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“High standards of professional work.” (IFLR1000, 2017)

17.03.2021

Rimantė Valiulienė. Who – the buyer or the seller – must prove the fact of payment?

On 24 February 2021, the Extended Chamber of Judges of the Civil Cases Division of the Supreme Court of Lithuania adopted a ruling (No. e3K-7-125-378/2021), which changed its previous practice regarding the distribution of the burden of proof between the buyer and the seller. According to the previous practice, it was recognized that in the absence of an agreement between the parties on the terms of payment of the price, the price is considered to have been paid by the buyer at the time of the transfer of an item (Article 6.314 (2) of the CC). Accordingly, the seller who claimed that the buyer had not settled with him under the sales agreement, had to prove such claims. Now, in the above-mentioned ruling, the Supreme Court of Lithuania has stated that such practice is changeable by establishing that the sales agreement does not confirm that the parties have fulfilled their mutual obligations. As a result, it is the buyer who must prove the fact of settlement with the seller, not on the contrary.

In the case examined by the court, the seller asked the court to award a debt from the buyer under the sales agreement of the vehicle. The seller claimed that the buyer did not have enough money to pay for the car at the time of concluding the sales agreement. Therefore, the parties agreed to defer payment for one month, later extended the payment deadline, but the buyer still did not pay the seller. The buyer claimed in the case that he had paid for the car in cash but did not provide any evidence.

The court clarified in the case that the conclusion of a sales agreement and its performance are two different facts that must be proved separately. The fact that the buyer had an obligation to the seller does not in itself mean that the buyer has fulfilled that obligation. Thus, in the event of a dispute over the payment of the price of the item purchased, it is for the buyer to prove that he has paid the price. The fact that the seller transferred an item to the buyer confirms that he has fulfilled his contractual obligation, but this does not in itself mean that the buyer has fulfilled his obligation to pay for the item purchased.

The buyer may rely on all means of proof (e. g. witness statements, written evidence, etc.) to prove that he has paid for the item purchased. Therefore, it is advisable for the buyer who wishes to pay for the purchased item in cash to require the seller to issue a receipt for the payment of the price. Otherwise, in the event of a settlement dispute, the court may require the buyer to settle a second time, even after actual settlement with the seller, as the buyer’s oral statements about settlement might be considered insufficient evidence.


Commentary by PRIMUS Dispute Resolution Practice Group:
Rimantė Valiulienė, associate
rimante.valiuliene@primus.legal

 

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