Transactions in Lithuania

Concept of Transactions

Transactions are actions of individuals aimed at creating, modifying, or terminating civil rights and obligations. These are expressions of intent, consciously directed at achieving a specific legal result. A person’s desire to enter into a transaction is called internal intent (will). The formation of this will is influenced by goals and motives. Every transaction under the law serves a typical legal purpose. Only the direct legal purpose pursued by the parties has legal significance and is called the legal basis of the transaction. The legal nature of a transaction depends on this legal goal. Motives, as a psychological aspect, influence internal intent but have no legal significance once the transaction is made.

Types of Transactions:

1. Unilateral transaction (e.g., will, power of attorney): requires and is concluded by the will of only one party. Obligations arise only for the person who made it, and for others only as provided by law or with their consent.
2. Bilateral transaction: requires the coordinated will of two parties.
3. Multilateral transaction: requires the coordinated will of three or more parties.

Participants must have legal capacity and capability, as established by Lithuanian law. The will must be expressed in a legally prescribed form – orally, in writing, or through conduct (implied actions).

Forms of Transactions:

1. Oral – used where no written form is required by law or by agreement:
   • between individuals, when the value does not exceed 145 EUR;
   • regardless of value, if fulfilled immediately (unless otherwise provided by law).
2. Written – created by a single document signed by all parties or through exchanged documents:
   • simple written form: document with names, terms, and signatures;
   • notarized form (required in Lithuania in certain cases – otherwise the transaction is invalid), such as:
     • transfer of property rights to real estate;
     • marital agreements (pre-nuptial, post-nuptial);
     • other transactions requiring notarization by law.
3. Implied (conclusive) actions – behavior that clearly indicates intent to enter into a transaction. Only permitted where no form (oral or written) is legally required.

A person’s will may be expressed through silence

In Lithuania, silence is considered an expression of will to conclude a transaction only in cases provided by law (e.g., if a tenant continues to use the property after the lease period ends and the landlord does not object, the lease is considered renewed for an indefinite term).

Written transactions must be signed by the persons concluding them. If a natural person, due to a physical disability, illness, or other reasons, cannot sign personally, another person may sign on their behalf with authorization. The signature of the substitute must be certified by a notary or the head (or deputy) of the institution, enterprise, or organization where the person works or studies, or by the chief physician (or deputy) of the medical institution where they are receiving treatment, or by the commander (or deputy) of the military unit if the person is a soldier, or by the captain of a ship in long-distance navigation. The reason why the person could not sign personally must be stated.

A contract is the most common type of transaction. It is a legally and formally valid agreement between two or more persons to create, modify, or terminate civil rights and obligations in the Republic of Lithuania. The main feature of a contract is the mutual agreement of the parties. The expressed will of the contracting parties must be aligned and aimed at achieving common goals. A contract is a type of transaction. Every contract is a transaction, but not every transaction is a contract.

Key elements of a contract:

1. Parties (contract participants);
2. Content (the system of terms defining the rights and obligations of the parties);
3. Form (the external way of expressing the parties’ will).

Contract terms (divided into three types):

1. Essential (necessary) – without which the contract is considered not concluded. These may be set by law, required for a specific type of agreement, or declared necessary by one of the parties.
2. Ordinary – set by law and automatically binding upon contract formation. Unlike essential terms, they do not require explicit agreement. The contract’s validity does not depend on whether these are stated in the text.
3. Incidental – agreed upon by the parties, not regulated by law or regulated in a discretionary manner. They are not mandatory like essential terms.