Contracts are of great importance in regulating relationships, especially in the business community. In order to facilitate favorable conditions of entrepreneurship and out of respect for the will of the parties, a state attaches legal importance to these agreements and provides a more or less effective mechanism to protect contractual obligations.
For the most part parties step into contractual relations in a spirit of trust with their partners and expect that the contract will be successfully performed, which in turn will bring benefits. But what if your partners or employees have been poached, and as a result you find it harder to compete and even suffer damages? Can you defend your rights in court?
Solutions. This situation is usually referred to as interference with contract. It infringes both the general requirements for honest business practice and principles of fair competition. As a result, most countries with modern civil law, including Lithuania, provide remedies against such behavior. In Lithuania one can claim compensation and have such unfair actions suspended. Legal action is directed against a third party that lured away, or tried to lure away, a contracting party.
Preconditions. If a party to a contract suffers damage due to another party's behavior and decides to defend its rights in court, the court will have to ascertain certain findings in accordance with Lithuanian tort law.
First, the defendant's actions must be unfair 's i.e., the fact of poaching the plaintiff's contractual partners must be proved. According to the general delict rule imposed in article 6.263 of the Civil Code, such a luring away of a partner or employee is considered to be illegal.
There can be various forms of actions in practice, both explicit (e.g., open persuasion not to fulfill the contract) and implicit. For instance, in a ruling on April 25, 2005 the Supreme Court of Lithuania stated that poaching employees can take place both in open form, suggesting termination of an employment agreement, and in hidden form 's i.e., when an attractive offer is made, such as a low-interest loan, to the headhunted employee. In another case dated April 24, 2002 the Supreme Court awarded compensation since the defendant, the director of the plaintiff's company dismissed a majority of employees and soon after hired these employees in his own company.
It should be noted that it is difficult to prove a violation 's i.e., the actual luring. However, the Supreme Court enabled suits against poaching by indicating that just the fact of proposing to terminate an agreement is sufficient to prove illegal action, and the luring is judged by objective circumstances and not just subjective explanations of the former partners. Thus, a partner does not have to be lured away 's an attempt to do so is enough for legal action.
Second, it must be proved that damages were incurred as a result of the defendant's actions. If the real cause of pecuniary damages is other factors, like poor relationships or miscommunication of the parties, then they are not compensated.
Third, according to case law and jurisprudence, a claim can be settled only if the defendant was or should have been aware that he or she was violating the rights of the plaintiff 's i.e., was acting with intention.
Fourth, the exact amount of damages incurred 's costs and unearned revenue 's by the plaintiff must be proved.
Evidence must be provided. For instance, as a result of having his partner or employees lured away the plaintiff lost his main supplier or distributor, which in turn resulted in the reduction of the number of consumers.
If your partner starts negotiations with a third party, and it is likely that the contract with you will be terminated, civil action can be taken against the third party as well as against your dishonest partner. In such cases Lithuanian civil law provides a special remedy 's termination of contract because of an anticipatory repudiation (article 6.219 of the Civil Code). The termination can be followed by a recovery of damages.
Conclusion. In Lithuania a person can defend his or her rights by taking legal action against dishonest "interventionists," and the Supreme Court of Lithuania has taken a position that facilitates proof of actions.
Laurynas Didziulis is a lawyer at law firm Jurevicius, Balciunas & Bartkus, a member of Baltic Legal Solutions, a pan-Baltic integrated legal network of law firms including Teder Glikman & Partnerid in Estonia and Kronbergs & Cukste in Latvia, dedicated to providing a quality "one-stop shop" approach to clients' needs in the Baltics.