Mandate in Lithuania

Mandate Agreement

A mandate – under a mandate agreement, one party (the agent) undertakes, on behalf of and at the expense of the other party (the principal), to carry out certain legal acts with third parties. The rights granted by the principal to the agent and the written document confirming them are referred to as a power of attorney. Under a mandate agreement, the principal may instruct the agent to perform legal actions related to the protection of the principal’s interests, the administration of all or part of the principal’s property, procedural actions on behalf of the principal before courts and other institutions in the Republic of Lithuania, and other legal acts.

The agreement may be either with or without remuneration. If both parties to the agreement are natural persons, it is presumed to be non-remunerated, unless the legal acts carried out by the agent in the name of another person are part of the agent’s professional or business activities. If one or both parties to the agreement are business entities, it is presumed to be a remunerated contract. If the agreement is remunerated, the agent’s fee is determined by the agreement or by law. If no such fee is specified, it is established based on customary practice, market prices, the nature and duration of the services provided, recommendations of relevant professional associations, and other relevant circumstances. If the agent acts as the commercial representative of the principal (in Lithuania), they have the right to retain items to be transferred to the principal until full settlement has been made.

The agent must perform the mandate according to the principal’s instructions, which must be legal, feasible, and specific. The agent may deviate from the instructions if, considering the specific circumstances, this is necessary in the interest of the principal, and the agent could not obtain prior consent or did not receive a reply within a reasonable time. In such cases, the agent must inform the principal of the deviations as soon as possible. If the agent acts as a commercial representative, the principal may authorize them to deviate from the mandate without prior consultation. In such a case, the commercial representative must notify the principal within a reasonable time, unless otherwise provided in the agreement.

Duties of the Attorney-in-Fact

1. The attorney-in-fact must perform the assigned mandate honestly and diligently, in a way that best serves the interests of the principal, and avoid any conflict between their personal interests and those of the principal.
2. The attorney-in-fact must perform the mandate personally, except in cases specified in the agreement or where sub-delegation is allowed under the law of the Republic of Lithuania.
3. While executing the mandate, the attorney-in-fact must, upon the principal’s request—and, depending on the circumstances, even without such request—provide all information regarding the execution of the mandate.
4. Upon completion of the mandate, the attorney-in-fact must immediately notify the principal, submit a report with supporting documents, and return the power of attorney, unless otherwise agreed.
5. All that the attorney-in-fact receives while executing the mandate must be immediately transferred to the principal.
6. If the attorney-in-fact engages third parties to carry out the mandate under the agreement, law, or customary practices in Lithuania, they are liable for the actions of those third parties and must compensate any damage caused to the principal.
7. If several attorneys-in-fact are involved in executing the mandate, they are jointly liable to the principal unless the agreement states otherwise.
8. The attorney-in-fact may not use information or property obtained during the execution of the mandate for personal purposes, except as permitted by law, agreement, or with the principal’s consent. If this duty is breached, the attorney-in-fact must compensate the principal for damages and return any unjust enrichment; if property or money was used unlawfully, appropriate rent or interest must be paid.

Duties of the Principal

1. The principal must cooperate with the attorney-in-fact in the execution of the mandate.
2. The principal must immediately accept everything performed by the attorney-in-fact in accordance with the mandate agreement.
3. Unless otherwise specified in the agreement, the principal must provide the attorney-in-fact with the necessary resources to carry out the mandate, reimburse necessary expenses, and, if needed, provide an advance to cover such costs.
4. Upon proper performance of the mandate, the principal must pay the attorney-in-fact remuneration, if the agreement is remunerated.
5. The principal must compensate the attorney-in-fact for any damage incurred in the execution of the mandate, provided there was no fault on the part of the attorney-in-fact and no other person is liable for such damage.