An Attorney-at-Law of Vilnius Law Firm SPES defended the client’s interests in a dispute regarding compensation for losses upon conclusion of a replacement contract.
The client was sued for alleged losses due to non-fulfilment of the contract, as a result of which the claimant had to enter into a replacement contract. An Attorney-at-Law of the Firm proved to the Court that there was no contract concluded between the client and the claimant, he did not accept the order submitted by the claimant, and the negotiations between the parties cannot be recognized as the conclusion of a contract.
The court that examined the case explained that the following conditions are necessary to obtain the right to compensation for losses caused by the conclusion of a replacement contract: 1) the aggrieved party must terminate the original contract; 2) this contract must be terminated due to a breach (failure) by the other party; 3) the aggrieved party must enter into a replacement contract with the third party; 4) the replacement contract must be concluded within a reasonable time. Under all of these conditions, the injured party can demand the price difference between the original and replacement contract and compensation for other subsequent losses from the original contractor (the party that breached the contract).
The Court recognized that the claimant did not prove compensation for losses due to the totality of the conditions of the conclusion of the replacement contract (Article 6.258 of the Civil Code), i. e., stated that the claimant did not conclude the contract with the Firm’s client and thus did not terminate it, therefore the Court did not recognize the contract concluded with the third party as a replacement and recognized the claim for compensation as unfounded.
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