternity) shall be

established either in accordance with the law of the state the citizenship of which the child acquired

at his birth, or with the law of the state which is recognized as the domicile of the child at the time of

his birth, or with the law of the state in which one of the child’s parents is domiciled, or with the law

of the state the citizen of which one of the parents was at the time of the child’s birth, whichever is

more beneficial to the child.

2. The consequences of legitimation shall be governed by the law of the state of domicile of

the child.

3. If a child or one of his parents is domiciled in the Republic of Lithuania, the questions of

legitimation shall be decided by the courts or other state institutions of the Republic of Lithuania.

4. The parents’ (the father’s or the mother’s) legal active capacity in acknowledging

paternity (maternity) shall be governed by the law of the state of his or her domicile at the time of

the acknowledgement. The form of the acknowledgement of paternity (maternity) shall be governed

by the law of the state in which it is made or by the law of the state of the child’s domicile.

5. The provisions of this Article shall also apply to the legitimation of a child born out of

wedlock.

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Article 1.32. Law applicable to relations between the parents and the child

1. Personal and property relationships between the parents and the child shall be governed by

the law of the state of the child’s domicile.

2. If neither parent is domiciled in the state of the child’s domicile, while the child and the

parents are citizens of the same state, the law of the state of their common citizenship shall apply.

Article 1.33. Law applicable to adoption relationship

1. Relationships of adoption shall be governed by the law of the state of the child’s domicile.

2. Where it becomes evident that the adoption performed according to the law of the state of

the child’s (the adoptee’s) domicile will not be recognized in the state of domicile or citizenship of

the adoptive parents (adoptive parent), the adoption may be performed pursuant to the law of the

state of domicile or citizenship of the adopter (the adopters) if this will not prejudice the best

interests of the child. If the recognition of adoption remains uncertain, the adoption shall not be

allowed.

3. Relations between the adopted person (the adoptee) on the one side, and the adopting

persons (the adopters) and the relatives of the latter on the other side shall be governed by the law of

the state of the adopters’ (the adopter’s) domicile.

4. Cases related with adoption shall belong to the jurisdiction of the courts of the Republic of

Lithuania if the child (the adoptee) or the adopting persons (adopting person) are domiciled in the

Republic of Lithuania.

Article 1.34. Law applicable to protective measures in relation to minors, their guardianship

and curatorship

Law applicable to protection of minors, their guardianship and curatorship shall be

determined pursuant to the Hague Convention of 5 October 1961 concerning the Powers of

Authorities and the Law Applicable in Respect of the Protection of Minors.

Article 1.35. Law applicable to guardianship and curatorship of family members who have

reached majority

1. Guardianship and curatorship of family members who have reached majority shall be

governed by the law of the state of such incapable persons’ domicile.

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2. Cases related with guardianship or curatorship of persons who have reached majority shall

belong to the jurisdiction of the courts of the Republic of Lithuania if the incapable person’s

domicile or his property is located in the Republic of Lithuania.

Article 1.36. Law applicable to maintenance obligations (alimony relationships) within the

family

Maintenance obligations (alimony) within the family shall be governed by the Hague

Convention of 2 October 1973 on the Law Applicable to Maintenance Obligations.

SECTION FIVE

LAW APPLICABLE TO CONTRACTUAL OBLIGATIONS

Article 1.37. Law applicable to contractual obligations

1 Contractual obligations shall be governed by the law agreed by the parties. Such agreement

of the parties may be expressed in the form of separate terms of the concluded contract or it may be

determined in accordance with the factual circumstances of the case. The law of the state designated

by the agreement of the contracting parties may be applied to the whole contract or only to a part or

parts thereof.

2. The initially chosen law applicable to contractual obligations may be changed by the

agreement of the parties at any time. A change of law shall be retroactive to the time the contract

was concluded though such change may not adversely effect the rights of third persons and shall not

prejudice the formal validity of the contract.

3. The choice of the law applicable to a contract as made by the agreement of the parties may

not be the grounds for refusing to apply the mandatory legal norms of the Republic of Lithuania or

those of any other state that cannot be changed or declined by the agreement of the parties.

4. If no law applicable to a contractual obligation is designated by the agreement of the

contracting parties, the law of the state with which the contractual obligation is most closely

connected shall apply. The contractual obligation shall be presumed to be the most closely

connected with the state in the territory of which:

1) the party bound to perform the obligation most characteristic to the contract is domiciled

or has its central administration. If the obligation is most closely connected with the law of the state

where the business of the party to the obligation is located, the law of that state shall apply;

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2) immovable property is located, if the subject matter of the contract is the right in the

immovable property or the right to its use;

3) was the place of the principal business of a carrier at the time when the contract for

carriage was made, if the state of the principal business of the carrier is also the same state where the

cargo was loaded, or the head office of the sender is located, or the place the cargo was dispatched

from.

5. Paragraph 4 of this Article shall not apply where it is impossible to determine the place of

performance of the obligation most characteristic to the contract and the presumptions established in

this paragraph may not be relied upon as it is evident from the circumstances of the case that the

contract is most closely connected with another state.

6. A contract of insurance shall be governed by the law of the state where the domicile or the

place of business of the insurer is located; a contract of insurance in respect to an immovable thing

shall be governed by the law of the state in the territory of which the thing is located.

7. An arbitration agreement shall be governed by the law applicable to the principal contract,

and in the case of invalidity of the principal contract, by the law of the place where the arbitration

agreement was concluded, where it is impossible to identify the place of conclusion, the law of the

state in which arbitration is situated shall apply.

8. Contracts concluded in a stock exchange or auction shall be governed by the law of the

state in which the stock exchange or auction is located.

Article 1.38. Law applicable to the form of transaction

1. The form of transaction shall be governed by the provisions established in paragraph 1 of

Article 1.37 of this Code.

2. If no applicable law is designated by the agreement of the parties, the form of transaction

shall be governed by the laws of the place where the parties entered into that transaction. A contract

made by the parties residing in different states shall also be considered valid if its form corresponds

to the legal requirements in respect of the form of the relevant transaction established in the national

law of at least one of those states.

3. The form of transactions regarding an immovable thing or the rights therein shall be

governed by the law of the state in which the immovable thing is located.

4. The form of consumer contracts concluded in cases provided for in paragraph 1 of Article

1.39 of this Code shall be governed by the law of the place of the consumer’s domicile.

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Article 1.39. Particularities of application of foreign law to consumer contracts

1. A consumer contract for the purposes of this Article as well as other Articles of this Code

shall be a contract on the acquisition of goods or services concluded between a natural person

(consumer) and a person who sells such goods or services (supplier) for the purposes not related

with the consumer’s commercial or professional activities, i.e. for the satisfaction of the consumer’s

personal, family or household needs.

2. The right of the contracting parties established in paragraph 1 of Article 1.37 of this Code

to make a choice of the law applicable to a contractual obligation shall not result in depriving or

restricting the consumer of the right to protect his interests by the remedies determined by the

provisions of the law of the state of his domicile if:

1) the formation of the contract in the state of his domicile was preceded by a special offer or

by advertising in that country;

2) the consumer was induced by the other contracting party to travel to a foreign state for the

purpose of forming the contract;

3) the order was received by the other party or his agent from the consumer in the state of the

latter’s domicile.

3. If the parties to a consumer contract have not made a choice of the applicable law, the law

of the state in which the consumer is domiciled shall apply.

4. The provisions of this Article shall not apply to contracts for carriage, contracts for the

supply of services where the services are to be supplied to the consumer exclusively in a country

other than the Republic of Lithuania.

Article 1.40. Laws applicable to the form, time-limit of validity and content of a power of

attorney

The form of a power of attorney shall be governed by the law of the state in the territory of

which it is issued. The time-limit of validity of a power of attorney, where it is not indicated in the

document itself, the powers (rights and obligations) of the agent, the bilateral liability of the

principal and the agent, and their liability in respect of third persons shall be governed by the law of

the state in which the agent acts.

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Article 1.41. Law applicable to gift

1. Gifts shall be governed by the law of the state of the donor’s domicile or his business

activities with the exception of contracts upon gifting of an immovable thing, as such contracts shall

be governed by the law of the state where that immovable thing is located.

2. A gift cannot be declared invalid as to its form if the form corresponds to the requirements

of the law of the state in which the act of gift was performed, or of the law of the state of the donor’s

domicile or his place of business activities.

Article 1.42 Law applicable to the assignment of a claim and the assumption of debt

1. Relations connected with the assignability of a claim and the assumption of a debt shall be

governed by the law chosen by the parties upon agreement.

2. The choice of law made by the parties in the assignment of a claim may not be applied

against the debtor without his consent to the application of the chosen law.

3. In the event of the parties not having made a choice of the applicable law, relations

connected with the assignability of a claim and the assumption of a debt shall be regulated by the

law governing the principal obligation, the claim arising from which (the debt) is to be assigned

(assumed).

4. The form of the assignment of a claim or the assumption of a debt shall be governed by

the law applicable to the contract of assignment or assumption.

SECTION SIX

LAW APPLICABLE TO DELICTUAL OBLIGATIONS

Article 1.43. Law applicable to delictual obligations

1. Rights and obligations of the parties resulting from tort shall be governed, at the choice of

the aggrieved party, either by the law of the state where the tortious act was committed or any other

tortious circumstances occurred, or by the law of the state in which the damage occurred.

2. Where it is impossible to determine the place where the act was committed or other

circumstances occurred, or the state in which the damage appeared, the law of the state most closely

connected with the case upon reparation for damage shall apply.

3. After the incurrence of damage, the parties may agree that the law applicable to the

reparation for damage shall be the law of the state where the case concerned is being heard.

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4. If both parties are domiciled in the same state, the law of that state shall be applicable to

the reparation for damage.

5. An obligation to make reparation for damage caused by defective products shall be

governed by the law of the state where the damage was incurred if the aggrieved person is

domiciled in the same state, or it is the place of business of the person liable for the damage, or the

products of inferior quality were acquired there by the aggrieved person. If the state of domicile of

the aggrieved person coincides with the state of the place of business of the person liable for the

damage caused, or with the state in which the defective product was acquired, the law of the state of

the aggrieved person’s domicile shall apply. Where it is impossible to determine the applicable law

in accordance with the criteria indicated in this paragraph, the law of the state where the business of

the person liable for the damage is located shall apply, except in cases when the claim of the

plaintiff is based on the law of the state in which the damage was made.

6. Terms of civil liability, its extent, the person liable and the terms of release from civil

liability shall be governed by the law applicable to the obligations resulting from the delictual

obligations.

Article 1.44. Law applicable to claims resulting from a traffic accident

Claims resulting from a traffic accident shall be governed by the Hague Convention of 4

May 1971 on the Law Applicable to Traffic Accidents.

Article 1.45. Law applicable to claims resulting from infringement of personal non-property

rights

1. Claims for reparation of damage resulting from infringement of personal non-property

rights committed by the mass media shall be governed, depending on the choice of the aggrieved

person, by the law of the state where the aggrieved person is domiciled, or has his place of business,

or where the infringement occurred, or by the law of the state where the person who caused the

damage is domiciled or has his place of business.

2. Response to the media (denial) shall be governed by the law of the state in which the

publication appeared, or the radio or television program was broadcast.

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Article 1.46. Law applicable to claims for reparation of damage resulting from an act of unfair

competition

Claims for reparation of damage resulting from an act of unfair competition shall be

governed by the law of the state in whose market the negative effects of unfair competition

occurred. If the act of unfair competition has affected exclusively the interests of an individual

person, the applicable law shall be that of the state where the place of business of the aggrieved

person is located.

Article 1.47. Plurality of debtors

If damage is caused by several persons, the applicable law shall be determined for each of

them in accordance with the provisions of Article 1.43 of this Code.

SECTION SEVEN

LAW APPLICABLE TO REAL RIGHTS

Article 1.48. Law applicable to ownership legal relations

1. The ownership right and other real rights in an immovable and movable thing shall be

governed by the law of the state where the thing was situated at the moment of change of its legal

status. Acknowledgement of a thing to be movable or immovable shall be governed by the law of

the state in which the relevant thing is located.

2. Official registration of the ownership right and other real rights shall be governed by the

law of the state where the thing is located at the time of its registration.

3. The ownership right and other real rights in a thing in transit (cargo) shall be governed by

the law of the state of destination of this thing.

4. The ownership right to an immovable thing resulting from acquisitive prescription shall be

governed by the law of the state where the thing is located.

Article 1.49. The right of the parties to choose the law applicable to a movable thing

1. The parties may choose upon their agreement the law of the state of dispatch or the state

of destination of the thing, or the law regulating the underlying legal transaction as the law

applicable to the arisal and termination of the rights to the movable property.

2. The choice of the applicable law may not affect the rights of third persons.

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Article 1.50. Law applicable to encumbrance of the right in a movable thing

1.Where a movable thing over which encumbrance of right was validly established abroad is

imported into the Republic of Lithuania, that encumbrance shall be acknowledged to be likewise

valid in the Republic of Lithuania.

2. Retention of title over a movable thing validly established abroad shall remain valid after

that thing has been transported into the Republic of Lithuania, though such retention may not affect

the rights of third persons in good faith.

3. Retention of title over a movable thing in transit shall be governed by the law of the state

of its place of destination.

Article 1.51. Law applicable to pledge

1. The pledge of rights, securities and claims shall be governed by the law chosen by the

parties, though the choice of law may not affect the rights of third persons.

2. In the absence of the parties’ choice of law, the pledge of claims and securities shall be

governed by the law of the state where the place of domicile or business of the secured creditor is

located; the pledge of other rights shall be governed by the law applicable to such rights.

SECTION EIGHT

LAW APPLICABLE TO INTELLECTUAL PROPERTY RIGHTS

Article 1.52. Law applicable to contracts related to intellectual property rights

1. In the absence of the parties’ choice of applicable law (Article 1.37 of this Code),

contracts related to intellectual property rights shall be governed by the law of the state where the

party transferring the intellectual property rights or granting the use thereof has his domicile or the

place of business.

2. Contracts between an employer and an employee regarding the rights to intellectual

property created by the employee in the course of his employment shall be governed by the law

applicable to employment contracts.

Article 1.53. Intellectual property rights and the law applicable to their protection

1. Intellectual property rights and their protection shall be governed by the law of the state

where the protection of the intellectual property rights is sought.

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2. In the event of infringement of intellectual property rights, the parties may agree after the

occurrence of the damage that the applicable law shall be the law of the state where the court

hearing the case concerned is located.

SECTION NINE

LAW APPLICABLE TO OTHER OBLIGATIONS

Article 1.54. Law applicable to obligations arising from the reception of a thing not due, or

unjust enrichment

1. Claims resulting from an obligation performed without any legal grounds for such

performance shall be governed by the law of the state pursuant to the laws of which the legal

sources for the obligation are determinable.

2. Claims related with unjust enrichment resulting from unlawful actions shall be governed

by the law of the state where such unlawful actions were performed.

3. Where reception of a thing not due or unjust enrichment occurs from the existing legal

relationship between the parties, the law determining that legal relationship shall apply.

Article 1.55. Law applicable to unilateral transactions

Unilateral transactions shall be governed by the law of the state where they were formed.

Article 1.56. Law applicable to securities

1. Cheques and bills of exchange shall be governed by the provisions set forth in the Geneva

Convention of March 19, 1931 on Conflicts of Law in Matters of Bank Cheques and the Geneva

Convention of June 7, 1930 on Conflicts of Law in Matters Involving Bills of Exchange and

Promissory Notes.

2. Other securities shall be governed by the law of the state where they are issued (drawn).

Article 1.57. Law applicable to the currency in which payments are to be made

1. Currency in which payments are to be made shall be determined by the law of the state

where the payment must be made, unless the parties have chosen upon their agreement the currency

in which the payments are to be made.

2. In all other cases, currency shall be regulated by the law of the state which issued the

currency.

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Article 1.58. Law applicable to obligations deriving from other grounds

Obligations deriving from management of affairs of another, likewise obligations deriving

from other grounds not specified in this Chapter shall be governed by the law of the state where the

grounds for the obligation occurred.

Article 1.59. Law applicable to prescription

Prescription shall be governed by the law applicable in determining the rights and

obligations of the participants in the relevant civil legal relationship.

SECTION TEN

LAW APPLICABLE TO LEGAL RELATIONS OF SUCCESSION

Article 1.60. Capacity to make a will

The capacity of making, amending or revoking a will shall be governed by the law of the

state of the testator’s domicile. Where a person has no domicile or it is impossible to be determined,

the capacity of such person to make a will shall be governed by the law of the state were the will is

made.

Article 1.61. Form of a will

1. The form of a will, its amendment or revocation shall be governed by the law of the state

where these acts are performed.

2. A will as well as its amendment or revocation shall also be valid in regard of the form if

the form of the indicated acts is in compliance with the requirements of the law of the state of the

testator’s domicile, or those of the laws of the state whose citizen the testator was at the time when

the relevant acts were performed, or the law of the state of the testator’s residence at the time when

those acts were performed or at the time of his death. A will in respect of an immovable thing, as

well as any amendment or revocation thereof shall be valid if the form of the acts concerned is in

compliance with the requirements of the law of the state where the immovable thing is located.

Article 1.62. Law applicable to other legal relations of succession

1. Other legal relationships of succession, with the exception of those related with

inheritance of immovable things, shall be governed by the law of the state of domicile of the testator

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at the time of his death. Relations of succession in respect of an immovable thing shall be governed

by the law of the state where the immovable thing is located.

2. Where succession opens by the death of a citizen of the Republic of Lithuania, irrespective

of the law applicable, his heirs residing in the Republic of Lithuania and in possession of the right to

the mandatory share of succession shall inherit this part in accordance with the law of the Republic

of Lithuania, except the immovable things.

3. Where in accordance with the law applicable to relations of succession a property cannot

devolve to a foreign state, and where no other heir thereto is known and the property is located in

Lithuania, that property shall be devolved to the ownership of the Republic of Lithuania.

PART II

TRANSACTIONS

CHAPTER III

CONCEPT AND FORM OF TRANSACTIONS

Article 1.63. Concept and types of transactions

1. Transactions are the actions of persons intended to create, modify or extinguish civil rights

and duties.

2. Transactions may be unilateral, bilateral or multilateral.

3. A transaction shall be considered to be unilateral where the expression of the will of one

party is a necessary and sufficient condition for its formation.

4. A unilateral transaction shall impose obligations exclusively on the person who forms it.

Obligations on any other persons shall be imposed by a unilateral transaction only in the cases

established by laws or by an agreement between the persons concerned.

5. Legal norms which regulate obligations and contracts shall apply to unilateral transactions

to the extent that this does not prejudice laws and the essence of the unilateral transaction.

6. A transaction shall be considered to be bilateral where the concerted will of two parties is

a necessary condition for its formation.

7. A transaction shall be considered to be multilateral where the concerted will of three or

more parties is a necessary condition for its formation.

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Article 1.64. Form of the expression of will

1. The free will of a person who enters into a transaction may be expressed verbally, in

writing, by action or in any other manner of expressing will.

2. The will of a person may be implied subject to the special circumstances under which the

transaction is formed.

3. Silence may be deemed to be an expression of will exclusively in the cases established by

laws or agreed upon by the parties to the transaction.

Article 1.65. Expression of will by means of public notice

1. In the cases established by laws or a contract, a person – the declarant – may express his

will by means of a public notice (public authorization, public annulment of authorization, etc.) in

accordance with the procedure established by this Article.

2. A public notice shall be published in a newspaper that is issued in the last known place of

residence or business either of the other party to the transaction or that of the declarant of will, also

in the major dailies of the Republic of Lithuania in accordance with the procedure established by the

Code of Civil Procedure in respect of the service of public notice of court summons. The court may,

if necessary, establish any other procedure for the expression of a person’s will by means of public

notice.

3. A declaration of will by public notice shall be presumed to have become known to the

other party upon the lapse of 14 days counting from the date of the last public declaration. However,

this presumption shall not apply if the person who declared his will by public notice failed to

perform every possible action available to him for the ascertainment of the place of residence or

business of the other party to the transaction.

4. A public declaration of will shall be published at the expense of the declarant of the will.

Article 1.66. Conditional transaction

1. A transaction may render the appearance, modification or extinguishment of rights and

duties dependent upon the fulfillment or non-fulfillment of certain conditions.

2. A transaction shall be deemed to be concluded with a suspensive condition if the arising of

rights and duties therefrom is conditioned by the parties upon an uncertain event.

3. A transaction shall be deemed to be concluded with a resolutory condition if the

extinguishment of rights and duties arising therefrom is conditioned by the parties upon an uncertain

event.

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4. A transaction shall be null and void if the arising, modification or extinguishment of rights

and duties is conditioned by the parties upon the fulfillment of an unlawful condition or a condition

incompatible with the public order or good morals, or upon the performance of unlawful actions.

Article 1.67. Consequences of an unfair hindering or assistance in the appearance of a

condition

1. Where the appearance of a condition is unfairly hindered by a party to whom the condition

is disadvantageous, this condition shall be considered as having existed.

2. Where the appearance of a condition is unfairly facilitated by a party to whom the

condition is advantageous, this condition shall be considered as not having existed.

Article 1.68. Other consequences of a conditional transaction

1. If a condition had already been fulfilled at the time when the transaction was formed,

such transaction shall be unconditional in the case of a suspensive condition, and null and void

in the case of a resolutory condition.

2. If non-fulfillment of the conditions was already certain at the time when the

transaction was formed, such transaction shall be unconditional in the case of a suspensive

condition, and null and void in the case of a resolutory condition.

3. A transaction subject to a suspensive condition which is impossible objectively shall

be null and void; a transaction subject to a resolutory condition which is objectively impossible

shall be unconditional.

4. A transaction subject to a suspensive condition shall be null and void if the condition

is dependent solely upon the will of the debtor.

Article 1.69. Place of transaction forming

1. A unilateral transaction shall be deemed to have been formed in the place where the will

of a party to the transaction is expressed (the place where an authorization is given or a will (a

testament) is made, etc.)

2. A bilateral or multilateral transaction shall be deemed to have been formed in the place of

residence or business of the offeror, unless laws or agreement of the parties provide for otherwise.

3. Where the receipt of the notice of acceptance by the offeror is not a necessary condition

for the formation of a transaction, such transaction shall be deemed to have been formed in the place

27

of residence or business of the acceptor, or the place in which the factual actions of the acceptor

were performed.

Article 1.70. Procedure of forming transactions

1. Natural persons may form transactions themselves or through their agents. It shall not be

allowed to enter into transaction through an agent if, dependent on the nature of the transaction, it

may be formed only by the natural person himself; the same stands for any other transactions

determined by laws.

2. Transactions on behalf of legal persons shall be formed by the bodies or agents indicated

in their incorporation documents.

Article 1.71. Form of transactions

1. Transactions shall be made in writing (in the ordinary or notarial form) or their formation

may be implied from the actions.

2. A transaction, in respect of which there is no specific form established by laws, shall be

deemed to have been formed if the person demonstrates by his behaviour the will to form a

transaction (a contract formed by actions).

Article 1.72. Verbal form of transactions

1. Where the written form is not required by laws or by an agreement of the parties as a

necessary condition for the forming of a transaction, the transaction may be formed verbally.

2. Transactions resulting from the performance of a written contract may be formed verbally

if this does not contradict laws or the contract.

Article 1.73. Written form of transactions

1.The following shall be made in the ordinary written form:

1. transactions made by natural persons in the event where at the moment of their

formation the value of the property upon which the transaction is made exceeds five thousand

Litas, except such transactions which are performed at the time of their formation;

2. transactions on the foundation of legal persons;

3. contracts of purchase and sale of goods by instalments;

4. insurance contracts;

5. arbitration agreements;

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6. contracts of lease of a movable thing for a term of over one year;

7. preliminary contracts;

8. contracts of life annuity (contracts of rent);

9. compromise agreements;

10. other transactions whose mandatory ordinary written form is provided for by this

Code or other laws.

2. Written transactions shall be made either by drawing up one document signed by all the

parties or by the parties exchanging separate documents. Documents signed by the parties and

transmitted by means of telegraph, facsimile communication or over any other means of

communication terminal equipment shall be conferred the same power as having been made in the

written form, providing the protection of the text is guaranteed and the signature can be identified.

3. The parties may agree to adopt additional requirements for the written form of the

transaction (signatures of certain persons, affixation of a stamp on the document, assignment of a

special form for the document, etc.) and establish the legal effects for non-compliance with such

requirements. In the event of the parties failing to comply with the established requirements, the

transaction shall not be considered formed, unless the parties agree otherwise.

Article 1.74. Notarised transactions

1.The following transactions shall be drawn up in the notarial form:

1) transactions on the transfer of the real rights in an immovable thing and transactions on

the encumbrance of the real rights and of the immovable thing;

2) contracts of marriage (pre-nuptial and post-nuptial);

3) other transactions which are to be notarised in accordance with the mandatory provisions

of this Code.

Article 1.75. Legal registration of transactions

1. The law may establish mandatory legal registration of certain transactions. A transaction

shall produce its effects between the parties even if it is not registered in the mandatory order. In

such instances, the rights and duties of the parties produce their effects between them not from the

moment of registration of the transaction but from the moment established by the law or agreement

of the parties, except in cases where it is expressly determined by this Code that the rights and duties

of the parties shall arise only from the moment of registration of the transaction concerned.

29

2. The parties to an unregistered transaction may not invoke the fact of transaction against

third persons and argue their rights against third persons by relying on other means of proof.

3. If the same real rights or the same thing is acquired by several acquirers but only one of

them registers that transaction, it shall be considered that the acquirer who has registered the

transaction is vested with that thing or with the real rights in that thing. If none of the acquirers

registers the transaction, it shall be considered that the acquirer who is the first to form that

transaction is vested with the rights indicated above.

4. If several persons register their property rights or real rights in the same thing, the person

who is the first to register that transaction shall be vested with these rights.

5. Damage caused to persons by unlawful acts of the officials of state institutions or other

organisations effectuating mandatory legal registration of transactions shall be compensated by the

state.

Article 1.76. Signing of transactions formed in writing

1. Transactions drawn up in writing must be signed by the contracting parties. Where a

natural person, due to physical defect, illness or any other reason, cannot sign it himself, he may

authorize another person to sign on his behalf. The signature of the latter must be witnessed by a

notary; or the head or a deputy head of the enterprise, institution or organisation where the person

concerned is employed or studies; or by the head physician or a deputy head physician of the in-

patient medical institution where the person concerned undergoes treatment; or by the commander

of the military unit or a deputy commander thereof if the transaction is made by a soldier; or by the

master of a ship during the period of a long voyage; in addition, the reason for which the person

entering into the transaction is unable to sign it himself must be indicated.

2. Where the transaction is made by employing telecommunication terminal equipment, in

all cases there must be sufficient data for the ascertainment of the parties to the transaction. In the

event of absence of such data, the parties, if a dispute arises, may not rely upon witnesses to prove

the fact of transaction forming.

Article 1.77. Formation of transactions in the form other than established by the law

1. Transactions which are permitted by laws to be formed verbally, may also be made in the

written or notarial form.

2. Transactions, the ordinary written form for which is mandatory, may also be formed in the

notarial form.

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CHAPTER IV

VOIDABILITY OF TRANSACTIONS

Article 1.78. Null and voidable transactions

1. If the nature of nullity is clearly indicated in the law, a transaction shall be presumed to be

null, irrespective of the fact of existence of a court judgement upon its nullity. The parties may not

ratify a transaction which is null and void.

2. Any transaction for the declaration of voidability of which a court judgement is necessary,

shall be a voidable one.

3. A transaction may be deemed to be null and void only on the grounds established by laws.

4. An action for the voidability of a voidable transaction may be invoked only by the persons

indicated in the laws.

5. A claim to apply the legal effects arising from a transaction that is null and void may be

invoked by any interested person. Legal effects of a null and void transaction, also the fact of its

nullity shall be stated by the court ex officio (on its own motion).

Article 1.79. Ratification of a voidable transaction

1. A party possessing the right to invoke voidability of a transaction may ratify it within the

time-limit established by the other party or the laws. After ratifying the transaction, the party forfeits

his right to claim for voidability of that transaction.

2. It shall be presumed that a transaction is ratified by the party if, after it became possible to

be ratified or disputed by that party, any of the following events have taken place:

1) the transaction has been performed partly or in whole;

2) a demand has been made against the other party for the performance of the transaction;

3) a security for the performance of the obligation subject to ratification has been granted to

the other party;

4) the rights acquired according to that transaction have been transferred to another person

partly or in whole.

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Article 1.80. Nullity of a transaction that does not correspond to the requirements of

mandatory statutory provisions

1. Any transaction that fails to meet the requirements of mandatory statutory provisions shall

be null and void.

2. When a transaction is null and void, each party shall be bound to restore to the other party

everything he has received according to that transaction (restitution), and where it is impossible to

restore in kind the received, the parties are bound to compensate the received to each other in

money, unless the laws provide for other consequences of voidness of the transaction.

3. The rules of restitution are established by Book Six of this Code.

4. The property – object of the transaction that is annulled – may not be claimed from the

third person in good faith, except in cases provided for in paragraphs 1, 2 and 3 of Article 4.96 of

this Code.

Article 1.81. Nullity of a transaction contradicting public order and good morals

1. A transaction that is contrary to public order or norms of good morals shall be null and

void.

2. If a transaction is annulled on the grounds established in paragraph 1 of this Article, the

rules provided for in paragraph 2 of Article 1.80 of this Code shall not apply if both parties knew or

should have known the transaction to be contrary to public order or good morals.

3. Unilateral or bilateral restitution may take place where its application is not contrary to the

mandatory statutory provisions or good morals, i.e. where the purpose of the transaction

contradicting public order or norms of good morals was not achieved, and the provisions of public

law do not establish any property sanctions in regard to the parties to such transaction.

Article 1.82.Voidability of a transaction contradicting the legal passive capacity of a legal

person by whom the transaction was formed

1.Transactions made by the governing bodies of a private legal person in breach of the

competence conferred on them by their incorporation documents or contradicting the goals of that

legal person may be declared void only in the cases where it is proved that the other party acted in

bad faith, i.e. he knew or should have known that the transaction was contrary to the goals of the

legal person concerned. In such cases, the fact of announcement of the incorporation documents of

the legal person concerned shall not be a sufficient proof of the other party’s bad faith, therefore the

32

legal person shall be bound to prove that the other party deliberately acted in bad faith (Article 2.74

and Articles from 2.83 to 2.85 of this Code).

2. Transactions formed by public legal persons that are contrary to the goals of their

activities may be declared void.

3. An action for the declaration of voidness on the grounds established by this Article may be

brought by the legal person, the founder (founders) or a participant (participants) thereof. The laws

may also specify other persons entitled to bring such an action, or special requirements which have

to be met by the persons bringing such an action (e.g., holding of a certain number of shares

(deciding votes))

4. Transactions indicated above shall be governed by the rules prescribed in paragraph 2 of

Article 1.80 of this Code.

Article 1.83. Legal effects of a transaction formed on behalf of a legal person that is not

registered within the procedure established by laws or has no licence to be engaged in the

activities that are prohibited without a licence

1. Where a transaction is made on behalf of a legal person that is not registered within the

procedure established by laws, the natural person by whom such a transaction is made acquires the

rights and assumes the duties arising from that transaction, providing there are no other grounds for

declaring such transaction void.

2. Where transactions are made on behalf of a legal person prior to its registration, the

persons by whom these transactions are made shall be solidary liable, unless the legal person, after it

is registered, assumes the obligations resulting from those transactions (Article 2.61 of this Code).

Article 1.84. Voidability of a transaction formed by a natural incapable person

1. A transaction shall be voidable if formed by a minor under fourteen years of age, except in

cases where the minor, within the limits imposed by his age and in accordance with this Code and

other laws of the Republic of Lithuania, may enter into transactions alone to satisfy his ordinary and

usual needs.

2. A transaction is likewise voidable if it is made by a natural person who within the

procedure established by laws is recognised as legally incapable by reason of mental disease or

imbecility.

3. In the cases established in paragraphs 1 and 2 of this Article, besides the consequences

provided for in paragraph 2 of Article 1.80 of this Code, the legally capable party shall be obliged to

33

compensate the expenses suffered by the other party, also any damage to the latter’s property or loss

thereof if the capable party knew or should have known about the incapacity of that other party.

4. The voidness of such transaction may be invoked by statutory representatives of the

incapable person, also a public prosecutor. A transaction, if it is beneficial to the incapable person,

may be ratified by the statutory representative of the latter in accordance with the procedure

established by laws.

Article 1.85. Voidability of a transaction made by a natural person who overindulges in strong

drinks or narcotic substances

1. A transaction upon the transfer of property or a real right that is formed by a natural

person whose legal active capacity is limited by reason of overindulgence in strong drinks or

narcotic substances and without the consent of a curator, except small transactions to meet his

ordinary and usual needs, can be declared voidable within the judicial procedure on the action of the

curator or a prosecutor.

2. If a transaction indicated in the preceding paragraph of this Article is declared voidable,

the provisions of paragraph 3 of Article 1.84 of this Code shall apply.

3. After a transaction has been formed, a curator may ratify the transaction formed by the

protected person alone during the period of his limited capacity for which he required to be

represented if such transaction is beneficial to the person with limited capacity.

Article 1.86. Nullity of a fictitious transaction

1. A transaction made for the sake of appearance without intention to create legal effects

shall not produce its effects between the parties and shall be null and void.

2. The provisions established in paragraph 2 of Article 1.80 of this Code shall apply to the

transactions specified above.

Article 1.87. Nullity of a simulated transaction

1. If a transaction is formed to cover up another transaction, i.e. if the parties’ intent to make

a transaction is different from the simulated transaction, the rules applicable to the intended

transaction shall apply.

2. If the rights or lawful interests of third persons are violated by a simulated transaction, the

third persons in defence of their rights shall be able to plead simulation against the parties of the

simulated transaction.

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3. A simulated transaction cannot be used as a defence by the contracting parties against

third persons who in good faith have acquired rights from the simulated transaction.

Article 1.88. Declaring voidable a transaction made by a minor from fourteen to eighteen

years of age

1. A transaction made by a minor from fourteen to eighteen years of age, where the law does

not allow him to act without the consent of his parents or curators, may be declared void within the

judicial procedure on the action of such minor’s parents or curators, with the exception of

transactions into which the minor may, within the limits imposed by his age, enter alone in

accordance with this Code and other laws of the Republic of Lithuania.

2. If a transaction specified in paragraph 1 of this Article is declared void, the rules

prescribed in paragraph 3 of Article 1.84 of this Code shall apply.

3. Statutory representatives of a minor can ratify a voidable transaction made without a

proper consent, by giving their consent after the transaction has been formed, if such transaction is

beneficial to the minor concerned.

Article 1.89. Declaring voidable a transaction formed by a natural person who was unable to

understand the meaning of his own actions

1. A transaction formed by a capable natural person may be annulled within the judicial

procedure on the action of the natural person concerned if, by reason of his state at the moment of

the transaction forming, he was unable to comprehend the meaning of his acts or to control them.

2. Where the transaction specified in paragraph 1 of this Article is declared void, besides the

consequences established in paragraph 2 of Article 1.80 of this Code, the following additional

consequences arise: the other party shall be bound to compensate to the party who at the moment of

the transaction forming was unable to comprehend his own actions or to control them the expenses

suffered, also any damage to his property or loss thereof, if this another party was aware or should

have been aware of the state of the first contracting party.

Article 1.90. Declaring voidable a transaction formed under the influence of a mistake

1. A transaction resulting from the consent given by an essential mistake may be declared

void within the judicial procedure on the person’s whose consent is vitiated action for its voidness.

2. A mistake is an erroneous assumption of the essential facts of the transaction that existed

at the moment of the transaction forming.

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3. In the event of annulment of a transaction formed under the influence of an essential

mistake, the provisions established in paragraph 2 of Article 1.80 of this Code shall apply. The party

upon whose action the transaction is declared void may, in addition to the annulment, also claim

from the other party compensation for the expenses incurred or the damage to his property or loss

thereof if this party proves that the mistake was caused by the fault of the other party. Where it is not

proved, the party on whose action the transaction is declared void shall be bound to compensate to

the other party the expenses incurred as well as the damage to his property or loss thereof.

4. A mistake is essential where the error relates to the nature, object or any other essential

conditions of the contract itself, or the civil legal status of the other contracting party or any other

circumstances, and where a person of normal diligence and attentiveness would not have made the

transaction in a similar situation or would have made it on essentially different terms if he had

known the real state of events. A mistake is likewise essential if both contracting parties are

mistaken, or an error of one party induced the other party to err without the former’s intention to

deceive, or if one party was aware or should have been aware of the mistake committed by the other

party and the requirement addressed to the mistaken party to perform the transaction would

contradict to the principles of good faith, justice and reasonableness.

5. A mistake may not be considered essential if caused by gross negligence of the mistaken

party, or induced by circumstances the risk of which was taken by the party upon himself or if,

taking into account the concrete circumstances, the risk of mistake falls on that party in particular.

6. A mistake resulting from the expression or transmission of a party’s will shall be deemed

to be a mistake committed by that party himself.

7. The mistaken party cannot claim for the annulment of a contract where his rights and

interests may be adequately protected by invoking other remedies.

Article 1.91. Voidability of a transaction made by a party whose consent was obtained by

fraud, extorted by duress, economic pressure or induced by real threatening, likewise of a

transaction made by the malicious agreement of a agent of one party with the other party, or a

transaction entered into because of abusive circumstances

1. A transaction may be declared voidable by a court on the action of the aggrieved party if it

was entered into due to fraud, duress, economic pressure or real threatening, or if it was formed by a

malicious agreement of the agent of one party with the other party, likewise if, by entering into the

transaction by reason of abusive circumstances, one party assumes obligations under unfair

conditions.

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2. Where the voidability of a transaction is based on any of the grounds specified in

paragraph 1 of this Article, the other party shall be bound to restore to the aggrieved party

everything he has received according to that transaction, and where it is impossible to restore (in

kind), it must be compensated in money. In addition, the guilty party shall be bound to compensate

to the aggrieved person all the expenses incurred.

3. Where a transaction is declared voidable by reason of fraud, violence, economic pressure,

real threatening or malicious agreement made between the agent of one party and the other party, the

aggrieved party may, in addition to remedies provided for in the preceding paragraph of this Article,

claim non-pecuniary damage caused by the actions indicated.

4. For the purposes of this Article, the notion “real threatening” means unjustifiable or

unlawful actions of the other party or a third person directed towards the person, property or

reputation of the other contracting party, or that of his parents, children, spouse, grandparents,

grandchildren or any other close relatives; the threatening actions must be of such nature as to

impress a reasonable person and to cause him fear that the person, property or reputation of the

persons concerned may be exposed to damage and there is no other reasonable alternative except to

enter into the transaction. Threatening shall also be deemed to be real where one party or a third

person threatens to enforce measures of economic pressure against the other contracting party that is

economically weaker or is in essence economically dependent in order to compel him to form a

transaction under exceptionally economically disadvantageous conditions. In determining the

occurrence of real threatening, the court shall take into account the age, economic and financial

position, and the gender of the party towards whom the threat was directed, the nature of the threat,

and any other conditions significant for the case.

5. In addition to the forms specified in the preceding paragraph of this Article, fraud may

result from the silence of a party, i.e. from concealment of such circumstances being aware of which

the other contracting party would not have formed the transaction and which, within the principles

of reasonableness, justice and good faith, had to be disclosed to the other party; fraud may also

result from active actions by which it is desired to mislead the other contracting party concerning the

effect of the transaction, essential terms thereof, civil legal capacity of the person who enters into

the transaction, and any other essential circumstances.

6. If a third person, but not the other party to the transaction is guilty of fraud, duress or

threatening, the transaction shall be declared voidable only in the cases where that other party was

aware or should have been aware of those facts.

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7. The fact of declaring voidable a transaction formed under the influence of fraud may not

be invoked against third persons in good faith, except in cases established by this Code.

Article 1.92. Voidability of a transaction formed by an agent outside the authority conferred

on him

A transaction made by a agent outside the limitations of the authority conferred on him by

laws or a contract, may be declared voidable upon the action of the principal, unless such transaction

is ratified by the principal (Article 2.133 of this Code).

Article 1.93. Voidability of a transaction resulting from the lack of requisites of its form

established by laws

1. A transaction not made in the form required by laws for this particular case shall be void

only in the case when such consequence is expressly indicated in the laws.

2. Where any dispute arises upon the fact of forming or performance of a transaction which

fails to meet the necessary requirements for its ordinary written form, the parties lose the right to use

testimony of witnesses as evidence to prove the facts indicated above; in the cases expressly

prescribed by the law, non-observance of the ordinary written form obligatory to a concrete kind of

transactions shall cause the nullity of such transaction.

3. Non-observance of the notarial form required by the law as a necessary condition of a

transaction shall result in the nullity of the transaction in any case.

4. Where one party in the whole or partly performs his obligations arising from a transaction

that must be notarized while the other party avoids the notarization thereof, the court may, on the

action of the