We draft contractual documentation and advise businesses on complex outsourcing arrangements: outsourcing of contruction services, outsourcing of IT work, outsourcing of real estate management, outsourcing of business processes, profesional services, etc.
When entering into an outsourcing agreement, parties normally agree on the scope of work, services included and excluded from the contract, modification of service levels after the change of circumstances, results, auxiliary terms and conditions, service level and remedies, roles and responsibilities, rewards, milestones, and project schedules, etc. We advise clients on all of these matters. Typically, the disputes regarding outsourcing arrangements arise when:
Knowledge & Insights
Lithuanian law treats outsourcing arrangements as so-called contracting agreement, according to which a contractor covenants to undertake specific work at its sole risk, and a client agrees to accept specific work and pay for it. Unless parties agree otherwise, the material for proper fulfillment of the assignment must be supplied by a contractor. The remuneration for contracting can be structured differently; however the dominant practice is that the agreement should include a fixed price arrangement. Additional work must be negotiated as a contract change. On the other hand, it is not prohibited that a contractor will do everything listed for an agreed price; additional work outside the agreed scope will be billed at the agreed hourly rates (so-called "time and material arrangement"). Such arrangements have to checked on a case-by-case basis with regards to their compliance with the Lithuanian laws, because by reason of the Lithuanian Civil Code a contractor is not permitted to increase the price, and a client is not permitted to reduce the agreed price, unless these provisions of the Lithuanian Civil Code are expressly contracted out.
Servicing and management
If the outsourcing concerns non-material (intellectual) objects or such other services that do not result in producing a material objects and transfer of assets, such arrangements are understood as servicing arrangements by reason of the Lithuanian Civil Code. Servicing agreement covers such typical arrangements as auditing services, consultancy services, personal health supervision, veterinary, information, information, teaching, tourism and other services for consideration. Servicing agreement can also be concluded when a company is willing to outsource management of business processes, for example, human resources related services, training of workforce, staffing of administration, back-office operations.
Šulija Partners Law Firm Vilnius, registered office Jogailos street 4, 3rd floor, Vilnius, LT-01116, Lithuania, fax +370 52051926, e-mail: info@SulijaPartners.com
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