Category: Dispute Resolution

During a relationship, one partner may transfer money to the other for rent, medical treatment, daily necessities, beauty treatments, or other personal expenses. However, when the relationship ends, the question often arises as to whether such funds were transferred as a gift, financial support, or, after all, as a loan that must be repaid. It is important to distinguish between situations involving financial transactions between spouses and those involving financial relationships between individuals who live together and share a common household—in such cases, the legal assessment may differ. The situations relevant here are those in which the individuals had a close relationship but were not married, did not live together, and did not share a household.

Karolina Briliūtė, an attorney at the AVOCAD law firm, says that the mere fact that one person transferred or handed over money to another does not, in and of itself, create an obligation to return it. In the event of a dispute, the most important thing is to determine on what basis the funds were transferred and what both parties had agreed upon at the time. “A close relationship does not in itself mean that all the money transferred to a partner was a gift, nor that it was a loan. In a legal dispute, the fundamental question that must be answered is whether the funds were transferred with a clear agreement—or one implied by the circumstances—to repay them,” emphasizes K. Briliūtė.

A bank account for transfers alone may not be enough

The easiest situation is when the money was transferred via bank transfer and the payment description states “loan,” “I’m lending,” or another clear phrase. However, even such a record is not the only possible evidence. The couple’s correspondence via text messages, Messenger, WhatsApp, or email can be highly significant. For example, one partner asks to borrow money, the other agrees, and later the recipient writes that they will repay it once they receive their paycheck, asks for more time, or offers to repay the debt in installments. “The entire context is very important in disputes. Sometimes a single sentence in a conversation—such as a promise to repay the money—combined with bank transfers and the parties’ subsequent behavior can become significant evidence. Therefore, when a relationship ends, you shouldn’t rush to delete messages or other communications,” says an AVOCAD attorney. It may also be significant that the former partner has already repaid part of the money. Such behavior, together with other evidence, may indicate that the obligation to repay was acknowledged.

It is much more difficult to prove cases where money was transferred in cash and no document was signed.

In certain cases, the Civil Code requires that a loan agreement be in writing, and for larger amounts transferred in cash, it also requires notarization. Therefore, transferring a large sum of money “hand-to-hand” without any supporting documentation can later lead to serious problems in proving the transaction. “In the course of their relationships, people naturally do not always formalize their financial agreements with one another. However, the larger the amount transferred, the more important it is to leave at least a minimal written record—an agreement, a message, or confirmation that the money was received and will be repaid,” notes K. Briliūtė.

"Pay it back when you can" doesn't mean you won't have to pay it back

Another common situation is when money is lent, but no specific repayment date was agreed upon. According to the lawyer, this alone does not negate the right to demand repayment of the loan. The Civil Code provides rules for cases where the loan repayment deadline has not been set or where the money must be repaid upon demand. Therefore, in such a situation, one of the first practical steps should be to issue a clear written demand for repayment. It should specifically list the amounts transferred, the circumstances of the transfer, and demand repayment. “Phrases like ‘pay me back later’ or ‘when you can’ do not necessarily mean that the money was a gift. However, in the event of a dispute, you’ll again have to prove that the parties had agreed on a loan in the first place, which is why written communication becomes particularly important here,” explains K. Briliūtė.

Did you pay not to your partner, but on behalf of your partner?

The situation may be different when the money was never transferred to the partner’s account in the first place. For example, one person may have paid another’s rent, dental bills, veterinary bills, beauty treatments, or other service bills directly. In such cases, the legal basis for claiming the money is not necessarily a loan. The Civil Code provides for situations where one person fulfills another person’s obligation to their creditor. “If the documents clearly show that you used your own money to pay a specific obligation that another person was supposed to fulfill, there may be grounds to demand the return of these funds. However, in such cases, it must also be determined whether the payment was a gift, voluntary assistance, or some other form of payment made without compensation,” says the lawyer.

If it is determined that a monetary obligation exists and the debtor fails to fulfill it on time, the Civil Code allows for the recovery of interest in certain cases. When bringing a case to court, one may also request procedural interest on the awarded amount until the court’s decision is fully enforced. This means that a debtor who ignores a demand to repay a debt for a long time does not necessarily benefit—the final amount due may be greater than the amount that was originally owed.

What if your ex-partner has moved abroad?

Living abroad does not in itself mean that it is no longer possible to recover the money. If your former partner lives in another European Union country, the first step is to determine which country’s court has jurisdiction to hear the specific dispute. Depending on the circumstances, the simplified European Union cross-border claim procedures may also be applicable. “In such cases, practical information is crucial—where the person actually lives, where they earn their income, and where they hold assets. A court ruling is only one part of the process; for the creditor, its actual enforcement is also crucial,” notes K. Briliūtė.

What might the other side say?

Of course, there are two sides to every dispute. The person being asked to return the money may argue that no loan was ever made—that the funds were gifts, voluntary financial assistance, or personal expenses that the other person chose to cover of their own free will. Since this article deals with individuals who did not live together and did not maintain a joint household, the argument regarding “joint expenses of the couple” would not, in and of itself, be as clear-cut as it would be in the case of individuals living together. Nevertheless, each situation must be evaluated on a case-by-case basis.

It may be significant from the debtor’s perspective that the transfers never specified “loan” as the purpose, the correspondence did not mention repayment, and the person who transferred the funds did not ask for them to be repaid for a long time.

Therefore, according to K. Briliūtė, in cases of this nature, it is generally not enough for the court to simply see a long list of transfers on a bank statement. “The key question is usually not whether the money was transferred, but whether it can be proven that it was transferred with an obligation to repay it. This is precisely where a gift, voluntary financial support, and a civil obligation differ,” summarizes the AVOCAD attorney.

Therefore, clarity is of the utmost importance in such situations. Bank transfers, their purpose, correspondence, accounts, receipts confirming receipt of funds, and repayment agreements can be of crucial importance in determining whether the money transferred to a former partner was legally a gift or a debt to be repaid.

To many, an administrative fine seems like the end of the process: the agency has issued a decision, and the individual is left with the choice of either paying the fine or appealing to court. In practice, however, there is a third option—the authority that imposed the fine, upon receiving the individual’s appeal and evaluating their arguments, may acknowledge its mistake and revoke the unfounded decision before the dispute reaches court.

According to Dainius Antanaitis, an attorney at AVOCAD, this option is important not only for the person facing administrative liability but also for the institution itself, as it helps avoid unnecessary legal proceedings and the associated financial consequences.

From the report to the fine—a few important steps

Administrative offense proceedings typically begin when an official draws up a report of an administrative offense. The case is then heard, and the person subject to administrative liability must be duly informed of the time and place of the hearing.

Both during the preparation of the report and during the examination of the case, the individual has the right to provide explanations, evidence, and arguments as to why they disagree with the violation they are accused of. If the authorities are not convinced by these, a decision is issued and an administrative penalty is imposed. “The imposition of a fine should not be a mere formality at the end of the procedure. When issuing a decision, the authority must have assessed all relevant circumstances and have sufficient grounds to establish the violation. Otherwise, an erroneous decision may result not only in its reversal in court but also in additional costs for the state,” says Dainius Antanaitis, an attorney at AVOCAD.

If the case is won, the party may claim reimbursement of court costs. Upon receiving the decision, the individual essentially has two main options: to accept the imposed penalty or to appeal it. If the dispute reaches court and the person succeeds in proving that the administrative offense proceedings against them should be terminated, they are also entitled to reimbursement of litigation costs from the state. Therefore, according to D. Antanaitis, a government agency’s decision to continue a dispute—even when the arguments presented in the complaint reveal obvious flaws in the initial ruling—can have a concrete financial cost. “If an agency realizes that its decision was unfounded, it is not rational to wait—merely as a formality—until a court confirms this. Legal proceedings cost time and money not only for the individual but ultimately for the state as well,” the attorney notes.

An agency may correct its own error

An important detail: an appeal against a decision rendered out of court in an administrative offense case must be filed with the court through the authority that issued the decision.

It is precisely at this stage that the agency has the opportunity to reassess its decision and the arguments presented by the individual. “Upon receiving a complaint, the agency is not required to automatically forward it to court and await the judge’s verdict. If the arguments in the complaint are well-founded, the agency has the option of revoking its own decision. In other words, the law provides an opportunity to correct the error even before judicial proceedings begin,” explains D. Antanaitis.

If the agency disagrees with the complaint, it is referred to a court for review. However, if it is determined that the fine was imposed unjustifiably, the error can be corrected much more easily.

 Admitting a mistake may be cheaper than defending it in court

 In Antanaitis’s view, such a procedure should encourage institutions to view complaints they receive not as a mere formality to be forwarded to the court, but as a real opportunity to reexamine the legality and validity of their decision. “An agency that realizes it imposed a fine unjustifiably can correct its own mistake—without going to court. This is not only faster for the individual but also more rational for the state itself: it avoids unnecessary litigation and a potential obligation to reimburse the individual for court costs,” summarizes AVOCAD attorney Dainius Antanaitis. Sometimes the best course of action for an agency is not to defend a decision at any cost, but to acknowledge in a timely manner that it was unfounded and to correct the error before it escalates into a legal dispute.

For many drivers, car warranty service is associated with safety and trust. It’s only natural to expect that a vehicle entrusted to an authorized dealership will be professionally inspected, repaired, and returned in the same condition as when it was dropped off. But what should you do if, while the car is in for warranty service, it is involved in a traffic accident and is damaged by a service center employee?

The Supreme Court of Lithuania recently examined precisely this type of situation. In the case, a consumer took a new car to an authorized service center for a warranty inspection of the brake system. During a test drive on the street, a service center employee was involved in a traffic accident, and the car was damaged. The consumer decided that he no longer wanted the car, unilaterally terminated the sales contract, and demanded a full refund of the purchase price as well as compensation for damages.

However, the court did not agree with this position. As Mantas Baigys, an attorney with the AVOCAD law firm, points out, this ruling clearly distinguishes between two situations that are often confused—the application of a guarantee and compensation for damages.

“If a car has a manufacturing defect or some other quality issue, the consumer can exercise the rights provided by the warranty. However, if the car was damaged after it was delivered to the buyer—even during warranty service—the warranty terms alone no longer cover such a situation,” says M. Baigys.

In this case, the courts determined that the car was delivered to the buyer in good condition. The defects that arose later were not related to a manufacturing defect or a defect covered by the warranty—they were caused by a traffic accident resulting from the actions of a service center employee. Therefore, according to M. Baigio, such a dispute should be assessed primarily not as a problem with the quality of the item sold, but as a matter of compensation for damages.

What can a car owner demand?

 Although the consumer in this case was unsuccessful in his claim to terminate the sales contract and recover the full price of the car, this does not mean that he is left without protection. The service center is liable for the actions of its employees; therefore, in such cases, a claim for compensation for the damages incurred may be filed. “The court essentially ruled that the service center cannot avoid liability. However, this liability arises not because the warranty was breached, but because damage was caused to another person’s property. In such cases, the consumer has the right to demand full compensation for the damages,” comments M. Baigys. In practice, this may include car repair costs, a decrease in market value, the cost of a rental car, or other losses incurred as a result of the incident. In each case, it is important to assess whether the proposed solution truly compensates for all the damages incurred, rather than just the most obvious repair costs.

According to M. Baigio, in such situations, one should not rush to sign documents confirming that there are no further claims against the service provider. “If this is a matter of compensation for damages, the consumer has the right to demand full compensation for their losses. Therefore, before accepting an offer from a service center or insurance company, it’s worth making sure that it covers not only the car repairs but also other actual consequences,” the attorney notes.

The most important thing is to choose the right way to protect your rights

 This ruling by the Supreme Court of Lithuania is significant because it serves as a reminder that the mere fact that a car was damaged during warranty service does not, in and of itself, entitle the buyer to rescind the purchase and sale agreement and demand a full refund of the price paid for the car. If the car was of satisfactory quality at the time of sale and the damage was caused by a subsequent traffic accident, the dispute should generally be resolved through a claim for damages.

On the other hand, this does not mean that the consumer must accept any offer made by the service provider. By entrusting their car to a professional service provider, the consumer has a reasonable expectation of getting it back safe, in good working order, and without any loss of value due to the service provider’s actions. Therefore, the damage caused by the service provider must be assessed realistically, and the compensation must be adequate. “In such situations, what matters most is not an emotional decision, but a carefully chosen legal course of action. A demand for a full refund of the car’s purchase price may seem logical to the consumer, but legally it may not necessarily be justified. Meanwhile, a properly formulated claim for damages can be significantly more effective,” concludes M. Baigys.