Protection of business interests under the circumstances of the extreme situation


Every situation and business relationship is individual, so it must be assessed individually as well. There are no force majeure circumstances which could be applied to all business relationships universally. Therefore, the announced extreme situation and quarantine in the country cannot be considered as force majeure for of all business relationships. We are prepared to help you to analyze whether your particular situation meets the requirements of force majeure.

  • A force majeure event provides an opportunity not to terminate the contract, but to suspend the performance of the obligations in the first place, if it is justifiable by the individual circumstances (Article 6.212 of the Civil Code of Lithuania). We can help you to assess the situation and advise on possible alternatives for dealing with the specific situation you find yourself in.
  • A party affected by exceptional circumstances has a right to apply the statutory mechanism regarding the performance of contracts in the event of changed circumstances (Article 6.204 of the Civil Code of Lithuania), which allows the affected party to initiate an amendment or termination of the contract. The case law of Lithuanian courts formed as a result of the financial crisis of 2008 showed that this mechanism is applied with a great reservation. A party willing to avail itself of this possibility must strictly comply with the conditions and procedures laid down by the Civil Code of Lithuania. We can advise on how such conditions and procedures should be followed.
  • If your business tends to credit the supply of goods/ provision of services, it is recommended to assess the solvency of the buyer/ service recipient more carefully, review the business relationship model, set shorter payment terms, set an additional obligation security or require an advance payment. We are ready to assist in the collection and analysis of publicly available information to assess the counterparty's solvency risks, to advise on additional security of obligations that may be required from the counterparty, assist in the management of existing claims and debts, and defend the rights and interests in court.
  • It is possible that not only a fair business, which has actually suffered due to current situation, will seek to take advantage of the extreme situation and the quarantine. The unfair entrepreneurs also may try to link the old financial problems with the current situation. We can assist in identifying such situations and defend your interests through legal means, including representation in court or arbitration.
  • The newly adopted Law on Insolvency of Legal Entities has facilitated the initiation of insolvency proceedings (defining the concept of insolvency more broadly than the previous Law on Bankruptcy of Legal Entities) and entrepreneurs are likely to take advantage of this facilitation. We are able to represent your interests in insolvency proceedings, advise on how to act most effectively in the context of such proceedings. We can also assess whether there are any signs of unfairness on the part of entrepreneurs in their activities such as the transfer of assets and activity to another entity, or privileging one creditor over another etc. Respectively, we are ready to represent your interests in court during the insolvency proceedings, in disputes contesting transactions, as well as in claiming damages from company’s managers/ shareholders.