BOOK TWO

BOOK TWO CIVIL CODE OF THE REPUBLIC OF LITHUANIA 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. 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. 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. 4. 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”). 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). 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. 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. 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. 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. 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 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 founding 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. 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. 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 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. 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. 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 a 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’

1. 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. 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’
2. 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’
3. 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. 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; 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. 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. 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. 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. 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. 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. 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. 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 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. 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. 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 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 founding 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; 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. 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. 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. 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 founding 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 founding documents of the legal person concerned shall not be a sufficient proof of the other party’s bad faith, therefore the 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 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. 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. 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. 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. 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 party who has performed his obligations, declare such transaction valid. In such event, a subsequent notarization of the transaction is not required. 5. Where nullity of a transaction results from the lack of necessary requisites of its form as established by laws, the consequences provided for in paragraph 2 of Article 1.80 of this Code shall arise. 6. The provisions established in paragraph 2 of this Article may not be applied by a court if they contradict the principles of good faith, justice and reasonableness, in particular where: 1) there exists other written evidence, even though indirect, that proves the forming of the transaction; 2) written evidence to prove the fact of transaction forming has been lost not through the fault of the party; 3) taking into consideration the circumstances in which the transaction was formed, it was objectively impossible to form that transaction in writing; 4) taking into consideration the interrelations between the parties, the nature of the transaction, and other circumstances of importance to the proceedings, prohibition to invoke testimonies of witnesses would contradict to the principles of good faith, justice and reasonableness. Article 1.94. Legal effects of non-observance of the requirement to perform legal registration of a transaction Non-observance of the requirement established by laws to perform legal registration of a transaction shall not result in nullity of the unregistered transaction, except in the cases prescribed by this Code. Article 1.95. Time from which the effect of annulment arises 1. A transaction which has been annulled shall be deemed to be null and void ab initio (from the moment of its forming). 2. Where from the content of a transaction follows that it is impossible to declare such transaction void ab initio, it may be declared void only for the future, i.e. from the time when the judgement acquires the authority of the final judgement (res judicata). Article 1.96. Consequences of partial nullity of a transaction Partial nullity of a transaction shall not import the nullity of the entire transaction where it can be supposed that the contracting parties would have entered into that transaction even without the part affected by nullity having been included. Part III OBJECTS OF CIVIL RIGHTS Chapter V CONCEPT and kinds of objects of civil rights Article 1.97. Kinds of objects of civil rights 1. Objects of civil rights shall be things, money and securities, other property and property rights, results of intellectual activities, information, actions and results thereof, as well as any other material and non-material values. 2. Things and property the turnover of which is restricted may be considered to be objects of civil rights only in the cases established by laws. Things which are withdrawn from civil use or the turnover of which is restricted must be imperatively indicated in the laws. Otherwise, the civil turnover of things or property shall not be considered restricted. Article 1.98. Things as object of civil rights 1. Things as object of civil rights shall be divided into movables and immovables. 2. Land and other things which are connected with land and which cannot be moved from one place to another without change of their purpose and essential reduction of their value are immovables (buildings, equipment, perennial plants and other things which, according to their purpose and nature, are deemed to be immovable). 3. Ships and aircraft, the mandatory legal registration for which is established by laws, are also considered to be immovables. Any other property may also be attributed to immovables by the laws. 4. Things which can be moved from one place to another without a change of their purpose and considerable reduction of their value are considered to be movables, unless otherwise provided for by laws. Article 1.99. Kinds of things as objects of civil rights 1. Things as objects of civil rights shall be divided into things determined by their individual features and things determined by their specific properties. 2. Things also are divided into divisible and undivisible, consumptable and unconsumptable, principals and accessories. Article 1.100. Money 1. Money, as an object of civil rights, shall be bank-notes issued by the Bank of the Republic of Lithuania, coins and means in accounts, also bank-notes issued by other foreign states, Treasury notes, as well as coins and means in accounts, serving as lawful means of settlement. Article 1.101. Securities 1. A security, as an object of civil rights, is a document certifying the obligation of its issuer to the holder of this document. A security can confirm the right of the person in possession of the document (holder) to receive from the issuer interest, dividends, part of an enterprise upon its liquidation, or the funds lent to the issuer (shares, bonds, etc.); the right or duty to acquire or alienate for payment or gratuitously other securities (the right to sign, future transactions, options, convertible bonds, etc.); the right to some income or payment duty subsequent to a change of prices on the security market (index, etc.). A security is also a document by which a direct order is issued to a bank to pay a certain sum of money (cheques) or which certifies a duty to pay a certain sum of money to the person whose name is indicated in the document (bill of exchange); or which proves the right of ownership to merchandise (mercantile securities): likewise a document which certifies the right or duty to acquire or alienate mercantile securities (derivative mercantile securities). Uncertified securities are issued in the cases established by laws and indicated (consolidated) in a special security register. 2. The laws may also provide for other types of securities. For the purposes of protecting the rights of investors, as well as for supervising and regulating the capital market, the laws may provide for a different definition of securities (investment) to be employed in the laws which regulate these relationships. Unless provided for otherwise, the provisions of this Code and the definition of securities shall apply to investment (investment securities) if the documents certifying the investment possess the features specified in paragraphs 1 and 3 of this Article. 3. The right certified by a security may be alienated to another person only in that event if the security itself is alienated, unless otherwise provided for by the laws. Securities may be alienated in accordance with the laws, the ordinary practice or by custom freely and unrestrictedly. Securities shall be alienated by transfer, though it ought to be certified by means of making an inscription of transfer of the security – an endorsement. 4. Securities may be underlying or derivative. Underlying securities confirm their holders’ rights and duties specified in paragraph 1 of this Article, with the exception of the right or duty to acquire or alienate for payment or gratuitously other securities, as well as the right to receive certain income or an duty to pay a certain sum of money subsequent to a change of prices on the security market. The securities which certify these exclusive rights or duties are called derivative securities. 5. Securities are divided into registered, bearer or order securities. They also divided into monetary, investment and mercantile securities. 6. A monetary security grants the right to receive a certain sum of money indicated therein (cheque, bill of exchange, bond). 7. An investment security concedes the right to participate in the management of the enterprise, certifies possession of the enterprise capital and entitles to receive a part of its profits (shares and certificates of shares, etc.), except in cases provided for by laws. 8. A mercantile security grants the right of ownership of merchandise, also the right to receive merchandise (bill of lading, way-bill, etc.). 9. Securities must contain the requisites provided for by laws. The absence of obligatory requisites of a security shall render it null, except in cases established by laws. 10. Upon the issue of uncertified securities, where the laws do not provide for otherwise, it shall be presumed pursuant to this Code that the holder of the securities has entrusted the accountant with their keep upon the contract of deposit. The rights, obligations and liability of the keeper shall be determined in accordance with the provisions of Book Six of this Code applicable to the contract of deposit. Where accountancy is managed by several persons on different levels, it shall be presumed that the person who handles the accounts of the security owner has transferred the keep of the securities concerned to another person under the contract of deposit. Such securities shall be alienated by the relevant entries in the security register. Article 1.102. A share 1. A share is a security certifying the right of its holder (shareholder) to participate in the management of a stock company and, where the laws do not provide for otherwise, to receive a part of the stock company profits in the form of dividend and a part of the remaining property of the stock company in case of its liquidation, as well as certifying other rights established by laws. 2. Shares may be of the following classes: registered or bearer, ordinary or preference, certificates or uncertificated. Article 1.103. A bond A bond is a security certifying its holder’s right to receive from the person who issues the bond the nominal value of the bond, annual interest or any other equivalent, or other property rights within the time-limits prescribed in it. Article 1.104. A cheque A cheque, as a security, is an unconditional order drawn up in a certain manner that is addressed by the drawer to a bank to pay a certain sum in money to the holder of the cheque. Article 1.105. A bill of exchange 1. A bill of exchange, as a security, is an unconditional order in writing addressed by one drawer to another by which the first person pledges himself or entrusts another person to pay directly or indirectly a certain sum of money to the person whose name is indorsed therein. 2. A bill of exchange may be of two forms: an order bill (draft bill) or a single bill (sole bill). 3. By using an order bill (draft bill) its drawer entrusts another person to pay to the person whose name is indorsed in the bill the sum indicated therein. 4. By using a single bill (sole bill) its drawer pledges himself to pay the sum indicated therein. Article 1.106. A bill of lading 1. A bill of lading, as a security, is a document certifying the fact of conclusion of a contract and its holder’s right to receive from the carrier the goods specified therein (cargo) and the right to dispose of the goods (cargo) received. 2. A bill of lading may be bearer, order or straight. If a bill of lading is drawn up in several copies, after the shipment is delivered under any of the copies of the bill of lading presented first, the other copies thereof shall lose their legal power. Article 1.107. A bank certificate 1. A bank certificate is a written bank document containing a statement on the monetary contribution and granting the depositor the right to receive that contribution and interests subject to the time-limits stated therein. 2. A bank certificate may be inscribed, transferable or non-transferable. Article 1.108. A state debt obligation 1. A state debt obligation is a security payable to the bearer which certifies that its holder has lent a certain sum in money to the state and grants its holder the right to receive the sum indicated therein and interests established thereby during the period of the possession of this security. Article 1.109. A plot of land and other resources A land plot indicated in kind and registered within the procedure established by laws, also the indicated areas of the entrails of the earth, as well as waters, forests, objects of flora and fauna may be objects of civil rights. Article 1.110. Enterprises and other property complexes 1. An enterprise, as a complex of assets, property and non-property rights belonging to the person who is engaged in business (seeking profit), as well as debts and other duties thereof, may be the object of civil rights. An enterprise is considered to be an immovable thing. 2. A property complex, as the object of civil rights, is the totality of things joined by a common economic purpose. Article 1.111. Results of intellectual activities Works of science, literature and art, invention patents, industrial samples and other results of intellectual activities expressed in any objective form (manuscripts, technical drawings, models, etc.) shall be deemed to be objects of civil rights. Invention patents and other results of intellectual activity shall become objects of civil rights from the moment of their recognition as such made within the procedure established by laws. Article 1.112. Property rights 1. Real rights, rights arising from obligations, also rights arising from the results of intellectual activities shall be objects of civil rights. 2. Property rights may be transferred and inherited. Article 1.113. Actions and their results Various actions and their results (transportation of goods, repairing of things, services, etc.) shall be objects of civil rights. Article 1.114. Personal non-property rights and values 1. Personal non-property rights and values, i.e. name, life, health, inviolability of body, honour, dignity, the private life of an individual, the author’s name, professional reputation, business name, trade marks of goods (services) and other values with which the arising of certain legal effects is linked by the laws shall be objects protected by the Civil law. 2. Personal non-property rights may be transferred or inherited only in the cases established by laws or where this does not contradict the nature of these values and principles of good morals or is not restricted by laws. Article 1.115. Personal non-property rights 1. Objects protected by the Civil law are personal non-property rights, i.e. the rights that have no economic content and are inseparably related with their holder. 2. Personal non-property rights may be related with property rights, or they may not be related with the aforesaid rights. Article 1.116. Commercial (industrial) and professional secret 1. Information shall be considered to be a commercial (industrial) secret if a real or potential commercial value thereof manifests itself in what is not known to third persons and cannot be freely accessible because of the reasonable efforts of the owner of such information, or of any other person entrusted with that information by the owner, to preserve its confidentiality. The information that cannot be considered commercial (industrial) secret shall be determined by laws. 2. Forms of protecting the information containing a commercial (industrial) secret are established by this Code. 3. Persons who unlawfully acquire information considered to be a commercial (industrial) secret shall be bound to compensate for the damages caused. Workers who in breach of the labour contract disclose a commercial (industrial) secret, as well as a party of any other contract who in breach of that contract discloses a commercial secret shall also be bound to compensate damages resulting from the disclosure of the commercial (industrial) secret. In this event, the damages suffered by the holder of the secret include the investment expenses incurred for its creation, development and use, as well as the incomes of which he (the holder) has been deprived. Incomes received from unlawful use of a commercial (industrial) secret shall be considered unjust enrichment. 4. A person who discloses a commercial (industrial) secret may be released from liability if he proves that the disclosure of that secret is justified by the interests of public safety. 5. Information shall be considered to be a professional secret if, according to the laws or upon an agreement, it must be safeguarded by persons of certain professions (advocators, doctors, auditors, etc.). This information is received by the indicated persons in performance of their duties provided for by laws or contracts. The cases when the information received in exercise of professional rights and in performance of professional duties shall not be considered professional secret are established by laws. Damage resulting from unlawful disclosure of a professional secret shall be compensated upon general grounds established by this Code. Part IV TIME-LIMITS Chapter VI General provisions Article 1.117. Definition of a time-limit 1. A time-limit is a period of time determined by laws or a transaction or established by a judicial authority and fixed by a calendar date or by the termination of a period expressed in years, months, weeks, days or hours. 2. A time-limit may also be defined by indicating an event that must inevitably occur. 3. Time-limits may be restoratory, acquisitionary or resolutory. 4. A restoratory time-limit is a period which may be restored by the court after its expiration, providing it was exceeded due to substantial reasons. 5. An acquisitionary time-limit is a period after the expiration of which a certain civil right or duty is acquired. 6. A resolutory time-limit is a period after the expiration of which a certain civil right or duty expires. The resolutory time-limits may not be restored by a court or arbitration. Article 1.118. Commencement of a time-limit 1. The moment from which a time-limit begins shall be 0 hours 00 minutes of the next day that follows the calendar date or the event by which its beginning is defined, unless law provide for otherwise. 2. A fixed time-limit that is expressed in hours shall begin from the moment defined by laws or one or both parties. Article 1.119. Expiration of a time-limit expressed in years and months 1. A time-limit expressed in years shall expire at midnight on the corresponding day and month of the last year of the time-limit indicated as the dies ad quem (the day on which the time-limit expires). 2. A time-limit expressed in months shall expire at midnight on the corresponding day of the last month of the time-limit indicated as the dies ad quem. 3. In the event where in the time-limit expressed in years or months there is no corresponding day in the last month, the day of maturity shall be the last day of the relevant month. Article 1.120. Expiration of a time-limit expressed in weeks A time-limit expressed in weeks shall expire at midnight on the corresponding day of the week indicated as the dies ad quem. Article 1.121. Inclusion of official holidays and weekends 1. Official holidays and weekends shall be included when calculating a time limit. 2. In the event where the day on which a time-limit expires is a day of an official holiday or a weekend, the time-limit shall be extended to include the first working day thereafter. Article 1.122. Performance of actions on the dies ad quem 1. An action for the performance of which a time-limit is fixed shall have to be performed before midnight of the dies ad quem. Where an act has to be performed in an institution, it must be performed before the end of the normal office or business hours of that organisation on the dies ad quem. 2. Any applications and information in writing delivered to the post office or telegraph, or transmitted by other means of communication before midnight of the dies ad quem shall be considered to have been performed on time. Article 1.123. Legal significance of a time-limit 1. If arising of a duty is made dependent upon the expiration of a certain time-limit, the performance of the duty may not be demanded before the expiry of that time-limit. 2. If certain legal effects of a transaction are made dependent upon the maturity of a time-limit, a transaction or obligation shall terminate with the expiry of the time-limit. 3. It shall be presumed that a time-limit takes effect in favour of a debtor except in the cases where: 1) the debtor is put on bankruptcy proceedings; 2) the debtor destroys the security provided for the performance of an obligation; 3) the debtor fails to provide a security of performance of an obligation he was bound to provide. Chapter VII Prescription Article 1.124. Concept of prescription Prescription is a time period established by laws during which a person can defend his violated right by bringing an action. Article 1.125. Time limits of prescription 1. General prescription comprises a period of ten years. 2. In respect of concrete kinds of claims, abridged prescription shall be established by this Code and other laws of the Republic of Lithuania. 3. Abridged one-month prescription shall apply to claims arising from the results of tender. 4. Abridged three-month prescription shall apply in respect of claims for declaring voidable the decisions of the bodies of a legal person. 5. Abridged six-month prescription shall apply in respect of: 1) claims arising from the exaction of penalties; 2) claims arising from shortage in the goods sold. 6. Abridged six-month prescription shall apply with respect to claims arising from the relationships between communication enterprises and their clients regarding dispatches sent within the territory of Lithuania, or abridged one-month prescription when the dispatches were sent abroad. 7. Abridged one-year prescription shall be applied with respect to claims arising from the legal relationships of insurance. 8. Abridged three-year prescription shall be applied with respect to claims for the compensation of damage, including claims for the compensation of damage caused by defective production. 9. Abridged five-year prescription shall be applied with respect to claims for the recovery of interest and any other periodical payments. 10. Claims arising from defects of the work performed shall be prescribed in the abridged prescription established in Book Six of this Code. 11. Claims, arising from contracts for transportation of goods, passengers or baggage shall be prescribed in the abridged prescription established by the codes (laws) regulating separate types of transport. 12. Any agreement of the parties with an intention to modify legal regulation of prescription, i.e. to modify the time-limit and the calculation thereof, shall be prohibited. Article 1.126. Application of prescription 1. A claim to protect a violated right shall be accepted by the court irrespective of the expiry of prescription. 2. The expiration of prescription shall be effected by the court exclusively if invoked by a party to the dispute. 3. Prescription may not be renounced in advance. Article 1.127. Commencement of prescription 1. Prescription shall start its run from the day on which the right to bring an action may be enforced. The right to bring an action arises from the day on which a person becomes aware or should have become aware of the violation of his right. Exceptions to this rule shall be established by this Code and other laws of the Republic of Lithuania. 2. Where there is a time-limit established for the performance of an obligation, prescription of a claim arising from such obligation shall start its run upon the expiry of the time-limit allotted for the performance of that obligation. 3. Where a time-limit for the performance of an obligation is not established, prescription shall run from the moment when a claim to perform the obligation is brought. 4. Prescription of claims arising from regressive obligation shall start its run from the moment when the principal obligation is performed. 5. In the event of a continuous infringement, i.e. it happens every day (a person fails to perform the actions he is bound to perform, or performs the actions he has no right to perform, or does not discontinue another violation), prescription for actions brought upon activity or inactivity that occurred on a concrete day shall start its run from that every day. Article 1.128. Prescription of claims arising from an obligation upon subrogation Substitution of persons in an obligation shall not affect the course of prescription – the time-limit and the procedure of its calculation, unless laws provide for otherwise. Article 1.129. Suspension of prescription 1. Prescription shall be suspended if: 1) an extraordinary event that cannot be prevented in certain circumstances (force majeure) hinders to bring an action; 2) the Government of the Republic of Lithuania establishes a postponement of the performance of obligations (moratorium); 3) the plaintiff or defendant serves in a unit of the armed forces of the Republic of Lithuania where martial law is imposed; 4) no guardian or curator is appointed to a legally incapable person or to a person whose legal active capacity is limited; 5) the parties to an obligation are spouses; 6) the parties to an obligation are a guardian and the person under guardianship, or a curator and the person under curatorship; 7) the parties to an obligation are parents and their minor children; 8) the effect of the law or any other legal act regulating relationships of the dispute is suspended; 2. The run of prescription shall be suspended only in the event when the circumstances indicated in paragraph 1 of this Article occured or continued to exist during the last six months of the prescription; where the time-limit of the prescription does not exceed six months, the run of the prescription shall be suspended if the circumstances indicated in paragraph 1 of this Article occured or continued to exist during the whole period of the time-limit of the prescription. 3. Suspended prescription resumes its run from the day when the circumstance which conditioned such suspension ceases to exist. In that event, the remaining part of the time-limit shall be prolonged by six months; if the time-limit of prescription is shorter than six months, it shall be prolonged by the whole duration of the time-limit. Article 1.130. Interruption of prescription 1. Prescription shall be interrupted by bringing an action within the procedure established by laws. 2. Prescription shall also be interrupted by actions of a debtor by which the debtor acknowledges his obligation to the creditor. 3. An interrupted time-limit of prescription shall be resumed from the moment when the cause of such interruption ceases to exist. An interruption of prescription resulting from bringing an action shall be resumed from the time when the judgement thereon acquires the authority of the final judgement (res judicata), provided that an identical claim can be forwarded from the disputed legal relationship. The period that expired before the interruption shall not be included into the new time-limit of prescription. 4. No interruption in the time-limit of prescription shall occur where the suit is discontinued by the court due to the fault of the plaintiff. Refusal to accept the complaint or its withdrawal by the plaintiff shall likewise have no effect of interrupting prescription. 5. If an action brought in criminal proceedings is discontinued, prescription commenced before this action was brought shall continue its run from the day when the verdict by which the action was discontinued becomes finally binding. Article 1.131. Legal effects of the expiration of a time-limit of prescription 1. The expiration of a time-limit of prescription prior to the date of bringing an action shall serve as valid grounds for dismissal of the claim. 2. If the court acknowledges the time-limit of prescription as expired due to important reasons, the violated right must be protected and the expired time-limit restored. 3. Questions of the ownership of property, for revindication of which prescription has expired, shall be regulated by the provisions of Book Four of this Code. Article 1.132. Suspension, interruption and restoration of abridged prescription The provisions regulating suspension, interruption and restoration of prescription (Articles 1.129 to 1.131 of this Code) shall likewise be applied in respect of abridged prescription except in cases where laws provide for otherwise. Article 1.133. Consequences arising when a debtor performs an obligation after the expiration of a time-limit of prescription Where a debtor performs his obligation after the expiration of the time-limit of prescription, he shall have not right to claim restitution even if at the time of the performance of his obligation he did not know that the time-limit of prescription had expired. Article 1.134. Claims not subject to prescription 1. The following claims shall not be prescribed: 1) claims arising from the violation of personal non-property rights, except in cases established by laws; 2) claims of depositors for repayment of their accounts deposited in a bank or any other credit institution; 3) other claims in cases established by other laws. Article 1.135. Application of prescription with respect to accessory claims Expiration of prescription with respect to the principal claim shall have the same effect likewise on the accessory claims (penalty, pledge, suretyship, etc.), even though the prescription of the latter may not have expired. PART V Exercise and protection of civil rights CHAPTER VIII PRINCIPLES OF EXERCISE OF CIVIL RIGHTS AND THE WAYS OF THEIR PROTECTION Article 1.136. Grounds for the arisal of civil rights and duties 1. Civil rights and duties shall arise on the grounds established by this Code and other laws, also from actions performed by natural persons and organizations which, though not determined by laws, create civil rights and duties within the general principles and the meaning of the civil laws. 2. Pursuant to paragraph 1 of this Article, civil rights and duties shall arise: 1) from contracts and other transactions provided for by this Code and other laws, likewise from such transactions which might not be stipulated by the laws but not at variance with these laws; 2) from court judgements; 3) from administrative acts that cause civil legal effects; 4) as a result of creating intellectual property; 5) on the grounds damage, as well as on the grounds of the reception of property not due or of unjust enrichment; 6) on the grounds of events or actions (active or passive) to which the arising of civil legal effects is linked by laws. Article 1.137. Enjoyment and exercise of civil rights and performance of civil duties 1. Persons shall freely enjoy their civil rights at their own discretion, including the right to protection. 2. Persons, while exercising their rights and performing their duties, must obey laws, respect rules of public welfare and principles of good morals, good faith, reasonableness and justice. 3. A person shall be forbidden to abuse his own right, i.e. there being no legal ground, no civil rights may be exercised in a manner or by means intended to violate other persons’ rights and interests protected by laws; or to restrict other persons in their rights and interests protected by laws; or with the intent of doing damage to other persons; or where this would be contrary to the purpose of the subjective right. Abuse of a right that causes injury to other persons shall be the grounds for the implementation of civil liability. A court may refuse to protect the subjective right of which the person abuses. 4. The exercise of civil rights may not be used in bad faith and with the intent of unlawfully limiting competition or in abuse of the dominating position in the market. 5. Civil rights shall be protected by the laws, except in cases when the exercise of these rights is inconsistent with their purpose, public order, good usages (bonus mores) or the principles of public morals. 6. A renouncement of exercise of a subjective civil right shall not abolish the civil subjective right, except in cases established by laws. Article 1.138. Protection of civil rights 1. Civil rights shall be protected by the court acting within its competence and according to the procedure established by laws. The ways of protecting civil rights are the following: 1) acknowledgement of rights; 2) restoration of the situation that existed before the right was violated; 3) prevention of unlawful actions or prohibition to perform actions that pose reasonable threat of the occurrence of damage (preventive action); 4) ad judgement to perform an obligation in kind; 5) interruption or modification of a legal relationship; 6) recovery of pecuniary or non-pecuniary damage from the person who infringes the law and, in cases established by the law or contract, recovery of a penalty (fine, interest); 7) declaration as voidable of unlawful acts of the state or those of the institutions of local governments or the officials thereof in the cases established in paragraph 4 Article 1.3 of this Code; 8) other ways provided by laws. Article 1.139. Self-defense 1. Self-defense may be exercised for the purposes of protecting one’s civil rights only in the events established by this Code. 2. Methods and means of self-defense must correspond to the nature of the unlawful act and cannot exceed the limits of self-defense that exist in every concrete event. 3. In exercising self-defense, the rights and freedoms of individuals must be respected, as well as the requirements of laws must be observed. BOOK TWO PERSONS PART I NATURAL PERSONS CHAPTER I PASSIVE AND ACTIVE CIVIL CAPACITY OF NATURAL PERSONS SECTION ONE PASSIVE CAPACITY Article 2.1. The concept of passive civil capacity of natural persons Every natural person shall have the full enjoyment of civil rights (passive civil capacity) Article 2.2. Beginning and end of passive civil capacity of natural persons 1. Passive civil capacity of a natural person shall begin at the moment of his birth and end at the moment of his death. 2. The beginning of rights prescribed by law to a conceived but yet unborn baby shall depend on the act of its birth. 3. In the event of the impossibility to establish whether a baby was born alive or dead it shall be presumed that it was born alive. 4. Where certain ensuing legal consequences depend on the fact which of natural persons died at an earlier date and where it is impossible to establish the moment of the act of death of them each, it shall be presumed that the said natural persons died at the same time. Article 2.3. Acts of birth and death of natural persons 1. The first independent breath shall be considered to be the act of birth of a natural person. 2. Full and irreversible stoppage of blood circulation or stoppage of all brain functions shall be considered to be the act of death of a natural person. 3. Criteria for stating the acts of birth or death shall be prescribed by law. Article 2.4 Content of the passive civil capacity of natural persons 1. According to law, natural persons shall be entitled to property as the object of private ownership and shall enjoy the right to engage in commercial activities, establish enterprises or other legal entities, inherit property and bequeath it, choose a sphere of activities and residence, to have invention or industrial sample rights as well as other property and individual non-property rights, which are protected by the civil law. 2. Natural persons who, in accordance with the procedure established by the law, are engaged in commercial activities shall be deemed to be entrepreneurs. 3. Every person engaged in business or practising of his profession shall have to administer his property and everything related to his undertaking or practising of his profession as well as to safeguard documents and other information about his property, undertaking or practising of his profession in the manner, which would enable every person, having a legal interest, at any time, to receive comprehensive information about the property rights and obligations of the person in question. SECTION TWO ACTIVE CAPACITY Article 2.5. Active civil capacity of natural persons 1. On attaining full age, i.e. when a natural person is eighteen years of age, he, by his acts, shall have full exercise of all his civil rights and shall assume civil obligations. 2. Where the law provides for the possibility of a natural person to enter into marriage before he is eighteen, the person, who has not yet come of the given age, shall acquire full active civil capacity at the moment of entering into marriage. If at a later date this marriage is dissolved or nullity of marriage is declared for reasons not related to the age of the parties to marriage a minor shall not loose his full active civil capacity. Article 2.6. Prohibition to impose restrictions on the passive or active civil capacity of Natural Persons on the Grounds which are not Prescribed by Law. 1. Restrictions on the passive or active civil capacity may not be imposed on anyone in any other manner except by express provision of law. 2. Transactions, acts of public or municipality institutions or officials, which impose restrictions on the passive or active civil capacity, are deemed to be null and void except in cases where the said transactions and acts are prescribed by law. Article 2.7. Active civil capacity of minors under fourteen years of age 1. Contracts on behalf and in the name of minor’s under fourteen years of age name shall be concluded by their parents or guardians. 2. Upon entering into contracts and enforcing them parents and guardians shall have to act exceptionally in the interest of minors. Rights and obligations of parents and guardians in administering the property of minors are laid down in the provisions of Book three of the given Code. 3. Minors under fourteen years of age shall enjoy the right to enter alone into contracts to meet their ordinary and usual needs, conclude contracts aiming at gratuitous personal gain, as well as conclude contracts related to the use of their own earnings or money provided by their legal representatives or other persons if the said contracts fail to have a prescribed notarial or any other specific form. 4. Liability of legal representatives for contractual obligations of minors, who are under fourteen years of age, shall be prescribed by law if they fail