- Supreme Court of Lithuania
- Lietuvos kariuomene v. UAB
ADMINISTRATIVE CONTRACTS - SALES CONTRACT - BETWEEN THE LITHUANIAN ARMY AND A LITHUANIAN COMPANY - REFERENCE TO UNIDROIT PRINCIPLES AS MEANS OF INTERPRETING APPLICABLE DOMESTIC LAW (LITHUANIAN LAW)
REPLACEMENT TRANSACTION - REFERENCE TO ARTICLE 7.4.5 OF UNIDROIT PRINCIPLES AS MEANS TO INTERPRET ARTICLE 6.258 OF THE LITHUANIAN CIVIL CODE
Plaintiff, the Lithuanian Army, entered into a contract with Defendant, a Lithuanian company, for the supply of military uniforms. Defendant delayed the supply of the uniforms and delivered uniforms partly not conforming to quality specifications in the contract, prompting Plaintiff to enter into a replacement transaction with a third party, and to request from Defendant payment of the difference between the contract price and and the price of the replacement transaction.
In deciding in favour of Plaintiff, the Supreme Court pointed out that neither in Article 7.4.5 of UNIDROIT Principles nor in Article 6.258 of the Lithuanian Civil Code it is said that the replacement transaction has to be identical to the original contract, it's only being required that the replacement transaction would replace the original contract from an economic perspective, i. e. achieve the objectives of the original contract, and that it takes place after the termination of the original contract but within a reasonable time taking the circumstances of the case into account.