The extended panel of judges of the Supreme Court of Lithuania has changed the previous practice relevant to the issue of purchase and sale of vehicles.

Pursuant to the provisions of Article 6.314 of the Civil Code of the Republic of Lithuania, the parties may set a term for payment in the contract. If the term for payment of the price is not specified in the contract, in that case the price must be paid when the seller fulfills his obligation to deliver the items or documents for the disposal of the items. As according to Paragraph 1 of Article 6.314 of the Civil Code of the Republic of Lithuania, the place of payment of the price is the place of transfer of goods, therefore the time of payment of the price is related to the moment of transfer of goods. Previously, the case law considered that the contract of purchase and sale of a vehicle confirmed by the signatures of the parties, documents confirming the right of ownership of the vehicle transferred to the buyer, registration of ownership of the car on behalf of the buyer are sufficient to establish the buyer paid for the vehicle.

The extended panel of seven judges of the Civil Cases Division of the Supreme Court of Lithuania in 2021 February 24 order in civil case No. e3K-7-125-378/2021 has substantially changed the previous practice and stated that “the buyer’s obligation to pay the price includes not only the payment of a sum of money but also the taking of appropriate measures which may be required by contract or law to prove, where appropriate, that the price has been paid.”

As it is the will of the parties to agree on when the price will be paid: at the time of signing the contract, when handing over the vehicle, registering or within the agreed period thereafter, disputes may arise later to prove that the buyer has paid for the item. When paying by bank transfer, it is not difficult to prove this fact, but often such payment is made in cash. As mentioned above, the fact that the vehicle has been handed over to the buyer, its re-registration on behalf of the buyer will only confirm that the seller has fulfilled his obligation to hand over the item, but does not fulfill the buyer’s obligation to pay the contract price.

Thus, according to the newly established practice, buyers should not forget the seller’s confirmation that the agreed price has been received and to record it in writing in the contract itself or in another way that could later unequivocally confirm that the buyer has fulfilled his main obligation under the contract – by paying for the purchased vehicle.

Please note that the vehicle purchase and sale form provided by “Regitra” does not include a specific point about the moment of payment, that the price was paid before the conclusion of the contract, at the time of its conclusion, etc., however, space is reserved for additional information on the method of payment and / or other conditions. In this paragraph, it would be appropriate to specify a time limit if it has been agreed that the price will be paid later, or to indicate that payment is made at the time of conclusion of the contract if the money is paid at the time of conclusion of the contract. The fewer oral parts of the agreement, the less likely it is that disputes will arise.

 

ARTICLE PREPARED BY:

Černiauskas and Partners Law Firm Advocate’s assistant Karolina Rainytė.

 

 

ANOTHER NEW 29 JUNE 2021 ORDER OF THE EXTENDED CHAMBER OF JUDGES OF THE CIVIL CASE OF THE SUPREME COURT OF LITHUANIA WHICH  CHANGED THE PREVIOUS CASE LAW OF THE COURT OF CASSATION REGARDING THE RIGHT OF THE DEBTOR TO OFFER THE BUYER OF THE SEIZED PROPERTY AFTER THE EXECUTION OF THE FIRST AUCTION

2021-08-16

Until now, the case law of the Court of Cassation has clarified that under Article 704 of the Code of Civil Procedure, the debtor may exercise the right to offer the buyer of the property in auction only until the publication of auctions on a special website. Accordingly, it was explained that the debtor could not exercise this right after the first auction had been published on a special website, including in cases where the first auction had been declared failed.

However, the court declared that the sale of the debtor’s property to the buyer named by him had priority over the sale of the property by auction, and after assessing the need to change the existing practice, clarified that the debtor has the right to offer the buyer of his property not until the first auction, as in the case law, but before the announcement of the second auction on the special website www.evarzytynes.lt, even if the first auction did not take place due, for example, to the fact that the purchaser of the property who won them did not pay the price offered.

The panel of judges of the Supreme Court of Lithuania changed the formed practice in civil case No. 3K-3-189-684/202017 in 17 June 2020 decision and declared that the fair market value of the assets to be recovered is not the same as that offered in the failed auction, but not paid cost, therefore, the property may be sold to a buyer of the debtor’s choice at a price not less than the value of the seized property specified in the latest seizure deed or a lower price if they are sufficient to fully cover the indebtedness and the enforcement costs incurred.

ARTICLE PREPARED BY:

Černiauskas and Partners Law Firm Lawyer Daiva Monika Gineikė.