Month: December 2025

The biggest changes often start with a small push. Sometimes it's the belief that you can do it. This first push may be a conversation with a psychologist who helps you understand your feelings. Sometimes it's a cozy family dinner where you feel safe and cared for for the first time. And sometimes it can be a club where you finally discover yourself: music, sports, creativity. Such things, which may seem small at first glance, can become a cornerstone of change in the life of a child or teenager from a difficult environment.

AVOCAD believes that every person, even if they are just starting to climb the ladder today, deserves support and a chance. That is why we choose to support not only those who have already reached the top, but also those who are still climbing—children and teenagers who most need to believe that they can do it," says Egidijus Langys, managing partner of the AVOCAD law firm.

According to him, this initiative has already become a beautiful Christmas tradition. "For many years, we have been allocating funds intended for business gifts to support those who need it most today. Every year, we see that this idea inspires other businesses to do the same. Sharing light is the best gift we can give," says the lawyer.

This year's gift budget is allocated to SOS Children's Villages Lithuania's "Gerumo krautuvėlė" (Kindness Store) – an initiative that allows everyone to contribute to the well-being of children and adolescents by giving them not a gift, but an opportunity.

According to Rasa Zaidovaitė, program manager at SOS Children's Villages Lithuania, every year this initiative gives teenagers the opportunity to attend clubs of their choice, receive psychological help, or experience their first lessons in independence. "Even insignificant support becomes a springboard that leads to big changes," says the representative.

Rasa Zaidovaitė cites the story of a girl named Ilona as an example. "She came to the day center when she was ten—calm, but full of anxiety. Having grown up in a violent environment, she had nothing she could call security. The day center became her haven—a place where she could bathe without fear for the first time, ask for help, and hear that she was worth more. Today, Ilona is 20, working and living independently. As she herself says, the opportunity to escape was her second birth," says the program manager of SOS Children's Villages Lithuania.

Another story is that of Jonas. "When he first appeared at the window of our center, he was six years old. He knocked on the glass and looked inside—curious, but quiet. His father had died, and his mother was raising three children on her own. They lacked everything—food, warmth, attention. Today, Jonas is fourteen. He attends clubs, works hard at school, and looks forward to Fridays, when he can choose a gift for his family at the children's day center "store" for doing good deeds. He says that this is his home. Here, people listen to him and believe in him. That belief is the essence of our mission," says Rasa.

According to her, it is precisely such stories that remind us why support is more than just financial assistance. It becomes an opportunity—a new starting point from which a life without fear begins.

The AVOCAD professional association of lawyers invites other businesses and individuals to join this initiative and visit the Kindness Store and together give someone a chance for a new start in life.

The AVOCAD law firm not only provides a wide range of legal services to businesses, but also actively supports social initiatives that promote education, the inclusion of children and young people, and conscious business responsibility.

We are attaching a video clip of this social campaign.

Social initiatives – video.

The construction sector in Lithuania is one of the most complex and controversial. Contractors meet in court, disagreeing on constantly changing work volumes, strict deadlines, technical requirements, and changes in legal regulations. However, legal practice shows a clear trend that most disputes arise from much simpler issues – disorderly documents, verbal agreements, incompletely filled out acts, and unproven facts. As AVOCAD lawyer Kamilė Šemeklytė notes, in construction disputes, it is not the party that has done the most that wins, but the party that can prove what it has done, when it has done it, and under what conditions.

The work will "speak for itself" – the biggest myth in construction

First of all, according to the lawyer, people in construction often trust each other and rely on intuition or verbal agreements. As a result, certain tasks are assigned simply on the belief that the result will be good.

Although legislation does not prohibit the conclusion of verbal contracts, in practice this poses a significant risk. Regardless of the relationship between the client and the contractor, the scope of work, or the price, it is always recommended to conclude a written contract and to formalize all additions, changes, work schedules, and other agreements in writing.

Civil procedure provides for a clear rule: each party must prove the circumstances on which it bases its position. This means that both the contractor and the customer will have to provide evidence in the dispute, rather than just abstract arguments.

In the absence of written contracts, schedules, or agreements, verbal agreements become mere interpretations of the parties when a dispute reaches court, which are usually favorable only to the party presenting them. As a result, the parties' positions diverge, and the court cannot confirm or refute such verbal statements because they do not have sufficient probative value. This can be critical when making a final decision in a case.

In such situations, the court relies solely on objective, written evidence, and verbal agreements are therefore irrelevant. "The court has no way of determining the actual situation when agreements were verbal. It cannot confirm the scope of work, price changes, or deadline extensions if there is no written evidence. Therefore, a party that relies solely on a verbal agreement is considered to have failed to prove its position," notes the AVOCAD lawyer.

This can have serious consequences: for example, the entity may be obliged to perform certain works, even though it was agreed verbally that they would no longer be performed. This is why verbal agreements in construction are one of the biggest risks.

Additional work – only with a written order

Secondly, written documents are very important throughout the entire duration of the contract. Although the contract usually specifies a specific price for the work, calculated by the contractor after evaluating all the project documentation, in practice there is often a need to change solutions or perform additional work.

This means that the cost of the work also increases, but although it seems that the contractor automatically acquires the right to remuneration, since this is additional work, nevertheless, the specifics of the legal relationship between the parties may mean that, in the absence of a written agreement between the parties on the additional work, the contractor will have performed the additional work at its own risk and expense and will not be entitled to payment for this additional work.

The lawyer points out that if the client and contractor sign a written contract for work, the client, as an experienced professional, usually ensures that the contractor has been provided with all project documentation and a clear, unambiguous task. In such a case, the contract price is considered final and unchangeable, and includes all work necessary to complete the project fully and properly in accordance with the documents provided by the client.

Therefore, if the parties do not agree in writing on additional work, the contractor may lose the right to remuneration for the work performed, as the customer may point to the provision of the contract stipulating the contractor's obligation to assess the entire task and project documentation, its solutions and to assert that this should not be considered additional work and that this work was included in the contract price, and therefore the customer is not obliged to pay for the work performed.

Inaccurate or unchangeable work schedules

Thirdly, another acute problem in construction is delays in the performance of construction works, which are associated with significant losses. In order to ensure the shortest possible delays and the least possible losses due to the contractor's delays, when concluding a contract for work, the parties to the contract should not forget to record the schedule for the performance of the work in writing. "A written schedule will not only allow the client to control the construction process, but will also allow the client to take all measures to minimize potential losses," says Kamilė Šemeklytė.

A written schedule for the performance of contract works approved by both parties will facilitate the burden of proof in legal proceedings, which will not only allow the customer to prove that the contractor failed to comply with the schedule for the performance of works (if such a delay on the part of the contractor occurred), but will also facilitate the progress of the work for the contractor itself.

Often, more than one contractor works on a construction site. In such cases, it is important not only to know the completion date of the work, but also when the work will be handed over to the next contractor. If one subcontractor is late, the next contractor cannot start their work on time. This means that the second contractor is not to blame for the delay in the overall project and cannot be held liable for any related losses.

Therefore, according to the lawyer, the work schedule approved by both parties becomes very important—it allows to clearly determine which contractor violated the deadlines. This helps both in assessing losses due to delays and in resolving disputes in court, as proving the case becomes simpler and clearer.

Admission acts – an important legal moment

Fourth, according to AVOCAD's lawyer, it is very important to emphasize that the parties must not only agree in writing on the scope of work, price, deadlines, and other conditions, but also formalize the work performed in writing—its quantity, value, and the fact of its transfer. This is done by signing certificates of completion, which are signed by both the contractor and the client. These certificates confirm that the work has been delivered and accepted.

The Supreme Court of Lithuania has clarified that the acceptance certificate for completed works is a document confirming the performance of a contract for work, which records the results of the work performed by the contractor and the customer's willingness to accept it, with or without comments. In other words, this certificate confirms the fact that the work has been handed over and determines the rights and obligations of both parties after the handover.

First of all, the signed certificate gives the contractor the right to issue a VAT invoice and demand payment. However, it is important to understand that the certificate of completion is not a document that can be used to change the terms of the contract, including the contract price (unless the parties have agreed otherwise in the contract).

Secondly, the certificate of completion is also extremely important for the client. Legal regulations stipulate that the client has the right to refuse to accept the work, but such a refusal must be justified by clear reasons. Only a justified refusal means that the contractor does not acquire the right to demand payment.

Finally, the work acceptance procedure is closely related to the assessment of work quality. The Supreme Court has ruled that the compliance of work with requirements must be assessed at the time of acceptance. Therefore, the customer must act with due care and inspect the results of the work to check for obvious defects. The customer is not required to use special measures – a normal, reasonable inspection is sufficient.

Signing the certificate of completion is one of the most important stages of the construction process. Even if the relationship between the parties is based on trust, all work transfer and acceptance actions must be formalized in writing. Practice shows that relations remain smooth until disagreements or shortcomings arise – and that is when written documents become essential evidence," notes Kamilė Šemeklytė.

Even minor agreements on the construction site must be recorded.

Fifth, although it is recommended that both the contract and any amendments, additions, and transfers of work be formalized in writing, this is not always the case. Construction is a very dynamic process, and the need to refine solutions, give instructions, or clarify project details is a constant process. Therefore, verbal agreements on the construction site are convenient and often used, but they have no probative value.

According to AVOCAD's lawyer, in order to avoid disputes in the future, even verbal agreements that do not change the essential terms of the contract should at least be confirmed in writing. The simplest way is for the responsible persons of the client and the contractor to correspond by e-mail. This does not require official documents, but creates clear written evidence. Another very effective method is weekly production meetings between the client and the contractor, which should be minuted. Such minutes are extremely useful in the construction process. If the dispute does go to court, these documents would become important evidence, as they would clearly show what decisions were made, what work was agreed upon, and what the actual intentions of the parties were.

Long-term lease agreements often provide for the indexation of rent. One of the most commonly used criteria is the consumer price index (CPI). In practice, the parties agree on the application of the CPI, but do not include more detailed provisions on the indexation mechanism and do not provide for possible risks.

According to Sandra Mickienė, senior lawyer at the AVOCAD law firm , such a "standard" formula may seem reliable at first glance, but improperly worded provisions can also have a negative impact. "In the event of unexpected changes in economic circumstances, the CPI may fluctuate so significantly that it could lead to a substantial increase in rent, particularly for large premises where the monthly rent is calculated in tens or even hundreds of thousands of euros," notes Mickienė.

So how can these risks be avoided and a balanced indexation mechanism ensured?

The consumer price index (CPI) is often chosen as the criterion for indexing rent in long-term lease agreements for several key reasons. First, the CPI is an officially published statistical value that reflects the overall change in the prices of goods and services in the country, and is therefore considered an objective indicator. Second, the use of the CPI provides the parties with a clear, easily understandable, and predictable basis for adjusting the rent, allowing them to maintain the economic balance of the agreement and protect the landlord from the effects of inflation. Thirdly, the CPI is widely recognized in the market, so its use helps to ensure transparency and reduce the risk of disputes over the amount of rent.

According to the lawyer, most often the parties clearly agree in the lease agreement on the specific index that will be used to recalculate the rent (for example, the change in the CPI over the year), indicate the source of its publication, and also determine the start date of its application and the calculation formula. Such wording is considered appropriate because both parties understand which indicator is used and how it will be used. However, in most cases, the parties do not establish a CPI "ceiling" or any exceptions or alternative rules that would apply in the event of extreme economic circumstances, such as a pandemic, energy crisis, or other atypical market shocks.

An AVOCAD lawyer warns that it is precisely in such situations that practical problems arise: the rental price may rise so suddenly and significantly that it becomes difficult for the tenant to maintain business stability. "Let's say a logistics company pays €200,000 in rent every month. If, due to a new economic crisis or pandemic, the CPI changes by, say, 20%, the rent recalculated according to the indexation rules set out in the contract would increase to €240,000. Such a sudden monthly increase of €40,000 could lead to a significant increase in the company's operating costs and pose a real threat of financial difficulties," notes S. Mickienė.

It is important to understand that, according to the Civil Code and court practice, the principle of pacta sunt servanda applies – a contract is binding on the parties as if it were a law. This means that obligations must be fulfilled even when it becomes more difficult or financially disadvantageous to do so. Normal business difficulties, market fluctuations, rising inflation, or even a pandemic are not usually considered sufficient grounds for changing the terms of a contract, especially when the contract is concluded by professional business entities that have a duty to assess the potential risks in advance.

According to case law, although it is impossible to predict specific extreme circumstances, such as a pandemic or geopolitical conflicts, business entities, when entering into long-term contracts, can and must reasonably anticipate that significant economic changes may occur over a longer period of time, leading to inflation. Therefore, if the parties themselves do not establish exceptions to the general rules for applying the CPI in the contract or do not set a "ceiling" for the application of the CPI, even a particularly significant increase in the index is considered a risk assumed by the parties.

However, the lawyer points out that the Civil Code provides for the possibility of requesting the court to amend the contract (for example, the mechanism for calculating rent) if circumstances arise that substantially alter the balance of the parties' contractual obligations. However, the application of this institution is not simple, as the aggrieved party must prove all the conditions set out:

1. that the circumstances arose after the contract was concluded;
2. that they could not have been reasonably foreseen at the time of conclusion of the contract;
3. that they were not under the control of the affected country; and
4. that this country had not assumed the risk of such circumstances arising.

It was precisely this type of argument that was used in one case by a tenant who asked the court to recognize that, under a long-term lease agreement, the rent should be indexed not according to the actual CPI, but by applying a 1.9% index. The tenant explained that due to the war in Ukraine and other economic factors, the CPI had jumped to 17.2%. The tenant claimed that such an unprecedented jump had fundamentally changed the balance of the agreement and therefore requested that the indexation mechanism be changed and a lower index be applied.

However, the Supreme Court of Lithuania stated that a significant increase in the CPI alone does not in itself mean a fundamental change in the balance of contractual obligations that would justify an exception to the pacta sunt servanda principle. The court emphasised that contracts must be performed even when performance becomes more difficult, and that the aforementioned principle can only be applied in cases of fundamental imbalance of obligations. The court explained that in the case at hand, the momentary jump in the CPI increased the rent by about 33.8%, but the total increase in the contract price was only 7.04%. This may complicate the performance of the contract, but it cannot be considered a change of such magnitude that would justify legal intervention in an agreement freely entered into by the parties. In addition, the tenant was in a strong financial position, so the increase in rental costs did not objectively threaten the continuity of its operations, and it is precisely this risk that is significant when assessing the impact of changed circumstances.

The court also noted that although the factors caused by the pandemic or war could not have been predicted, it is the index itself that should be considered a fundamentally changed circumstance, rather than the reasons that determined it. When entering into long-term (e.g., 10-15 year) contracts, business entities must reasonably anticipate that market fluctuations, including a significant increase in inflation, may occur during such a period. Furthermore, the provisions of the contract itself showed that the tenant assumed the risk of inflation – CPI indexation was established as unconditional and unlimited, and no indexation "ceiling" was provided for. Therefore, the parties agreed in advance on the distribution of risk, and the increase in the HICP, although higher than usual, does not fundamentally change this distribution.

Therefore, according to AVOCAD lawyer Sandra Mickienė, taking into account established court practice and the current economic situation, businesses are advised to negotiate additional provisions at the time of concluding the contract that provide for exceptions to the general rules for applying the CPI or to set clear indexation "ceilings."

The annual and average annual changes in different indices can vary significantly – in some cases by more than double. This means that in cases where the rent is indexed according to the annual change, tenants may face a significantly higher rent increase than those whose indexation is linked to the average annual change. "When negotiating a contract, consider what indices the parties would choose and how these indices have changed in recent periods. Such a preliminary assessment helps to better understand the real impact that indexation may have on the rental price and the risks associated with different indices," advises S. Mickienė.

The lawyer also suggests an alternative solution – linking the rent amount to the costs of maintaining and servicing the premises. If these costs increase significantly during the lease period, a price review mechanism can be established in the contract. Such provisions allow for a more proportionate distribution of risks and avoid a disproportionate increase in rent during a sudden surge in inflation.