Amending a contract in Lithuania: annex or new contract, and in writing?

A contract is amended by agreement of the parties. The amendment must take the same form in which the contract itself had to be concluded, unless the law or the contract provides otherwise. If a written contract says it may be changed only in writing, it cannot be changed in any other way. Whether you call it an annex, a supplementary agreement or a restated version of the whole contract is not decided by the law – it is a practical choice. The parties can also sign separate copies: an exchange of separate documents between the parties also meets the written form.

Whether terms agreed by email have the same force as a signed contract, and what applies if the contract was signed by someone without authority, we have already answered in the FAQ on contracts (in Lithuanian). This article is about the amendment itself.

Annex, supplementary agreement or restated contract

Article 6.223(1) of the Civil Code of the Republic of Lithuania (CK) says only that a contract may be amended by agreement of the parties. The law does not say what that agreement must be called or how it must be set out.

Two methods are used in practice, and both are equally valid:

• a supplementary agreement (annex) that changes only the clauses concerned, while everything else stays as it was;
• the whole contract restated in a new version. The original contract number, date and, where relevant, start date are kept. Below the date you add, for example: “Contract restated in a new version with effect from [date]”.

Our advice is simple. When one or two clauses change, an annex is enough. When many annexes have built up, or the contract is based on an old template, it is worth restating it. Then one text applies and nobody has to work out the order of the annexes.

A completely new contract with a new date makes sense when you really want to start the relationship afresh. In that case you also need to agree how the old contract ends. An obligation may end by agreement of the parties, but if the contract had to be in writing, that agreement must also be in writing (Article 6.125(1) of the Civil Code, CK Article 6.125(1)).

We covered changes to employment contracts separately in our article on changing employment terms.

When a party to the contract changes

A client moving its business to another of its companies asked whether its customer contracts had to be signed again. There are two routes.

The first is a three-party agreement: the old party, the new party and the customer agree that the new company takes over all obligations. For the customer it is usually easier to read and sign one page than to renegotiate the whole contract with its own lawyers. But agree expressly whether the new company also takes over liability for the earlier period. If it should not, say so in the agreement. The law allows a third party to take over the debtor’s obligations and rights under a contract with the creditor (Article 6.115 of the Civil Code, CK Article 6.115). Without the creditor’s consent, a debtor cannot transfer its debt to someone else (Article 6.116(1) of the Civil Code, CK Article 6.116(1)). So it cannot be done without the customer’s consent: the customer either signs the three-party agreement or gives its consent. Consent may also be given in advance (CK Article 6.116(2)). A debt transfer agreement must be in writing (Article 6.118 of the Civil Code, CK Article 6.118).

The second is to terminate the old contracts and sign new ones. The termination agreement then needs to settle accounts, for example who gets advances already paid.

Which route to choose is often decided not by the law but by what suits the other side. We usually suggest discussing it with the customers first and only then preparing the documents.

Does the amendment have to be signed in writing?

The main rule is in Article 6.192(4) of the Civil Code (CK Article 6.192(4)). An amendment or addition must take the same form in which the contract had to be concluded, except where the law or the contract provides otherwise. The general rules on the form of transactions apply to the form of contracts (CK Article 6.192(1)).

Written form is mandatory, for example, for insurance contracts, arbitration agreements, leases of movable property for more than one year and preliminary contracts (Article 1.73(1) of the Civil Code, CK Article 1.73(1)). An amendment to such a contract must also be in writing.

Even more important is what you wrote in the contract itself. If a written contract contains a clause that it may be amended, supplemented or terminated only in writing, it cannot be changed in any other way (Article 6.183(1) of the Civil Code, CK Article 6.183(1)). If the parties agreed on a particular form, the contract is treated as concluded only when that form is followed (CK Article 6.192(5)). The parties can also set additional requirements, for example the signatures of particular persons. If these are not met, the transaction is treated as not concluded, unless agreed otherwise (CK Article 1.73(3)).

So if the contract says a deadline may be changed “by a prior written agreement forming an annex to this contract”, sign that annex.

Transactions connected with the performance of a written contract may also be made orally, if this does not conflict with the law or the contract (Article 1.72(2) of the Civil Code, CK Article 1.72(2)). But a “changes only in writing” clause can protect against that too. There is also the reverse risk: a party may lose the right to rely on this clause because of its own conduct, if the other party acted in reliance on that conduct (CK Article 6.183(2)).

What happens if the mandatory written form is not followed? The transaction is invalid only where the law expressly says so (Article 1.93(1) of the Civil Code, CK Article 1.93(1)). But in a dispute the parties cannot rely on witness evidence to prove that the transaction was concluded or performed (CK Article 1.93(2)). In practice, this means an amendment agreed orally will be hard to prove. The court may disapply this bar, for example where there is other written, even if indirect, evidence, such as correspondence (CK Article 1.93(6)(1)).

A contract in notarial form can be amended only in notarial form (CK Article 6.183(3)). Where the notarial form is required by law, failing to follow it makes the transaction invalid (CK Article 1.93(3)). We wrote about which contracts must be notarised in a separate article (in Lithuanian).

An annex to a contract that has already expired

A common situation: the contract ran until the end of the year, the work continues, and the other side sends an “annex” to the contract that has already ended.

First, check what the contract says about how it ends. The contract or the law may provide that the end of the contract’s term also means the end of the parties’ obligations under it (Article 6.189(3) of the Civil Code, CK Article 6.189(3)). The end of the term does not release the parties from liability for breaches already committed (CK Article 6.189(4)).

In our view, if the contract has already ended, it is safer not to “amend” it but to sign a new agreement that clearly states that the contract is renewed or extended, and from which date. The law allows the parties to agree that a contract applies to their relations that arose before it was concluded (CK Article 6.189(2)). This way the period between the end of the old contract and the new agreement can also be covered. It is best to sign the extension before the term ends.

Can the parties sign separate copies?

Yes. A transaction in written form is concluded either by drawing up one document signed by all parties or by the parties exchanging separate documents. Documents signed by the parties and sent by electronic means count as written documents, if the text is protected and the signature can be identified (CK Article 1.73(2)). For contracts, Article 6.192(2) of the Civil Code repeats the same (CK Article 6.192(2)).

The transaction must be signed by the persons who concluded it (Article 1.76(1) of the Civil Code, CK Article 1.76(1)). If the contract was concluded using telecommunications terminal equipment, there must be enough data to identify the parties. If there is not, the parties cannot rely on witness evidence in a dispute (CK Article 1.76(2)).

In practice, this means each party can sign its own copy and exchange it. Our recommendations:

• the text of all copies must be identical, with all annexes;
• it is worth stating in the contract that it may be signed in separate counterparts and that together they form one contract;
• keep proof that the copies were exchanged, for example the email with the signed copy.

It is different with documents we file with the register. In our practice, incorporation documents filed with the register are signed so that all signatures are on the same document. So when we ask clients to send several copies, we mean several separately printed documents, each signed separately by all signatories. What the register accepts is covered in our article on company documents the register will not accept.

You can also sign with an electronic signature. The legal effect of an electronic signature cannot be denied solely because it is electronic (Article 25(1) of Regulation (EU) No 910/2014). A qualified electronic signature has the equivalent legal effect of a handwritten signature (Article 25(2) of Regulation (EU) No 910/2014). If one party signs by hand and the other electronically, agree in advance how you will exchange the copies. More on this in our article on signing electronic documents (in Lithuanian).

How to start

Send us the current contract with all annexes and briefly tell us what you want to change. We will suggest whether an annex is enough or a restated version is worth it, and prepare the document for signing.

Phone +370 5 212 1506, email info@linden.lt

More about this service: contractual disputes.