Law of obligations

An iTiesības article (author Anete Bože, law firm Ellex Kļaviņš) on how a company should act when a manifestly unfounded claim has been brought against it in court. It notes that even an unfounded claim must be examined on the merits (Supreme Court Senate decision SKC-881/2025), so the defendant must take an active part in the proceedings, as the claimant may request security for the claim under Section 138 of the Civil Procedure Law (attachment of property, restrictions on activities). The article is paywalled; the introduction is available.

In an e-consultation, the State Labour Inspectorate explains whether an employer may require paid training before concluding an employment contract and then bind the employee for 2–5 years. Section 96 of the Labour Law (an agreement on professional training for no longer than two years, proportionate to the expenses) applies only to training during an already existing employment relationship. The law makes no specific provision for training before a contract is concluded; if the parties agree on repayment of expenses in the event of early termination, this is a private-law dispute to be decided by a court.

An e-consultation on a flat being flooded due to the manager's negligence, where the manager has not drawn up a damage report within a week and does not reply to the submission. Legislation sets no specific deadline for drawing up a flooding report; the manager's duties are determined by the management contract and the community's decisions, as well as Cabinet Regulation No. 907 on the inspection and technical maintenance of residential buildings. A claim for damages may be brought in court at any time if negligence can be proven; it is advisable to document the damage (photos, expert assessment) and send a written warning with a 7-day deadline for a reply.

On 1 September the Official Gazette (Latvijas Vēstnesis, No. 167) published the amendments to the Consumer Rights Protection Law adopted by the Saeima on 20 August, which enter into force on 15 September (some provisions on 20 November; language requirements must be met by 30 June 2027). New definitions are introduced (creditor, credit intermediary, deferred payment service, tying practice), offering credit without the consumer's express request is prohibited, creditworthiness assessment is strengthened using verified income data and credit information bureaus, and reasonable forbearance measures are set out in the event of payment arrears. Large companies providing deferred payment services must register in the PTAC register; restrictions on remuneration policies for creditors' employees and intermediaries are set, and the withdrawal period for distance contracts is extended where information has not been provided.

The Supreme Court Senate overturned a conviction and terminated criminal proceedings for misappropriation against a company's authorised representative who received goods from a German supplier but did not pay the invoice in full. As the parties had not agreed on the moment of transfer of ownership, German law applied, under which the goods became the buyer's property upon delivery – so the person was dealing with their own company's assets. A dispute over an unpaid invoice is to be resolved in civil proceedings, not criminal proceedings.

Latvia's Financial Intelligence Unit (FID) reminds that following EU sanctions against the "MERE" retail chain (linked to Sergey Schneider), suppliers have, under a general administrative act issued August 6, been allowed to reclaim their goods from the frozen stores without separate FID approval, provided sanctions conditions are met. Goods that have lost economic value must be handled under other applicable rules, including food-safety requirements; the recovery process practically began on August 7.

LV portāls explains consumers' 14-day no-reason withdrawal right from consumer credit agreements, requiring repayment of principal and interest within 30 days. Creditors cannot charge penalties for withdrawal except unreimbursed state fees, with exemptions for loans under €140, overdrafts and interest-free credit.

A law published on 25 August lets the state, as airBaltic's shareholder, creditor and bondholder, apply up to four stabilisation measures for AS "Air Baltic Corporation" — extending a 30-million-euro state loan, converting it into equity, converting up to 50 million euros of state-held bonds, or buying up to 30 million euros of new bonds. The Cabinet decides which measures to use, with quarterly reporting to the Saeima's Budget and Finance Committee. The law entered into force on 26 August.

The consultation explains that co-owners have a two-month right of first refusal when a share is sold to an outside party. If co-owners cannot agree on dividing shared property, any of them may petition a court to terminate joint ownership under Civil Law Section 1074, with the court able to award separate plots, compensation, a sale, or a lottery.

On 20 August, Prosecutor General Armīns Meisters petitioned the Constitutional Court over two Cabinet of Ministers protocol decisions that had instructed the Agriculture Ministry to adjust prices in long-term contracts between state forestry company "Latvijas valsts meži" and private timber buyers for softwood logs from 2024 onward. The Prosecutor General argues the government, without statutory authorisation, allowed state property to be sold below the prices set in existing civil contracts, in breach of the Constitution.

An e-consultation on LV portāls addresses a case where a municipality, when subdividing a plot for a new house, refused to allow use of an existing easement road and instead required a new 5.5-metre easement across a neighbour's land, costing the owners around €25,000. The response explains that newly created land plots must have documented access to a road or street under applicable regulations, and unresolved easement disputes can be settled through the courts.

On August 20 the Saeima adopted amendments to the consumer rights protection and credit information laws letting residents register with credit bureaus a refusal to borrow, which lenders will then have to respect when assessing applications. The law also curbs unsolicited credit offers, sets requirements for remote lending and disclosure of AI-personalised offers, and introduces a new home-equity loan product capped at 70% of property value. It further extends registration requirements to credit intermediaries and large deferred-payment providers.

The Latvian Traders' Association (LAT) is urging the Finance Ministry to treat losses linked to international sanctions as force majeure, allowing suppliers to write them off as business expenses without triggering corporate income tax. If suppliers must write off roughly EUR 1.8 million in unpaid goods as bad debt, current rules could impose an additional tax of about 25% on the uncovered amount. LAT president Henriks Danusevics says that without changes, suppliers lose not only the debt itself but also pay tax on it.

The article explains "STOP Credit," a Credit Information Bureau service anyone can activate to block new loans being taken out in their name, guarding against both impulsive borrowing and identity theft. Lifting the block requires a 72-hour waiting period meant to blunt pressure from scammers. Latvia's Civil Law, Article 1587, is cited as the basis for a borrower's duty to repay even when victimized by fraud.

The piece explains that core terms of risk insurance (property, motor) and life insurance contracts can only be changed by mutual agreement of both parties. Contracts can be ended by written agreement taking effect 15 days after notice, or when the insurable interest lapses or ownership changes. On termination, insurers refund the unused premium minus a 15% administrative deduction.

In Riga's Imante district, a tenant repeatedly flooded neighboring apartments, and after the lease ended the landlord, Arturs, demanded the tenant vacate within two weeks — which the tenant refuses, denying fault. Attorney Janis Berovskis explains liability could fall on either owner or tenant depending on the accident's cause: the owner must maintain the flat so it causes no harm to neighbors, while the tenant answers for negligence. Where parties cannot settle, the dispute goes to court, and insurers are already pursuing the landlord for the neighbor's damages.

airBaltic bondholders agreed to capitalize interest payments due 14 August and 14 November — adding them to the bond principal instead of cash payment — allowing the state airline to avoid declaring insolvency. Investors also temporarily waived minimum liquidity requirements until 14 November. Quarterly interest obligations total EUR 13.775 million, tied to a 2024 bond issue of EUR 380 million at 14.5% annual interest.

The explainer notes co-ownership can end by co-owners voluntarily agreeing before a notary, who drafts a division agreement filed with the Land Register, or through the courts if agreement fails. Courts may assign physical shares, award the property to one owner with compensation to others, order a sale, or use a lottery. The basis is Civil Law Articles 1074 and 1075.

The article explains that before issuing a policy, insurers must identify the client's needs and prepare a proposal detailing covered risks, exclusions, premium and deductible, plus provide the contract terms and a comparable product information document. From 1 July 2026 policies must clearly mark both covered and excluded risks, while a plain-language requirement for terms phases in during 2027-2028.