Contract law in Lithuania. General provisions

  • 2010-08-25
  • By Marius Matiukas, Associate lawyer

ECOVIS Miškinis, Kvainauskas ir partneriai advokat┼│ kontora

General provisions of the contract law in Lithuania are defined mainly by the Civil Code of the Republic of Lithuania. A contract is 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. Contracts shall be subject to the norms of the Civil Code that regulate bilateral and multilateral transactions.

The principle of freedom of contract defines that the parties are free to enter into contracts and determine their mutual rights and duties at their own discretion; the parties may also conclude other contracts that are not established by the Civil Code if this does not contradict laws. It is 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. The parties may form a contract which contains elements of contracts of several classes. Such contract shall be governed by norms regulating the separate classes of contracts, unless otherwise provided for by the agreement of the parties, or this contradicts the essence of the contract.

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. Where the conditions of a contract are established by a non-mandatory law rule, the parties may agree on non-application of these conditions, or they may agree on any other conditions. If the parties do not enter into such agreement, the conditions of the contract shall be determined in accordance with the non-mandatory norm.

Where some conditions of a contract are regulated neither by laws nor by agreement of 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. 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.

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