An obligation ended by a set-off

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora

In most common matters obligations end, if they have been carried out properly. If an obligation has not been carried out, it can also end by a set-off of a counter-claim. Basic requirements to its performance are defined in the Civil Code of the Republic Lithuania, while the practical aspects are more widely elaborated in the case law.

The Supreme Court of Lithuania has clarified that the set-off of a counter-claim must fulfill the following requirements:
1) the parties involved must share bilateral (two-way) rights and duties;
2) claims of the parties involved must be homogeneous (e.g., claims will be considered homogeneous if they both require a certain amount of money to be paid);
3) claims of the parties involved must be directed to each other and not to third parties;
4) both claims must be valid and implementable.

Another party’s consent to perform the set-off is not required, thus - seeking to avoid disputes - it is highly advisable first of all to evaluate if the claim fulfills the above-mentioned requirements.