Law on Obligations and Contracts
(Закон за задълженията и договорите)
This page contains an unofficial English-language translation of the Law on Obligations and Contracts of the Republic of Bulgaria, reflecting the denomination of 5 July 1999 and all amendments as promulgated in the State Gazette up to and including:
The Act was originally promulgated in:
and has since been amended and supplemented on numerous occasions, as listed in the official Bulgarian text.
Only the Bulgarian-language version published in the State Gazette constitutes the legally binding text.
(Prepared on behalf of Black Sea Law Counsel / BSLC)
This English-language translation of the Law on Obligations and Contracts of the Republic of Bulgaria is unofficial and has been prepared exclusively for informational, educational, and reference purposes.
The translation is intended to assist foreign nationals, international professionals, academics, judges, arbitrators, legal practitioners, and English-speaking residents in understanding the structure, terminology, and core principles of Bulgarian contract and obligations law, including:
This document does not have legal force and does not replace the official Bulgarian-language version of the Act as promulgated in the State Gazette of the Republic of Bulgaria.
In the event of any discrepancy, inconsistency, omission, or divergent interpretation between this translation and the official Bulgarian text, the Bulgarian-language version shall prevail.
Although every effort has been made to ensure accuracy, terminological consistency, and faithful rendering of civil-law legal concepts, Black Sea Law Counsel (BSLC) expressly disclaims any and all liability for:
This translation is provided solely for orientation and reference purposes.
Users of this translation are strongly advised to:
Use of this translation is entirely at the reader’s own risk.
(Consolidated version reflecting amendments up to State Gazette No. 35 of 27 April 2021)
The Law on Obligations and Contracts of the Republic of Bulgaria
(Bulgarian: Закон за задълженията и договорите, hereinafter referred to as the Law on Obligations and Contracts, the Contracts and Obligations Act, or the Act) was promulgated in the State Gazette of the Republic of Bulgaria
(Bulgarian: Държавен вестник, hereinafter referred to as the State Gazette or SG).
The Act was originally promulgated in:
The Law on Obligations and Contracts entered into force on the date specified in its promulgation, namely 22 November 1950, unless specific provisions provided otherwise.
All subsequent amendments, supplements, and repeals entered into force either:
The present consolidated text reflects the denomination of the Bulgarian lev as of 5 July 1999, as officially adopted and reflected in the State Gazette.
All monetary values originally expressed in pre-denomination levs have been adjusted accordingly in the consolidated Bulgarian text on which this translation is based.
Since its initial promulgation, the Law on Obligations and Contracts has been amended and supplemented numerous times, reflecting:
The latest amendment reflected in this translation is published in:
The State Gazette of the Republic of Bulgaria is the official publication in which:
acquire binding legal force.
Only the Bulgarian-language text published in the State Gazette constitutes the official and legally binding version of the Law on Obligations and Contracts.
This English translation is based on the consolidated version of the Law on Obligations and Contracts, as amended and supplemented up to State Gazette Issue No. 35 of 27 April 2021.
The translation:
(Civil-Law Context of Obligations and Contracts)
Bulgarian obligations and contract law forms part of the continental civil-law tradition, drawing heavily on Roman law (ius civile) and its modern codifications. Core concepts such as obligation, debtor, creditor, performance, fault, damages, and nullity do not always correspond precisely to their apparent English-language counterparts.
In particular:
Accordingly, the terminology used in this translation aims to preserve the systematic logic of Bulgarian civil law, even where this departs from everyday or common-law usage.
(Repealed — SG No. 12 of 1993)
(Repealed — SG No. 27 of 1973)
(Repealed — SG No. 12 of 1993)
(Repealed — SG No. 12 of 1993)
(Repealed — SG No. 12 of 1993)
(Repealed — SG No. 12 of 1993)
(Repealed — SG No. 12 of 1993)
(Amended — SG No. 12 of 1993)
A contract is an agreement between two or more persons for the purpose of creating, regulating, or extinguishing a legal relationship between them.
Persons exercise their rights in order to satisfy their interests.
They may not exercise these rights in contradiction with the interests of society.
(Amended — SG No. 12 of 1993)
The parties may freely determine the content of the contract insofar as it does not contradict mandatory provisions of the law and good morals.
(Paragraph 2 repealed — SG No. 12 of 1993)
(Paragraph 1 repealed — SG No. 83 of 1999, in force from 01.01.2000)
Interest may be agreed up to an amount determined by the Council of Ministers.
If the agreed amount is higher, it shall be reduced by operation of law to that amount.
Capitalisation of accrued interest shall take place in accordance with the regulations of the Bulgarian National Bank.
(Repealed — SG No. 12 of 1993)
(Amended — SG No. 12 of 1993)
In conducting negotiations and concluding contracts, the parties shall act in good faith.
Otherwise, they shall owe compensation.
The offeror is bound by the offer until the expiry of the period determined therein or ordinarily required, according to the circumstances, for the acceptance to arrive.
If the offer is withdrawn, it shall have no effect where the notice of withdrawal arrives before or at the latest simultaneously with the offer.
In the absence of a period for acceptance, an offer made to a present person loses its effect if it is not accepted immediately, while an offer made to an absent person loses its effect after the expiry of such time as is ordinarily required, according to the circumstances, for the acceptance to arrive.
Acceptance has no effect if the notice of its withdrawal reaches the offeror before or at the latest simultaneously with it.
If it is apparent from the late-arriving acceptance of the offer that it was sent in due time, the contract shall be deemed concluded unless the offeror immediately notifies the other party that he considers the acceptance to be late.
The contract shall be deemed concluded at the moment when the acceptance reaches the offeror.
If after dispatch of the acceptance one of the parties dies or enters into a condition constituting grounds for being placed under interdiction, the contract shall be deemed concluded.
The contract shall be deemed concluded at the place where the offer was made.
(Repealed — SG No. 12 of 1993)
(Paragraph 1 amended — SG No. 12 of 1993)
Where the offer includes general terms and conditions, acceptance shall be valid if it contains written confirmation of the general terms and conditions.
In case of inconsistency between individually stipulated clauses and clauses contained in the general terms and conditions, the former shall prevail, even if the latter have not been deleted.
In contracts with continuous performance, amendment or replacement of the general terms and conditions shall have effect with respect to the other party under an existing contract only if it has been notified thereof and if it has not stated in writing, within a sufficient period granted to it, that it rejects them.
If the parties conceal the agreement concluded between them by means of a sham agreement, the rules concerning the concealed agreement shall apply, provided that the requirements for its validity are present.
Rights which third persons have acquired in good faith from the acquirer under the sham agreement shall be preserved, except where rights over immovable things are concerned and were acquired after registration of the claim for establishment of the sham nature.
This rule shall also apply with respect to creditors of the acquirer under the sham agreement who have imposed attachment or distraint on the subject matter to which it relates.
Contracts for the transfer of ownership or for the establishment of other real rights over immovable things shall be concluded by notarial deed.
The preliminary contract for conclusion of a specific final contract for which notarial or notarised form is required shall be concluded in written form.
The preliminary contract shall contain agreements regarding the essential terms of the final contract.
Each of the parties to the preliminary contract may bring an action for conclusion of the final contract.
In such case, the contract shall be deemed concluded at the moment when the judgment enters into legal force.
In interpreting contracts, the actual common will of the parties shall be sought.
Individual clauses shall be interpreted in connection with one another, and each clause shall be understood in the sense arising from the contract as a whole, having regard to the purpose of the contract, customary practice, and good faith.
(New — SG No. 12 of 1993)
Contracts shall have the force of law for those who have concluded them.
Contracts may be amended, terminated, rescinded, or revoked only by mutual consent of the parties or on grounds provided by law.
A contract shall produce effects between the parties, and with respect to third persons — only in cases provided by law.
Third persons who in bad faith obstruct performance of the contract shall owe compensation.
A contract may also be concluded for the benefit of a third person.
The stipulation in favour of a third person may not be revoked once that person has declared to the promisor or the stipulator that it wishes to avail itself thereof.
The stipulator may reserve the right to revoke the stipulation or to substitute the third person.
The promisor may raise against the third person the defences arising from the contract, but not defences arising from other relations with the stipulator.
If the contract from which the third person derives its right is revoked upon an action by the creditors of the stipulator, the third person shall be obliged to return only that which the stipulator has given under the contract.
A person who has promised the obligation or act of a third person shall be obliged to compensate the other party if the third person refuses to assume the obligation or fails to perform the promised act.
In contracts for the transfer of ownership and for the establishment or transfer of another real right over a specifically determined thing, the transfer or establishment shall occur by virtue of the contract itself, without the need for delivery of the thing.
In contracts for the transfer of ownership over things determined by kind, ownership shall be transferred once the things are individualised by agreement of the parties, and in the absence thereof — upon their delivery.
The effect of the contract or its termination may be made dependent on a future uncertain event.
The condition shall be deemed fulfilled if the party who has an interest in its non-fulfilment has in bad faith prevented its occurrence.
Fulfilment of the condition shall have retroactive effect.
(Paragraph 1 amended — SG No. 12 of 1993)
Contracts which contradict the law or circumvent it, as well as contracts which infringe good morals, including contracts concerning unopened inheritances, shall be null and void.
Contracts which have an impossible subject matter, contracts in which consent is lacking, the form prescribed by law is lacking, the cause is lacking, as well as sham contracts, shall also be null and void.
The cause shall be presumed until the contrary is proven.
(Paragraph 3 repealed — SG No. 30 of 1990)
(Paragraph 4 amended — SG No. 12 of 1993)
The nullity of individual parts shall not entail nullity of the contract where they are replaced by operation of law by mandatory provisions of the law or where it may be presumed that the transaction would have been concluded even without the invalid parts thereof.
Contracts concluded by legally incapacitated persons or concluded by their representative without compliance with the requirements established for them, as well as contracts concluded under mistake, fraud, threat, or extreme necessity, shall be voidable.
A mistake as to the subject matter shall be grounds for avoidance of the contract where it relates to essential qualities thereof.
A mistake as to the person shall be grounds for avoidance where the contract was concluded having regard to the person.
A mistake relating solely to calculation shall not be grounds for avoidance but shall be subject to correction.
The party seeking avoidance shall be obliged to compensate the other party for the damages caused to it by the conclusion of the avoided contract, unless it proves that it is not at fault for falling into the mistake or that the other party knew of the mistake.
Fraud shall be grounds for avoidance of the contract where one party has been induced by the other to conclude it through intentional deception.
Where the fraud originates from a third person, the deceived party may seek avoidance of the contract only if, at the time of its conclusion, the other party knew or could not have been unaware thereof.
(Amended — SG No. 12 of 1993)
Threat shall be grounds for avoidance of the contract where one party has been compelled by the other party or by a third person to conclude the contract through the arousal of justified fear.
A contract concluded by a legally capable person shall be voidable if, at the time of its conclusion, that person was unable to understand or to direct its actions.
Avoidance of such a contract may not be sought after the death of the person, unless prior to death a request for placing it under interdiction had been made or unless proof of the incapacity derives from the contract itself.
Avoidance may be sought only by the party in whose interest the law permits voidability.
The right to seek avoidance shall be extinguished by a three-year limitation period.
The limitation period shall commence on the day on which the person has reached majority, the interdiction has been lifted, the mistake or fraud has been discovered, or the threat has ceased, and in all other cases — on the day of conclusion of the contract.
The defendant in an action for performance of a voidable contract may seek avoidance by way of defence even after the limitation period has expired.
A contract concluded due to extreme necessity under manifestly disadvantageous terms shall be voidable.
The court may avoid such a contract in full or only for the future.
Avoidance shall not be allowed if the other party offers to eliminate the detriment.
The right to seek avoidance shall be extinguished by a one-year period from the conclusion of the contract.
Avoidance on grounds of extreme necessity shall not affect rights acquired by third persons prior to registration of the statement of claim.
(Amended — SG No. 12 of 1993)
Where a contract is declared null and void or is avoided, each of the parties shall be obliged to return to the other party everything it has received from it.
(Paragraphs 2, 3, 4, and 5 repealed — SG No. 12 of 1993)
A voidable contract may be confirmed by the party entitled to seek its avoidance by means of a written act in which the ground for voidability must also be indicated.
The contract shall also be deemed confirmed where the party entitled to seek its avoidance performs it voluntarily, in whole or in part, knowing the ground for its voidability.
A contract voidable due to extreme necessity may not be confirmed.
One person may represent another by virtue of a provision of the law or by the will of the represented person.
The legal effects of the legal acts performed by the representative shall arise directly for the represented person.
(Amended — SG No. 59 of 2007, in force from 01.03.2008)
Authorisation to conclude contracts for which the law requires a special form must be granted in the same form.
However, where the contract must be concluded in notarial form, the authorisation may also be granted in writing with notarial certification of the signature and the content, performed simultaneously.
The representative may not contract in the name of the represented person either personally with himself or with another person whom he also represents, unless the represented person has given consent thereto.
The principal shall have the right at any time to revoke the power of attorney, and the attorney-in-fact — to renounce it.
Any waiver of this right by the principal or the attorney-in-fact shall be invalid.
The scope of the representative authority of the attorney-in-fact vis-à-vis third persons shall be determined according to what the principal has declared.
Where several persons have been authorised for a certain act, each of them may perform the act independently, unless otherwise follows from the authorisation.
Where the representative and the person with whom he contracts agree to the detriment of the represented person, the contract shall not produce effects for the represented person.
The power of attorney shall be terminated by its revocation or renunciation, by the death of the principal or of the attorney-in-fact, or by placing them under interdiction, and where the principal or the attorney-in-fact are legal persons — by their termination.
The termination of the power of attorney may not be invoked against third persons who have in good faith contracted with the attorney-in-fact, unless the termination was subject to registration and such registration has been effected.
The person who has acted as a representative without having representative authority shall owe compensation to the other party, if the latter has been in good faith.
The person in whose name a contract has been concluded without representative authority may confirm it.
The confirmation shall require the same form as that prescribed for the authorisation to conclude the contract.
The attorney-in-fact may sub-authorise another person if he has been authorised to do so or if sub-authorisation has become necessary in order to preserve the interests of the principal.
The sub-authorisation may be revoked both by the principal and by the sub-authoriser.
The attorney-in-fact shall be obliged immediately to notify the principal of the sub-authorisation and to provide him with the necessary information about the sub-authorised person.
If the attorney-in-fact fails to fulfil this obligation, he shall be liable for the actions of that person as for his own actions.
The rules relating to contracts shall apply mutatis mutandis to unilateral declarations of will in cases where the law allows them to create, amend, or extinguish rights and obligations.
Everyone shall be obliged to repair the damages which he has culpably caused to another.
In all cases of tort, fault shall be presumed until the contrary is proven.
In cases of inevitable self-defence, there shall be no liability for damages.
In cases of extreme necessity, compensation for the damages caused shall be due.
A person incapable of understanding or directing his actions shall not be liable for the damages which he has caused in that condition, unless the incapacity was culpably caused by himself.
For damages caused by an incapable person, the person who is obliged to exercise supervision over him shall be liable, unless he was unable to prevent their occurrence.
Parents and adoptive parents exercising parental rights shall be liable for damages caused by their children who have not reached majority and live with them.
The guardian shall be liable for damages caused by a minor who is under his guardianship and lives with him.
These persons shall not be liable if they were unable to prevent the occurrence of the damages.
A person who has assigned some work to another person shall be liable for the damages caused by that person in the course of or in connection with the performance of that work.
For damages arising from any things whatsoever, the owner and the person under whose supervision they are shall be jointly and severally liable.
Where the damages have been caused by an animal, these persons shall be liable even where the animal has escaped or has been lost.
Compensation shall be due for all damages which are a direct and immediate consequence of the damage.
It may be payable as a lump sum or periodically.
Where the injured person has contributed to the occurrence of the damages, the compensation may be reduced.
Where compensation for lost working capacity has been awarded, it may be reduced or increased if the working capacity of the injured person changes in connection with the damages caused.
Compensation for non-pecuniary damages shall be determined by the court according to equity.
Where the damage has been caused by several persons, they shall be jointly and severally liable.
The person who is liable for damages culpably caused by another shall have a claim against that person for what he has paid.
A person who has received something without legal grounds or with regard to grounds that have not materialised or have ceased to exist shall be obliged to return it.
A person who has knowingly performed a moral duty of his own may not claim restitution.
A person who, by mistake, has performed another person’s obligation may claim restitution from the creditor, unless the latter has in good faith relinquished the document or the security of the obligation.
In the latter case, the person who has performed the obligation shall be subrogated to the rights of the creditor.
Where restitution of a specific thing is due, the recipient shall owe the fruits from the moment of being put in default.
If the thing subject to restitution perishes after the default, or if the recipient has alienated or consumed it after having learned that he holds it without legal grounds, he shall owe its actual value or the price received for it, where the latter is higher.
However, if the thing has perished or if the recipient has alienated or consumed it before the default, he shall owe only that from which he has benefited, excluding the fruits.
Where restitution is due from an incapacitated person, only that which has gone to his benefit may be claimed from him.
Apart from the above cases, any person who has been enriched without legal grounds at the expense of another shall be obliged to return that with which he has been enriched, up to the amount of the impoverishment.
This right shall arise where there is no other claim by which the impoverished person may protect himself.
A person who undertakes the management of an affair which he knows to be another person’s, without being entrusted, shall be obliged to take care of it until the interested person is able to assume it.
He shall be obliged to take care of the affair as if he had been authorised.
His liability may be reduced in view of the special circumstances under which he undertook the care of another person’s affair.
If the affair has been undertaken appropriately and has been well managed in the interest of another, the interested person shall be obliged to perform the obligations concluded in his name, to indemnify the manager of the affair for the personal obligations he has assumed, and to reimburse him for the necessary and useful expenses together with interest from the day of their incurrence.
If the affair has been undertaken also in the manager’s own interest, the interested person shall be liable only up to the amount of his enrichment.
If a person has undertaken another person’s affair against the will of the interested person, the latter shall be liable under the rules on unjust enrichment.
If the interested person has approved the management of the affair, the rules on mandate shall apply.
(Paragraph 1 amended — SG No. 12 of 1993)
Each party to the contract shall perform its obligations thereunder precisely and in good faith, in accordance with the requirements of the law, and shall not hinder the other party from performing its obligations in the same manner.
The obligation shall be performed with the care of a good head of household, except in cases where the law requires another standard of care.
Where a thing determined only by its kind is due, the debtor shall deliver a thing of at least average quality.
The creditor may not be compelled to accept performance other than that which is due.
If the creditor agrees to receive ownership of something else instead of what is due, the rules on sale shall apply mutatis mutandis in cases of eviction or latent defects of the thing received.
Where a claim has been transferred to the creditor instead of what is due, the obligation shall be extinguished after the claim has been collected, unless otherwise agreed.
The creditor may not be compelled to accept partial performance, even if the obligation is divisible.
(Repealed — SG No. 12 of 1993)
Where the place of performance is not determined by the law, by the contract, or by the nature of the obligation, performance shall be effected:
(a) in monetary obligations — at the domicile of the creditor at the time of performance of the obligation;
(b) in obligations to deliver a specific thing — at the location of the thing at the time the obligation arose; and
(c) in all other cases — at the domicile of the debtor at the time the obligation arose.
Where the obligation is without a term, the creditor may demand its performance immediately.
Where performance is left to the will or the possibilities of the debtor, the creditor may request the district court to grant the debtor an adequate term.
The term shall be deemed agreed in favour of the debtor, unless otherwise follows from the will of the parties or from the nature of the obligation.
The debtor may perform his obligation prior to maturity, unless the term has been agreed also in favour of the creditor.
In interest-bearing monetary obligations, the debtor may pay before maturity and deduct the interest for the period until the end of the term.
Performance of a term obligation may be demanded by the creditor even before maturity where the debtor has become insolvent, or by his actions has reduced the securities given to the creditor, or has failed to provide the promised securities.
A term calculated in months shall expire on the corresponding date of the last month; if that month has no corresponding date, the term shall expire on its last day.
A term calculated in weeks shall expire on the corresponding day of the last week.
Where a term is calculated in days, the day of the event or moment from which the term begins to run shall not be counted.
The term shall expire at the end of the last day.
Where the last day of the term is a non-working day, the term shall expire on the first following working day.
Where a term expires a specified number of days before a known date, both that date and the day of expiry of the term shall not be counted.
Written declarations and notices of any kind shall be deemed made within the term if they have been handed over to the post office, telegraph, or by radiogram before the expiration of the twenty-fourth hour of the last day of the term.
The beginning of the month shall mean the first day, the middle of the month — the fifteenth day, and the end of the month — the last day of the month.
An obligation may be performed by a third person even against the will of the creditor, unless the creditor has an interest in it being performed personally by the debtor.
(Paragraph 2 repealed — SG No. 12 of 1993)
A person who has performed another person’s obligation while having a legal interest in doing so shall be subrogated to the rights of the creditor.
Performance of an obligation shall be made to the creditor or to a person authorised by him, by the court, or by the law.
Otherwise, it shall be valid only if the creditor has confirmed it or has benefited from it.
The debtor shall be discharged if he has in good faith performed his obligation to a person who, based on unequivocal circumstances, appears authorised to receive the performance.
The true creditor shall have a claim against the person who has received the performance.
Performance to an incapacitated creditor shall discharge the debtor if it has gone to the benefit of the creditor.
(New — SG No. 83 of 1996)
Where payment is made by debiting and crediting a bank account, the obligation shall be deemed extinguished upon crediting the creditor’s account.
A person who has several homogeneous obligations towards the same person, where the performance is insufficient to extinguish all of them, may declare which obligation he extinguishes.
If he has not declared this, the obligation most burdensome to him shall be extinguished.
Where several obligations are equally burdensome, the oldest shall be extinguished, and if all arose simultaneously, they shall be extinguished proportionally.
Where the performance is insufficient to cover interest, costs, and principal, the costs shall be extinguished first, then the interest, and lastly the principal.
Upon performance, the debtor may request a receipt from the creditor.
If a separate document has been issued by the debtor for the claim, he may request its return.
If the document also relates to other rights of the creditor or if the debtor has performed the obligation only partially, the creditor shall be obliged to note the received performance on the document and to issue a receipt to the debtor.
If the document has been lost, the creditor shall be obliged to note this circumstance in the issued receipt.
The costs of performance shall be borne by the debtor, and where the place of performance has been changed, the increased costs resulting from the change shall be borne by the person who has caused them.
If the debtor does not perform his obligation precisely, the creditor shall have the right to demand performance together with compensation for the delay, or to demand compensation for non-performance.
Where compensation is demanded instead of performance, the debtor may offer the originally due performance together with compensation for the delay, if the creditor still has an interest in the performance.
Where the obligation is for an act that may be performed by another person, the creditor shall have the right to request authorisation to perform the act at the expense of the debtor.
Where the obligation is not to do something, the creditor may request authorisation to remove, at the expense of the debtor, that which has been done in breach of the obligation.
The debtor shall not be liable where the impossibility of performance is due to a cause for which he is not at fault.
The circumstance that the debtor does not have sufficient monetary funds to perform the obligation shall not release him from liability.
Compensation shall cover the loss suffered and the loss of profit, insofar as they are a direct and immediate consequence of the non-performance and could have been foreseen at the time the obligation arose.
However, if the debtor has acted in bad faith, he shall be liable for all direct and immediate damages.
If the non-performance is also due to circumstances for which the creditor is responsible, the court may reduce the compensation or release the debtor from liability.
The debtor shall not owe compensation for damages which the creditor could have avoided by exercising the care of a good head of household.
Where the day for performance of the obligation has been determined, the debtor shall fall into default after its expiry.
However, if that day has expired after the death of the debtor, his heirs shall fall into default after the expiry of seven days from the invitation.
Where no day for performance has been determined, the debtor shall fall into default after being invited by the creditor.
In obligations arising from a tort, the debtor shall be deemed to be in default even without invitation.
Where the debtor is in default, he shall owe compensation even if performance becomes impossible due to a cause for which he would not previously have been liable, unless he proves that the creditor would have suffered the damages even in the case of timely performance.
In the event of non-performance of a monetary obligation, the debtor shall owe compensation in the amount of the statutory interest from the day of default.
For actually suffered damages in a higher amount, the creditor may claim compensation in accordance with the general rules.
The amount of the statutory interest shall be determined by the Council of Ministers.
Where the debtor under a bilateral contract fails to perform his obligation due to a cause for which he is liable, the creditor may rescind the contract by granting the debtor an appropriate term for performance with a warning that after the expiry of the term he shall consider the contract rescinded.
The warning shall be made in writing where the contract has been concluded in written form.
The creditor may declare to the debtor that he rescinds the contract without granting a term where performance has become wholly or partially impossible, where due to the debtor’s delay it has become useless, or where the obligation had to be performed strictly at the agreed time.
Rescission of contracts transferring, establishing, recognising, or terminating real rights over immovable property shall be effected by judicial procedure.
If the defendant offers performance in the course of the proceedings, the court may grant, according to the circumstances, a term for such performance.
Rescission of a contract shall not be permitted where the unperformed part of the obligation is insignificant in view of the interest of the creditor.
The right to rescind a contract shall be extinguished by five-year limitation.
Rescission shall have retroactive effect except in contracts for continuous or periodic performance.
The creditor shall have the right to compensation for the damages resulting from the non-performance of the contract.
Rescission of contracts subject to registration shall not affect rights acquired by third persons prior to the registration of the statement of claim.
In bilateral contracts, where the obligation of one party is extinguished due to impossibility of performance, the contract shall be rescinded by operation of law.
Where the impossibility is only partial, the other party may request a corresponding reduction of his obligation or rescission of the contract by judicial procedure, if he has no sufficient interest in partial performance.
A debtor who has a due claim against his creditor arising from the same legal relationship from which his obligation also arises may refuse to perform his obligation until the creditor performs his own.
In such case, the defendant shall be adjudged to perform simultaneously with the claimant.
Where it is clear from the circumstances that there is a danger that one of the parties will not perform his obligation, the other party may refuse to perform his own obligation, unless adequate security is provided to him.
A person who has a due claim in connection with the preservation, maintenance, repair, or improvement of another person’s movable thing, or for damages caused by it, shall have the right to retain it until he is satisfied, unless he is acting in bad faith.
Where the subject of retention is goods, the creditor may retain such quantity thereof as is necessary to satisfy his claim.
(Paragraph 3 repealed — SG No. 12 of 1993)
Retention shall not be permitted where adequate security is provided.
A creditor exercising retention shall have the right to preferential satisfaction from the value of the retained thing.
(Paragraph 6 repealed — SG No. 12 of 1993)
A penalty clause shall secure performance of the obligation and shall serve as compensation for damages from non-performance, without the need to prove them.
The creditor may also claim compensation for greater damages.
(Paragraph 2 repealed — SG No. 12 of 1993; new — SG No. 83 of 1996)
Where the penalty is excessively large in comparison with the suffered damages, or where the obligation has been improperly or partially performed, the court may reduce its amount.
(Paragraphs 3 and 4 repealed — SG No. 12 of 1993)
Earnest money shall serve as evidence that the contract has been concluded and shall secure its performance.
If the party who has given the earnest money fails to perform his obligation, the other party may withdraw from the contract and retain the earnest money.
If the obligation is not performed by the party who has received the earnest money, the other party, upon withdrawal from the contract, may claim double the amount of the earnest money.
Where the performing party prefers to demand performance of the contract, compensation for damages shall be determined according to the general rules.
Agreements by which liability of the debtor for intent or gross negligence is excluded or limited in advance shall be void.
(Paragraph 2 repealed — SG No. 12 of 1993)
The creditor shall be in default where, without justification, he does not accept the performance offered to him by the debtor or does not provide the necessary cooperation, without which the debtor would be unable to perform his obligation.
Where the creditor is in default, the risk shall pass to him.
If the debtor has also been in default, he shall be released from its consequences.
The necessary expenses incurred due to the creditor’s default shall be borne by the creditor.
Where the obligation is to deliver something and the creditor is in default, the debtor may release himself by depositing the due thing for safekeeping in an appropriate place designated by the district court at the place of performance.
Money, securities, and valuables may be deposited for safekeeping in a bank at the place of performance without court authorisation.
Where the due thing is subject to rapid deterioration or its deposit for safekeeping involves significant expenses or inconvenience, and also where by its nature it cannot be deposited, the debtor, after notifying the creditor, may request the district court to authorise him to sell the due thing and deposit the received amount in a bank in the name of the creditor.
The deposit for safekeeping shall not produce effect if the debtor withdraws the deposited item before it has been accepted by the creditor.
Where the obligation does not have as its object the delivery of something and the creditor refuses to accept the performance or to provide the necessary cooperation, the debtor may withdraw from the contract and claim compensation for the necessary expenses incurred due to the creditor’s default.
The creditor may transfer his claim unless the law, the contract, or the nature of the claim does not permit this.
The transferred claim shall pass to the new creditor together with its privileges, securities, and other appurtenances, including accrued interest, unless otherwise agreed.
The former creditor shall be obliged to notify the debtor of the transfer and to deliver to the new creditor the documents in his possession evidencing the claim, as well as to confirm the effected transfer to him in writing.
The transfer shall have effect vis-à-vis third persons and vis-à-vis the debtor from the day on which it is notified to the latter by the former creditor.
Where the transfer is for consideration, the creditor shall be liable for the existence of the claim at the time of the transfer.
He shall not be liable for the solvency of the debtor unless he has undertaken such liability, and only up to the amount of that which he has received in consideration of the transferred claim.
A third person may join as a co-debtor in a specific obligation by agreement with the creditor or with the debtor.
Where the creditor has approved the agreement for accession, it may not be revoked or amended without his consent.
The original debtor and the acceding person shall be liable to the creditor as joint and several debtors.
A third person may substitute the debtor only with the express consent of the creditor.
The substituted debtor shall be released from liability towards the creditor.
Securities provided by third persons shall be extinguished unless they agree that such securities shall serve for the new debtor.
The pledge and mortgage provided by the original debtor shall remain in force.
The new debtor may raise against the creditor the objections which the former debtor had, arising from the transferred legal relationship.
Where two persons mutually owe money or fungible things of the same kind, each of them, if his claim is due and liquid, may set it off against his obligation.
Set-off shall also be permitted after the claim has been extinguished by limitation, if it could have been effected prior to the expiry of the limitation period.
Where the debtor has consented to the transfer of the claim, he may not set off his obligation against a claim he has against the former creditor.
Set-off shall be effected by a declaration of one party addressed to the other.
It may not be made subject to a term or condition, except subject to the condition that the claim brought before the court will be upheld.
The two reciprocal claims shall be deemed extinguished up to the amount of the lesser of them from the day on which the set-off could have been effected.
Claims which are not subject to compulsory enforcement, claims arising from intentional torts, and claims for taxes may not be set off without the consent of the creditor.
(Repealed — SG No. 12 of 1993)
An obligation shall be novated where it is replaced by another by agreement with the creditor.
In such case, the securities of the old obligation shall be preserved for the new one if the persons who have provided them consent thereto.
(Paragraph 2 repealed — SG No. 12 of 1993)
An obligation shall be remitted where the creditor renounces his claim by contract with the debtor.
An obligation shall be deemed extinguished where the private document evidencing it is in the possession of the debtor, unless it is proven that it was not returned to him voluntarily.
Upon the expiry of a five-year limitation period, all claims shall be extinguished for which the law does not provide another period.
Upon the expiry of a three-year limitation period, the following claims shall be extinguished:
a) claims for remuneration for labour for which no other limitation period is provided;
b) (amended — SG No. 12 of 1993) claims for damages and penalties arising from non-performance of a contract;
c) claims for rent, for interest, and for other periodic payments;
d) (deleted — SG No. 12 of 1993)
(amended — SG No. 16 of 1977; repealed — SG No. 12 of 1993; new — SG No. 102 of 2020, in force from 02.06.2021)
Upon the expiry of a ten-year limitation period, monetary claims against natural persons shall be extinguished, regardless of interruption thereof, except where the obligation has been deferred or rescheduled.
The limitation period under paragraph 1 shall not apply to claims:
Articles 115 and 118 shall apply to the limitation period under paragraph 1.
Any agreement by which the established limitation periods are shortened or extended, as well as any waiver of limitation before its expiry, shall be null and void.
The limitation period shall begin to run from the day on which the claim has become due.
Where it is agreed that the claim becomes due after notice, the limitation period shall begin to run from the day on which the obligation has arisen.
For claims arising from tort, the limitation period shall begin to run from the discovery of the tortfeasor.
(new paragraph 4 — SG No. 12 of 1993)
In actions for penalties for delay, the limitation period shall begin to run from the last day for which the penalty is accrued.
Limitation shall not run:
a) between children and parents while the latter exercise parental rights;
b) between persons under guardianship or trusteeship and their guardians or trustees while the guardianship or trusteeship lasts;
c) between spouses;
d) for claims of persons whose property is under administration by law or by order of the court against the administrator while the administration lasts;
e) for claims for compensation of legal persons against their managers while the latter are in office;
f) for claims of minors and of persons placed under interdiction for the period during which they have no appointed legal representative or trustee, and for six months after the appointment thereof or after the termination of incapacity;
g) while judicial proceedings concerning the claim are pending.
Where the limitation period expires at a time when the creditor or the debtor is militarily mobilised, the claim may be brought within six months from their demobilisation.
Limitation shall be interrupted:
a) by acknowledgement of the claim by the debtor;
b) by bringing an action or an objection, or by filing a request for the commencement of conciliation proceedings; where the action, objection, or request for commencement of conciliation proceedings is not upheld, limitation shall not be deemed interrupted;
c) by undertaking actions for compulsory enforcement.
(new — SG No. 42 of 2018)
Where a claim is asserted partially, limitation shall be suspended or interrupted only with respect to the asserted part.
From the interruption of limitation, a new limitation period shall begin to run.
(paragraph 2 amended — SG No. 12 of 1993)
Where the claim has been established by a court judgment, the term of the new limitation period shall always be five years.
Where the debtor performs his obligation after the expiry of the limitation period, he shall have no right to claim restitution of what has been paid, even if at the time of payment he did not know that the limitation period had expired.
Upon extinction of the principal claim, the ancillary claims arising therefrom shall also be extinguished, even if the limitation period for them has not expired.
(amended — SG No. 16 of 1977 and SG No. 30 of 1990)
Limitation shall not be applied ex officio.
(paragraphs 2, 3, and 4 repealed — SG No. 30 of 1990)
Except in cases determined by law, joint and several liability between two or more debtors shall arise only where it has been agreed.
(paragraph 2 repealed — SG No. 12 of 1993)
The creditor may demand performance of the entire obligation from any one of the debtors.
Bringing an action against one joint and several debtor shall not affect the rights of the creditor against the remaining co-debtors.
A joint and several debtor may not raise against the creditor the personal defences of his co-debtors.
Performance by one joint and several debtor shall release all co-debtors.
Acceptance of something in lieu of performance by one joint and several debtor, set-off with one joint and several debtor, as well as the creditor’s default with respect to one joint and several debtor, shall also have effect against all joint and several debtors.
A joint and several debtor may not set off his obligation with claims of his co-debtors against the creditor.
Novation of the obligation of one joint and several debtor shall release the remaining co-debtors, unless the creditor has reserved his rights against them.
Remission in favour of one joint and several debtor shall release the remaining co-debtors as well, unless the creditor has reserved his rights against them.
In the latter case, the obligation of the others shall be reduced by the share of the debtor in whose favour the obligation has been remitted.
Merger in one and the same person of the capacities of creditor and joint and several debtor shall extinguish the obligation of the others for the share of that co-debtor.
Interruption and suspension of limitation against one joint and several debtor shall not produce effect with respect to the remaining co-debtors.
However, if the debtor with respect to whom limitation has not expired performs the obligation, he shall have a claim against those released by limitation.
Waiver of limitation by one joint and several debtor shall not produce effect with respect to the remaining co-debtors.
The debtor who has waived limitation shall have no claim against those released by limitation.
Where performance becomes impossible and only one of the debtors is responsible for this, the creditor may claim full compensation for damages from him.
The remaining debtors shall be jointly and severally liable only for the value of what was originally due.
Delay by one joint and several debtor shall not produce effect with respect to the remaining co-debtors.
Unless otherwise follows from the relations between the joint and several debtors, what has been paid to the creditor shall be borne by them in equal shares.
Any joint and several debtor who has performed more than his share shall have a claim against the remaining co-debtors for the difference.
If any of the latter proves insolvent, the loss shall be distributed proportionally among the other co-debtors, including the one who has performed.
Where the performing joint and several debtor has not raised a common defence against the creditor or has not notified his co-debtors of the performance, he shall be liable to them for the damages caused.
An obligation shall be indivisible where that which is due is indivisible by its nature or by reason of the intention of the contracting parties.
In both cases, the obligation shall remain indivisible also with respect to the heirs of the debtor.
The subject matter of an indivisible obligation shall be delivered jointly to all creditors.
However, each creditor may request that the due thing be deposited for safekeeping in accordance with Article 97.
In all other respects, the rules concerning joint and several obligations shall apply accordingly to indivisible obligations.
Where, in an obligation with a right of choice, it is not determined to whom the choice is granted, it shall belong to the debtor.
The choice shall become irrevocable when it is communicated to the other party, and where it is granted to a third person, when it is communicated to both parties.
Where several persons participate on the side to whom the choice must be communicated, it shall become irrevocable when communicated to one of them.
Where the right of choice belongs to the debtor and he does not exercise it within the prescribed period, or where there is no such period — by the time the obligation must be performed, the right of choice shall pass to the creditor.
Where the right of choice belongs to the creditor and he does not exercise it within the prescribed period, or where there is no such period — within the period determined for him by the debtor, the right of choice shall pass to the debtor.
Where the choice is granted to a third person and he does not make it within the period prescribed for him, the choice shall be made by the court.
Where performance with one of the objects of the obligation becomes impossible due to a cause for which the party not holding the right of choice is not responsible, the obligation shall remain in force only with respect to the remaining objects.
Where responsibility for the impossibility lies with the party not holding the right of choice, the other party may choose as follows:
the creditor may choose either performance with any of the possible objects of the obligation or compensation instead of the impossible one;
the debtor may choose either any of the possible objects of the obligation and claim compensation for the impossible one, or to be released from the obligation by waiving the compensation.
The entire property of the debtor shall serve as general security for his creditors, who shall have equal right to be satisfied therefrom, unless there are lawful grounds for preference.
A creditor may exercise the proprietary rights of the debtor where the latter’s inaction threatens the creditor’s satisfaction, except where such rights are of a kind whose exercise depends on the purely personal discretion of the debtor.
Where the creditor brings an action under the preceding paragraph, the debtor shall also be summoned as a party.
Where the exercise of the right does not consist in bringing an action, the creditor must, in order to perform the act, be authorised by the court under the procedure for securing claims.
A creditor may request that acts by which the debtor prejudices him be declared ineffective with respect to him, where the debtor, at the time of performing them, knew of the prejudice.
Where the act is onerous, the person with whom the debtor has contracted must also have known of the prejudice.
The ineffectiveness shall not affect rights acquired onerously by third parties acting in good faith before the registration of the statement of claim seeking declaration of ineffectiveness.
Knowledge shall be presumed until proven otherwise where the third party is the spouse, a descendant, an ascendant, a brother or a sister of the debtor.
Where the act was performed before the claim arose, it shall be ineffective only if it was intended by the debtor and the person with whom he contracted to prejudice the creditor.
Creditors in whose favour the ineffectiveness has been declared shall be satisfied from the sum obtained from the public sale before the third party where the latter participates in the distribution with a claim arising from the declaration of ineffectiveness.
The following claims shall enjoy the right of preferential satisfaction, in the order listed below:
(paragraph 2 amended — SG No. 12 of 1993)
Claims under items 5 and 6 shall be satisfied preferentially from the entire property of the debtor.
Claims of equal rank shall be satisfied proportionally.
In addition to awarded interest, the right of preferential satisfaction shall also cover interest accrued after the commencement of compulsory enforcement, as well as interest for the year preceding it.
(paragraph 1 amended — SG No. 12 of 1993)
Where the law does not determine the order for satisfaction of a claim to which it grants a right of preferential satisfaction, such claim shall be paid after the claims under item 6 of the preceding article.
Where special laws provide that certain claims must be paid before all others, they shall be paid after the claim under item 1 of Article 136, and where they compete among themselves, they shall be paid proportionally.
By a contract of suretyship, the surety undertakes, towards the creditor of another person, to be liable for the performance of that person’s obligation.
This contract must be concluded in written form.
Suretyship may exist only for a valid obligation.
It may also be undertaken for a future or conditional obligation.
Suretyship may also be undertaken for part of the debtor’s obligation or under more lenient conditions.
Where the surety has undertaken more than what the debtor owes or under more onerous conditions, his obligation shall be reduced to the limits of the principal obligation.
Suretyship shall extend to all consequences of non-performance of the principal obligation, including the costs of collection of the claim.
The surety shall be jointly and severally liable with the principal debtor.
Where several persons have given suretyship for the same debtor and the same obligation, each of them shall be liable for the entire obligation, unless there is an agreement for its division.
The surety may raise against the creditor all defences belonging to the debtor, and may also effect set-off with a claim of the debtor against the creditor.
He shall not lose these rights even where the debtor has waived them or has acknowledged his obligation.
The surety who has performed the obligation may claim from the debtor the principal, interest and costs incurred, after having notified him of the action brought against him.
He shall also be entitled to statutory interest on the paid amounts from the day of payment.
The debtor shall not be liable towards the surety if he has performed the obligation before being notified of the payment made by the surety.
Where the surety has performed the obligation without notifying the debtor, the latter may raise against him the defences he could have raised against the creditor upon performance.
In both cases, the surety may claim restitution of what the creditor has unduly received.
The debtor who has performed the obligation shall be obliged to notify the surety immediately.
Where several persons have given suretyship for the same debtor and the same obligation, the surety who has performed the obligation may claim from the other sureties their respective shares.
The surety who has performed the obligation shall be subrogated into the rights which the creditor has against the debtor, even if the debtor did not know of the suretyship given.
The surety shall also be subrogated into the creditor’s rights against third parties who have established a pledge or mortgage for the obligation, but only to the extent to which he would have had a claim against them had they been sureties.
Suretyship shall be extinguished where, due to the actions of the creditor, the surety cannot be subrogated into his rights.
The surety shall remain liable after the maturity of the principal obligation if the creditor has brought an action against the debtor within six months.
This provision shall also apply where the surety has expressly limited his suretyship to the term of the principal obligation.
Extension of the term granted by the creditor to the debtor shall have no effect with respect to the surety unless he has given his consent thereto.
Interruption of limitation with respect to the debtor or his waiver of an expired limitation shall have no effect with respect to the surety.
Interruption of limitation with respect to the surety or his waiver of an expired limitation shall have no effect with respect to the debtor.
For securing a claim, a pledge may be established over a movable thing or over a claim, and a mortgage over an immovable property.
A pledge and a mortgage may be established both for one’s own obligation and for another person’s obligation.
The pledge and the mortgage shall follow the secured claim upon its transfer and shall be extinguished if it is extinguished.
Where the obligation is divided among the heirs of the debtor, the pledge and the mortgage shall continue to encumber the entire obligation over the entire thing or over all things, even where they have been divided among the heirs.
Where the pledge or the mortgage secures another person’s obligation, the owner of the pledged thing or of the mortgaged property may raise against the creditor all defences available to the debtor, as well as request set-off with claims which the debtor has against the creditor.
Any agreement by which it is stipulated in advance that, if the obligation is not performed, the creditor shall become owner of the thing, as well as any other agreement by which a method of satisfying the creditor is stipulated in advance other than that provided by law, shall be null and void.
Where there are several pledges or mortgages over one thing, the creditors shall be satisfied preferentially in the order in which the pledges and mortgages were established, even where the secured claim had not arisen at the time of their establishment.
(amended — SG No. 12 of 1993)
Where the pledged or mortgaged things perish or are damaged, or are expropriated for State or municipal needs, the pledge and mortgage creditors shall have the right to preferential satisfaction from the insurance amount or from the compensation due, according to the order of preference held by their original claims.
However, payment made to the owner shall be valid if the pledge or mortgage creditor has been notified thereof by the insurer or by the person owing the compensation and has not objected within three months.
Where the debtor has transferred the pledged or mortgaged thing to a third party and the acquirer has paid or has been subjected to compulsory enforcement, he shall be subrogated into the rights of the satisfied creditor against the debtor, against the sureties, and against persons who have acquired from the debtor ownership of other things pledged or mortgaged for the same obligation at a later time.
The same rights shall belong to the owner who has pledged or mortgaged his own thing for another person’s obligation.
In such case, however, he shall be subrogated into the creditor’s rights against the sureties only to the extent to which he would have had a claim against them had he himself been a surety.
The contract of pledge is valid only if the pledged thing is delivered to the creditor or to another person chosen by him and by the pledgor.
(Para. 2 amended – SG No. 12 of 1993) Where the secured claim exceeds 5 leva, the pledge may not be set up against third parties unless there exists a written document bearing a reliable date, containing an indication of the things and of the claim.
The creditor has the right to retain the pledged thing until the secured claim has been fully extinguished.
He has no right to use it unless otherwise agreed.
If he is deprived of possession of the thing, he may, on the basis of his pledge, seek its return also from the person in whose possession it is found.
If there is a danger that the pledged thing may perish or deteriorate, both the creditor and the pledgor may request authorisation from the district court for it to be sold and for the amount to be deposited in a bank as security for the creditor.
The creditor has the right to obtain preferential satisfaction from the price of the pledged thing through compulsory enforcement upon it only if he has not returned it to the debtor.
It is presumed that the thing has been returned if it is in the debtor’s possession.
(Amended – SG No. 12 of 1993; amended – SG No. 59 of 2007, in force from 01.03.2008)
Where the secured claim is monetary or where a monetary penalty has been agreed for it, if the pledge has been constituted by a written contract or is provided by law as security for claims arising from a written contract, the creditor may, on the basis of the contract, request the issuance of an order for immediate enforcement under Article 418 of the Civil Procedure Code.
The rules of this chapter do not derogate from the special provisions of other laws concerning the constitution and effects of the pledge.
(Amended – SG No. 12 of 1993)
Claims that may be transferred may be pledged.
A contract pledging a claim may not be set up against third parties unless the pledge has been notified to the debtor; where the secured claim exceeds 5 leva, the provision of Article 156, paragraph 2 shall also apply.
The pledgor is obliged to deliver to the pledge creditor the documents evidencing the pledged claim, if such exist.
A creditor who has a pledge over a claim is obliged to perform all acts necessary for its preservation.
He is obliged to collect the interest on the pledged claim, and if it becomes due – also the principal.
What the creditor has collected pursuant to the preceding paragraph remains with him as a pledge. If it is a monetary amount, it shall be deposited in a bank as security for the creditor.
(Amended – SG No. 59 of 2007, in force from 01.03.2008)
A creditor who has a pledge over a claim may request the issuance of an order for immediate enforcement under Article 418 of the Civil Procedure Code under the conditions and in the manner of Article 160, and shall obtain preferential satisfaction according to the procedure for directing enforcement against a claim.
(Para. 1 supplemented – SG No. 34 of 2000, in force from 01.01.2001)
A mortgage is constituted by registration in the Property Register, effected on the basis of a contract or by operation of law.
(Para. 2 amended – SG No. 12 of 1993)
It may be constituted only over individually determined immovable properties and for a determined monetary amount.
The contract of mortgage shall be concluded by notarial deed.
It shall state: the full names, domicile and occupation of the creditor and the debtor, as well as of the owner of the property if the mortgage is constituted for another person’s obligation, and where any of these persons is a legal entity – its exact name; the property over which the mortgage is constituted; the secured claim, its maturity and the amount of interest, if agreed, as well as the amount for which the mortgage is constituted where the claim is not monetary.
A mortgage may be constituted only over properties which, at the time of concluding the contract, belong to the person constituting it.
A statutory mortgage is constituted:
The statutory mortgage shall be registered upon application by the creditor, to which a copy of the act of transfer or of partition shall be attached.
The application must contain all data specified in Article 167, paragraph 2.
(Para. 1 repealed – SG No. 34 of 2000, in force from 01.01.2001)
The mortgage takes rank from its registration.
The constitution of a mortgage is void if, whether in the mortgage contract, in the application for constituting a statutory mortgage, or in the act on the basis of which it is submitted, there exists uncertainty as to the identity of the creditor, the owner or the debtor, as to the identity of the property and of the secured claim, or as to the amount for which the mortgage is constituted.
(Amended – SG No. 34 of 2000, in force from 01.01.2001)
The transfer and pledging of a claim secured by a mortgage, accession to such a claim and the imposition of attachment upon it, as well as novation and substitution in an obligation secured by a mortgage, in order to have effect, must be effected in written form with notarised signatures and registered in the Property Register.
The effect of registration lasts for 10 years from the day on which it was made.
It may be extended if the registration is renewed before this period expires.
If the period expires without renewal being effected, the mortgage may be registered anew; in such case it takes rank from the new registration.
Renewal of the registration shall be effected upon application, which must be accompanied by a copy of the contract or of the application for constituting the mortgage.
A creditor whose claim is secured by a mortgage has the right to obtain preferential satisfaction from the price of the mortgaged property, regardless of whose ownership it is in.
The right of preferential satisfaction also extends to the income from the property from the day on which, in compulsory enforcement, the owner owes an account for them pursuant to the Civil Procedure Code.
(Amended – SG No. 59 of 2007, in force from 01.03.2008)
If the claim is for a determined monetary amount or if a monetary penalty has been agreed for it, the creditor may, on the basis of the act of registration of the mortgage, request the issuance of an order for immediate enforcement under Article 418 of the Civil Procedure Code.
The mortgage secures the claim regardless of the changes that have occurred in it, but only up to the amount for which the registration has been effected.
If, however, it is registered that the claim bears interest, it also secures the interest for the two years preceding the year of service of the summons for voluntary performance on the owner, for the current year and for all subsequent years up to the day of sale of the property.
In addition, the mortgage secures the creditor’s claim for the expenses of its constitution and renewal, judicial costs, and enforcement costs.
Upon the conduct of a public sale of the property, all mortgages over it, as well as all real rights constituted after the first mortgage, are extinguished.
Mortgage creditors have the right to preferential satisfaction from the price according to the rank of their mortgages.
(Para. 2 supplemented – SG No. 34 of 2000, in force from 01.01.2001; amended – SG No. 43 of 2005, in force from 01.09.2005)
The mortgage may be preserved upon the public sale of the property if the purchaser, by agreement with the mortgage creditor, assumes the secured obligation.
In such case, the record by which the state or private enforcement agent establishes this agreement shall be noted in the registration in the Property Register.
If a third person who is not personally liable for the secured claim acquires the mortgaged property and thereafter the property is sold by public sale, the real rights which he had over the property prior to acquiring its ownership are restored by operation of law, with the exception of mortgages.
As regards the latter, he participates in the distribution of the price according to the rank they had.
If the owner of the sold mortgaged property is not personally liable, he has the right to receive from the price of the property, prior to the mortgage creditors, the necessary expenses he has incurred for the property, as well as the increase in its value due to his useful expenses.
He is liable to the mortgage creditors for damage caused to the property through his gross negligence.
A person who purchases a mortgaged property from the debtor under the secured claim, if he has not assumed the obligation, may pay the mortgage creditor up to the amount of the price he owes.
In such case, with respect to creditors whose mortgages were constituted before he purchased the property, it is deemed that he has acceded to the rights of the satisfied creditor.
The registration of the mortgage shall be deleted on the basis of the creditor’s consent, which must be given in notarised form, or on the basis of a final court judgment.
(Para. 2 amended – SG No. 34 of 2000, in force from 01.01.2001)
Deletion shall be effected upon application, to which the act of consent or a copy of the final judgment shall be attached.
It shall be carried out by making a notation in the file of the mortgaged property.
Deletion extinguishes the mortgage.
However, if the act on the basis of which deletion was effected is declared void, the mortgage may be registered anew; in such case it takes rank from the new registration.
Where the law provides that security must be furnished before a court, the security may consist of a pledge of a monetary amount or of government securities, or of a mortgage.
The value of securities and immovable properties shall be calculated at 20% below their market value.
A pledge shall be constituted by depositing the amount or the securities in a bank.
A mortgage shall be constituted by registration of the notarised consent of the owner of the immovable property to its constitution.
The pledged money and securities shall be returned to the pledgor, and the mortgage shall be deleted, by order of the court before which the security has been furnished.
The rules of Articles 180 and 181 shall also apply where the law provides that security must be furnished before another state authority; in such case, the acts of the court shall be performed by the state authority before which the security is furnished.
By the contract of sale, the seller undertakes to transfer to the buyer the ownership of a thing or another right against a price which the buyer undertakes to pay to him.
(Para. 2 repealed – SG No. 12 of 1993)
If, at the time of conclusion of the contract, the thing had perished, the contract is void.
If only part of the thing had perished, the buyer has the right either to withdraw from the contract or to claim the surviving part with a corresponding reduction of the price.
The following may not be buyers, even at a public sale, whether directly or through an intermediary:
The costs of the contract and other expenses connected with the transfer of ownership shall be borne by the buyer, except in the sale of immovable property, where the expenses shall be borne equally by the parties.
The costs of delivery, including measuring and weighing, shall be borne by the seller, and the costs of acceptance shall be borne by the buyer.
(New – SG No. 12 of 1993)
The risk of accidental loss or damage of goods determined by kind passes to the buyer from the moment the goods are individualised by agreement between the parties or are delivered to him, and, in the case of delivery to buyers in other settlements, from the moment they are delivered to a forwarding agent or carrier, unless otherwise agreed between the parties.
In transit deliveries, in the same cases, the risk passes to the final recipient.
The seller is obliged to deliver to the buyer the sold thing.
The thing shall be delivered in the condition in which it was at the time of sale, together with the fruits thereof from that time.
The seller is liable if third persons have ownership or other rights in respect of the thing which they may assert against the buyer, unless the latter was aware of this.
If the sold thing belongs entirely to a third person, the buyer may rescind the sale pursuant to Article 87.
In such case, the seller is obliged to return to the buyer the price paid and to reimburse him for the costs of the contract, as well as the necessary and useful expenses incurred for the thing.
For other damages, the seller is liable according to the general rules on non-performance of obligations.
The seller owes return of the entire price even where the thing has depreciated or been damaged; however, if the buyer has derived benefit from damage which he himself has caused, the value of such benefit shall be deducted from the amount owed to him by the seller.
If only part of the sold thing belongs to a third person, or the thing is encumbered with rights of a third person, the buyer may seek rescission of the sale by judicial procedure and compensation pursuant to the preceding article, where, in view of the circumstances, it must be assumed that he would not have concluded the contract had he known this.
Otherwise, the buyer may claim a reduction of the price and compensation for damages.
If the buyer is evicted by a court judgment, he may also claim from the seller the value of the fruits which he has been ordered to return to the third person, and payment of the costs of the proceedings.
The seller is not liable for eviction if he was not joined as a party to the proceedings and if he proves that there were sufficient grounds for dismissal of the claim.
Where the buyer has avoided eviction or has released the thing from the rights which third persons had over it by paying a monetary amount, the seller may release himself from liability by paying to the buyer that amount, the interest thereon from the day of payment, and the expenses.
If the buyer was aware, at the time of sale, of the rights of third persons, upon eviction he may claim only return of the price.
This also applies where the seller has stipulated that he shall not be liable for eviction.
An agreement releasing the seller from liability shall have no effect if he has concealed rights of third persons known to him.
The seller is liable if the sold thing has defects which substantially reduce its price or its fitness for ordinary use or for the use envisaged in the contract.
The seller is not liable for defects which were known to the buyer at the time of sale.
The seller is also liable where he was unaware of the defect.
An agreement excluding liability is void.
After accepting the thing, the buyer must examine it within the time ordinarily required for this in similar cases and must immediately notify the seller of any defects observed.
If he fails to do so, the thing shall be deemed approved, unless defects are discovered later which could not have been detected upon ordinary examination.
In the latter case, the buyer’s rights are preserved if he immediately notifies the seller of the discovered defect.
Notification of the seller is not required if he was aware of the defect.
In the cases where the seller is liable pursuant to Article 193, the buyer may:
He may also claim compensation for damages according to the general rules on non-performance of obligations.
In sales of goods determined by kind, the buyer may either exercise the rights under paragraph one, or claim delivery of goods without defects, as well as compensation for damages in both cases.
The buyer has the rights under the preceding article also where the thing has perished or has been damaged, if this occurred due to its defects or due to a fortuitous event.
If the damage or loss occurred through the fault of the buyer or of the persons to whom the thing was transferred by him, he may claim only a reduction of the price and compensation under the conditions of the preceding article.
The buyer’s rights are limited in the same manner where the thing has been processed.
The buyer’s claims under Article 195 shall be extinguished upon the expiry of one year in the sale of immovable property and six months in the sale of movable things.
If the seller has knowingly concealed the defect, the period shall be three years.
The period may be extended or shortened by agreement of the parties.
The period runs from delivery of the thing.
Where the buyer raises an objection for defects in the sold thing which has been sent to him from another place, he must keep it at the seller’s disposal and take provisional care for its preservation.
If the thing is exposed to spoilage and delay involves danger, or if safekeeping involves significant costs or inconvenience, the buyer, after notifying the seller, may request authorisation from the district court to sell it.
The rules on liability for defects shall not apply to public sales.
The buyer is obliged to pay the price and to receive the thing.
Payment shall be made simultaneously with delivery of the thing and at the place where delivery is effected.
If the sold thing yields fruits or other income, the buyer owes interest on the price from the day of delivery of the thing, even if the price has not yet become due.
In the sale of a movable thing, the seller may rescind the contract without observing the requirements of Article 87:
In both cases, the seller must notify the buyer within 7 days after expiry of the time limit that he has rescinded the contract.
Where no time limit has been set for payment of the price and the buyer receives the thing without paying, the seller may claim its return within 15 days from delivery, provided the thing is still in the buyer’s possession and is in the condition in which it was delivered.
This right may not be exercised to the detriment of the buyer’s creditors who have imposed attachment on the thing or have received it as a pledge without knowing that the price had not been paid.
If the sale is concluded by sample and the buyer does not present it, it is presumed that the thing possesses the qualities of the sample.
A sale subject to trial or inspection is presumed to be concluded under the suspensive condition that the buyer will approve the thing.
The seller is released from the contract if the thing is in his possession and the buyer does not approve it by expiry of the agreed period, or, if no such period exists, immediately after being invited to do so by the seller.
The thing is deemed approved if it has been delivered to the buyer and he does not express an opinion by expiry of the agreed period, or, if no such period exists, immediately after being invited to do so by the seller.
In the sale of movable things by instalments, the seller may retain ownership of the sold thing until receipt of the final instalment; in such case, however, the risk passes to the buyer from delivery.
This condition may be asserted against the buyer’s creditors if it is agreed in writing and the document bears a reliable date.
Notwithstanding any agreement to the contrary, non-payment of instalments not exceeding one fifth of the price of the thing does not constitute grounds for rescission of the contract.
If the contract is rescinded due to non-performance by the buyer, the seller may claim remuneration for use of the thing irrespective of his right to compensation.
An agreement that the paid instalments shall remain with the seller as compensation is void.
(Repealed – SG No. 83 of 1996)
In contracts for periodic deliveries, the price shall be paid upon the individual deliveries proportionally to them.
The time limit set for individual deliveries is presumed to be agreed in the interest of both parties.
A sale with an agreement for repurchase is void.
In the sale of an immovable property with indication of its area and the price per unit of measurement, where the actual area proves to be greater or smaller than that stated in the contract, the price of the property shall be increased or reduced accordingly.
The buyer may, however, withdraw from the contract if the area is greater or smaller by one tenth than that stated in the contract.
Where the price is determined globally for the entire property, if the area of the property is stated in the contract and proves to be more than one tenth less than the actual area, the buyer has the right to seek rescission of the contract or a reduction of the price; but if it proves to be greater by more than one tenth, the seller has the right to seek an increase of the price, in which case the buyer may withdraw from the contract.
These rules shall not apply to public sales.
Actions for the exercise of the rights under the preceding article must be brought within one year from delivery of the property.
Rescission of the contract shall not affect rights of third persons acquired prior to the notation of the statement of claim.
A person who sells an inheritance as a whole without specifying its individual assets is obliged to warrant only his status as heir.
The sale of an inheritance must be effected in writing, with the signatures of the contracting parties notarised.
A contract for the sale of an inheritance containing immovable property may be asserted against third persons only if it is registered.
If, prior to the sale of the inheritance, the seller has collected a claim or has alienated certain assets, he is obliged to return what he has received to the buyer.
The buyer is obliged to return to the seller what the latter has paid for the obligations and encumbrances of the inheritance.
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
(Repealed – State Gazette No. 85 of 1963)
By the contract of exchange, the parties undertake to transfer to each other ownership of things or other rights.
The rules governing sale shall apply accordingly to exchange, with each exchanger being deemed the seller of what he gives and the buyer of what he receives.
(Repealed – State Gazette No. 12 of 1993)
By the contract of donation, the donor immediately and gratuitously transfers a thing to the donee, who accepts it.
The donation of movable property shall be effected in writing with notarised signatures or by delivery, and the donation of securities – in the manner prescribed for their transfer.
A promise to make a donation produces no legal effect.
A donation insofar as it concerns future property is void.
(Para. 3 amended – SG No. 12 of 1993)
A donation is also void where it, or the sole motive for which it was made, is contrary to the law or to good morals, as well as where the conditions or charges are impossible.
A donation may be revoked where the donee:
These provisions shall not apply to customary or remunerative gifts.
An action may be brought within one year from the time when the grounds for revocation became known to the donor. Until expiry of this period, the action may also be brought by the donor’s heirs if the donor has died before that.
A prior waiver of this action is void.
Revocation of the donation shall not affect rights acquired by third persons over the donated property prior to the notation of the statement of claim; however, the donee owes the donor compensation for the enrichment obtained.
By the lease contract, the lessor undertakes to provide the lessee with a thing for temporary use, and the lessee undertakes to pay a determined price.
(Supplemented – SG No. 92 of 2007)
A lease contract may not be concluded for a period exceeding ten years, unless it constitutes a commercial transaction.
Persons who may perform only acts of ordinary administration may not conclude a lease contract for more than three years.
If the contract is concluded for a longer period, it shall be effective for ten years or, respectively, for three years.
Unless otherwise agreed, the lessor is obliged to deliver the thing in a condition suitable for the use for which it is leased.
If the thing is not delivered in proper condition, the lessee may demand its repair or a proportional reduction of the rent, or may rescind the contract, and may in all cases claim compensation.
The lessor is not liable for defects of the leased thing which were known to the lessee or could have been known to him with ordinary care at the time of conclusion of the contract, unless the defects are dangerous to his health or to the health of members of his household.
Minor repairs relating to damage due to ordinary use, such as soiling of walls, corrosion of taps, locks, chimney blockages and similar, shall be borne by the lessee.
Repairs of all other damage, if not caused by the lessee’s fault, shall be borne by the lessor.
If the lessor fails to carry out such repairs, the lessee has the rights under paragraph 2 of the preceding article, but may claim compensation only where the damage is due to a cause for which the lessor is liable.
If the lessee performs the repair himself with the care of a prudent manager, he may set off its value against the rent.
Where the thing perishes wholly or partially, Article 89 shall apply.
The lessee is obliged to use the thing in accordance with the use specified in the contract, and where none is specified – in accordance with its purpose.
He is obliged to pay the rent and the expenses related to the use of the thing.
The lessee is obliged to return the thing.
He owes compensation for damages caused during the use of the thing, unless he proves that they are due to a cause for which he is not liable.
He also owes compensation for damages caused by members of his household or by his sublessees.
Until proven otherwise, it is presumed that the thing was accepted in good condition.
The lessee is obliged to notify the lessor immediately of damage and encroachments upon the leased thing.
Unless otherwise agreed, the lessee may sublease parts of the leased thing without the lessor’s consent; however, he shall not thereby be released from his obligations under the lease contract.
As regards use of the property, the sublessee may not have more rights than the lessee.
The sublessee is liable to the lessor only for the rent due at the time the action is brought, without being entitled to set up payments made prematurely.
A lessee of premises in condominium ownership is obliged to comply with the regulations on order and management of the condominium.
In the event of non-compliance, he may be evicted from the leased premises at the request of the condominium management.
If, after expiry of the lease term, use of the thing continues with the knowledge and without objection of the lessor, the contract shall be deemed extended for an indefinite period.
If the lessee continues use despite the lessor’s objection, he owes compensation and must perform all obligations arising from the terminated lease contract.
(Para. 1 supplemented – SG No. 34 of 2000, in force from 01.01.2001)
Upon transfer of an immovable property, the lease contract remains effective against the acquirer if it has been registered in the property register.
A lease contract concluded prior to the transfer of the property, if it bears a reliable date, shall be binding upon the acquirer until the term provided therein, but for no more than one year from the transfer.
If it does not bear a reliable date and the lessee is in possession of the property, the contract shall be binding upon the acquirer as a lease for an indefinite term.
The lessor owes compensation to the lessee if the latter is deprived of use of the leased property before expiry of the lease term due to transfer of the property.
Where a lease contract is without a determined term, either party may terminate it by giving one month’s prior notice to the other.
Where the rent is agreed on a daily basis, one day’s notice shall suffice.
Where a lease is created by an act of a competent state authority, relations between the parties shall be governed by the above rules insofar as a special law does not provide otherwise.
By the loan contract, the lender transfers into ownership to the borrower money or other fungible things, and the borrower undertakes to return the borrowed amount or things of the same kind, quantity and quality.
The borrower owes interest only if this is agreed in writing. This provision does not apply to banks.
Article 247 shall apply to loans.
Unless otherwise agreed, the borrower must return the borrowed money or things within one month from demand.
A person who has undertaken to grant a loan may refuse to perform this obligation if the other contracting party has become insolvent.
(Repealed – State Gazette No. 12 of 1993)
By the contract of loan for use, the lender gratuitously provides the borrower with a specific thing for temporary use, and the borrower undertakes to return it.
The borrower is obliged to take care of the thing as a prudent manager, preferring its preservation over that of his own things.
He may use the borrowed thing only in accordance with the contract, and where use is not agreed – in accordance with its purpose, and may not grant its use to another person.
In the event of non-performance of these obligations, the borrower owes compensation even for damage arising from causes for which he is not liable, unless he proves that such damage would have affected the thing even had he duly performed.
Where the thing is lent to several persons, they shall be jointly and severally liable.
The borrower bears the ordinary expenses for maintenance, preservation and use of the thing.
He is entitled to claim from the lender reimbursement of extraordinary expenses if they were necessary and urgent.
Where the borrowed thing has yielded fruits, the borrower must return them, unless otherwise agreed.
The lender owes compensation for damages caused to the borrower by hidden defects of the borrowed thing if he intentionally or negligently failed to inform the borrower thereof.
In loans for use, Article 233 shall apply accordingly.
Upon expiry of the agreed term or after use, the borrower is obliged to return the thing.
The lender may demand return of the thing even before that if he urgently needs it himself due to an unforeseen event, or if the borrower dies or fails to perform his obligations under Article 244.
Where the time or purpose of use is not determined by the contract, the lender may demand return of the thing at any time.
By the contract of deposit, the depositor delivers a movable thing to the depositary, who receives it with the obligation to keep it and return it.
The depositary is not entitled to remuneration unless it has been agreed.
Restrictions on proof by witness testimony shall not apply where the deposit has been imposed by a calamity such as fire, flood, or another exceptional event, as well as where the thing is delivered to an employee upon visiting a theatre, club, restaurant, or similar establishments.
The depositor may at any time demand the return of the deposited thing and of the fruits obtained from it, even if it has been agreed that the deposit shall last for a determined period.
In such case, the depositor owes remuneration only for the time during which the thing has been kept; however, he must reimburse the depositary for expenses incurred with regard to the agreed duration of the deposit.
The deposited thing shall be returned at the expense of the depositor at the place where it was to be kept.
The depositary may not use the thing without the consent of the depositor.
Otherwise, he owes remuneration for the use and is liable in accordance with paragraph 3 of Article 244.
The depositary is obliged to keep the entrusted things with the care of a prudent manager.
The depositor is obliged to pay extraordinary expenses for preservation of the thing if they were necessary and urgent, and where the deposit is gratuitous – also the ordinary expenses.
He is liable for damages and special expenses caused by hidden defects of the deposited thing if the depositary was not aware of them.
Where no term has been agreed for keeping the thing, the depositary may release himself from his obligations under the deposit by notifying the depositor and granting him a sufficient period to take the thing back.
If by the expiry of the term agreed in the contract or specified in the notice the depositor does not take the thing, the depositary shall thereafter be liable only in cases of intent or gross negligence and may request permission from the district court to sell the deposited thing at public auction.
From the proceeds, the depositary’s claims shall be satisfied, and the remainder shall be deposited in a bank in the name of the depositor.
(Repealed – State Gazette No. 12 of 1993)
Even where the things given for safekeeping are fungible, the depositary has no right to dispose of them unless authorised by the depositor.
In such case, the rules governing loans shall apply.
Paragraph 1 shall not apply to banks and to the Savings Bank.
By the contract for work, the contractor undertakes at his own risk to produce something in accordance with the order of the other party, and the latter undertakes to pay remuneration.
Unless otherwise agreed, the contractor is obliged to perform the work using his own materials.
The contractor is obliged to warn the other party immediately if the project provided or the material supplied is unsuitable for proper execution of the work, and to request the necessary changes to the project or delivery of suitable material.
If the other party fails to do so, the contractor may withdraw from the contract.
If the contractor fails to give such warning, he is liable to the other party for the damages caused.
The contractor is obliged to perform the work in such a way that it is fit for its ordinary or contractually intended purpose.
A contractor who performs the work using his own material is liable for its good quality.
Where several persons have undertaken to perform jointly one work, they shall be jointly and severally liable unless otherwise agreed.
The ordering party may inspect performance of the contract at any time, provided that he does not hinder the contractor.
(Paragraph 2 amended – SG No. 12 of 1993)
If it becomes apparent that the contractor will not be able to complete the work on time or will not perform it in the agreed or proper manner, the ordering party may rescind the contract and is entitled to compensation under the general rules.
The risk of accidental loss or damage to the material shall be borne by the party who provided it, unless the other party is in delay.
The ordering party is obliged to accept the work performed in accordance with the contract.
Upon acceptance, he must inspect the work and raise all objections regarding improper performance, except where defects cannot be discovered by ordinary acceptance or appear later.
For such defects, the ordering party must notify the contractor immediately upon discovery. This is not required if the contractor was aware of the defects.
If no such objections are raised, the work shall be deemed accepted.
Where, in performing the work, the contractor has deviated from the order or the completed work has defects, the ordering party may demand:
If the deviation from the order or the defects are so substantial that the work is unfit for its contractual or ordinary purpose, the ordering party may rescind the contract.
These rights shall be extinguished after six months, and in construction works – after five years.
The ordering party must pay the remuneration for the accepted work.
If remuneration has been agreed per unit prices, its amount shall be determined upon acceptance of the work.
If during performance of the contract the duly determined price of materials or labour is changed, the remuneration shall be adjusted accordingly, even if it had been agreed as a lump sum.
(Paragraph 3 repealed – SG No. 12 of 1993)
If performance of the work becomes impossible due to a cause for which neither party is liable, the contractor has no right to remuneration.
If part of the work has been performed and can be useful to the ordering party, the contractor is entitled to the corresponding part of the agreed remuneration.
The contractor is entitled to remuneration where performance has become wholly or partially impossible due to the unsuitability of the material or project supplied by the ordering party, provided that the contractor warned him in due time.
Where there are justified reasons, the ordering party may withdraw from the contract even if performance has begun, by paying the contractor the expenses incurred, the work performed, and the profit he would have obtained from completion of the work.
(Paragraph 2 repealed – SG No. 12 of 1993)
If the contractor dies or becomes incapable of performing the work, the contract shall be terminated unless it was concluded with regard to the contractor’s person and his heirs agree to continue performance.
Upon termination of the contract, the ordering party must pay for the work performed and the usefully invested materials in proportion to the agreed remuneration.
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 56 of 1993)
(Repealed – State Gazette No. 12 of 1993)
By a contract of mandate, the mandatary undertakes to perform, at the expense of the mandator, the actions entrusted to him by the latter.
The mandatary is obliged to perform the mandate with the care of a prudent manager and to safeguard the property received in connection with it.
The mandatary may deviate from the mandate if this has become necessary in order to protect the interests of the mandator and if it was not possible to obtain his consent.
The mandatary must perform the entrusted action personally.
He may entrust it to another person if he has been authorised by the mandator or if this has become necessary to protect the mandator’s interests and if failure to perform would cause damage to the mandator.
The mandatary must immediately notify the mandator of the substitution.
A mandatary who had no right to substitute himself shall be liable for the acts of the substitute as for his own acts, and if he had such right, he shall be liable for damages caused by poor selection of the substitute.
The mandatary is obliged to inform the mandator of the performance of the mandate.
The mandatary is obliged to render an account to the mandator and to deliver to him everything received in execution of the mandate.
The mandator is obliged, upon request, to provide the mandatary with the means necessary for performance of the mandate and to reimburse him for the expenses incurred, together with interest and damages suffered in connection with execution of the mandate.
(Amended – State Gazette No. 12 of 1993)
The mandator is obliged to pay remuneration to the mandatary only if such remuneration has been agreed.
The contract of mandate is terminated, in addition to other grounds provided by law, also by withdrawal of the mandate by the mandator, by renunciation by the mandatary, and by the death or placement under interdiction of either of them, as well as by the dissolution of a legal entity where it was the mandator or the mandatary.
Withdrawal of the mandate does not deprive the mandatary of the right to claim reimbursement of expenses and payment of the agreed remuneration.
If performance of the mandate becomes impossible, the mandator must pay the mandatary the expenses incurred and remuneration proportionate to the work performed.
A mandatary who renounces the mandate without sufficient grounds and fails to notify the mandator in due time owes compensation for the damages caused by the renunciation.
The acts performed by the mandatary in execution of the mandate, without knowing and without being able to know that it had been terminated, shall bind the mandator.
Upon termination of the mandate due to death, placement under interdiction, or dissolution of a legal entity, the heirs, guardian, trustee, or liquidation body must immediately notify the other party and take appropriate measures to safeguard that party’s interests.
If the mandatary acts in the name of the mandator as his authorised representative, the rights and obligations arising from transactions concluded with third parties arise directly for the mandator.
If the mandatary acts in his own name, the rights and obligations arising from transactions with third parties arise for him. However, these rights, in the relations between the mandatary and the mandator, as well as in relation to third parties acting in bad faith, shall be deemed to be rights of the mandator.
These rights shall also be deemed to be rights of the mandator in relation to good-faith creditors of the mandatary, if the contract of mandate bears a reliable date preceding the attachment. With regard to bad-faith creditors of the mandatary, this rule shall apply even without a reliable date.
Where the mandate is given for acquisition of real rights over immovable property in the name of the mandatary, the contract must be concluded in writing with notarised signatures.
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
By a contract of partnership, two or more persons agree to combine their activity for the achievement of a common economic objective.
(Paragraph 2 repealed – State Gazette No. 12 of 1993)
For the achievement of the common objective, the partners may agree on contributions in money or in other property.
Money contributed, fungible items, and items consumed through use shall be common property of the partners. Any other item shall be deemed contributed for common use unless otherwise agreed.
With regard to the liability of a partner for defects in the contributed item and for eviction, the rules of the lease of things shall apply where the item is contributed for use, and the rules of the contract of sale shall apply where the item is contributed into ownership.
Everything acquired for the partnership shall be common property of the partners.
Unless otherwise agreed, the shares of the partners shall be equal.
A partner may claim his share of the common property only upon withdrawal from the partnership or upon its termination.
Decisions concerning the affairs of the partnership shall be taken with the consent of all partners unless the partnership agreement provides that they shall be taken by a majority of votes. Each partner shall have one vote.
Unless otherwise agreed, each partner shall have the right to manage. In such case, any of the other partners may object to the act of a partner before it is performed. In the event of disagreement, the decision shall be taken by a majority of the partners.
Unless otherwise agreed, profits and losses shall be distributed among the partners proportionally to their share.
Any agreement excluding one or more partners from participation in profits or losses shall be void.
A partner may not transfer his right of participation in the partnership without the consent of the other partners.
The partnership shall be terminated:
A partner has the right to claim reimbursement of the expenses incurred by him, together with interest thereon, and compensation for the damages suffered in connection with the conduct of the partnership’s affairs.
By a settlement agreement, the parties terminate an existing dispute or avoid a potential dispute by making mutual concessions.
By such mutual concessions, legal relations that were not the subject of the dispute may also be created, amended, or extinguished. In such case, the transfer of such rights shall be carried out in the form prescribed by law.
A settlement concerning an unlawful contract shall be void even if the parties have settled with respect to its invalidity.
A settlement concluded on the basis of documents that were later recognised as false shall be voidable.
A public promise of a reward for the performance of a specific task, made in written form or announced through the press or in another manner, obliges the promisor to pay the reward.
Where the task is performed by two or more persons jointly, the reward shall be divided among them according to their participation in the performance of the task, and where such participation cannot be determined, the reward shall be divided equally among them.
Where no agreement on this matter is reached between the persons, the reward shall be granted after the dispute is resolved by judicial procedure.
Where the task is performed by two or more persons independently of one another, the reward shall be granted to the person who first presents the completed task, and where it is presented simultaneously by them, the reward shall be divided equally.
(Paragraph 1 amended – State Gazette No. 12 of 1993)
A public promise of a reward for the best performance of a specific task (competition) obliges payment of the promised reward to the person whose work has won the competition.
The determination of whether the submitted works meet the conditions specified in the competition, as well as the comparative evaluation of the works, shall be carried out in the manner specified in the announcement.
Where it is recognised that the persons participating in the work equally deserve the reward, it shall be divided equally among them.
(Entire Chapter Repealed)
(Repealed)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
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(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 83 of 1996)
(Repealed – State Gazette No. 28 of 1982)
(New – State Gazette No. 19 of 2003)
(Entire Part Repealed)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
(New – State Gazette No. 19 of 2003, repealed – State Gazette No. 42 of 2005)
After Article 638, a new Article 638a shall be created as follows:
Article 638a.
In cases where a claim is brought under Article 19, paragraph 3 of the Obligations and Contracts Act, and according to the preliminary contract the claimant is required to perform a reciprocal obligation upon the conclusion of the final contract, the court shall render a decision substituting that contract, subject to the performance of the obligation by the claimant. In such cases, the claimant must perform the obligation within a two-week period from the date on which the decision enters into legal force.
If the claimant fails to perform the obligation within this period, the court of first instance shall invalidate the decision upon the request of the defendant.
By its decision, the court shall also order the claimant to pay to the State the due costs relating to the transfer of the immovable property and shall order the registration of a distraint over the property to secure those costs.
After Article 1001, the following shall be added:
Invalidation of Order Securities
A person who, against his will, has been deprived of possession of an order security may request its invalidation from the People’s Court at the place of payment.
The application must precisely describe the contents of the security, and the applicant must state how he was deprived of possession thereof. The applicant must confirm the truthfulness of this statement by an explicit declaration included in the application.
After receiving the application, the People’s Court shall order the person obligated to pay the security at maturity not to pay the amount and shall grant a period of forty-five days for the bearer of the security to assert his rights thereto. The order shall be served on the payer and published in the State Gazette.
This period shall begin to run from the date of publication of the order, and if publication occurs before the maturity of the security – from the date of maturity.
If no one asserts rights over the security before the court within that period, the court shall order its invalidation. If such rights are asserted and the security is presented, the court shall terminate the proceedings and invalidate the order, and the interested parties may pursue their rights under the general procedure.
After the invalidation of the security, the applicant shall exercise the rights arising therefrom on the basis of the decision of invalidation; however, he shall remain liable for damages and losses vis-à-vis the owner of the security.
After Article 5, a new Article 5a shall be created as follows:
Article 5a.
Statements of claim seeking the rendering of judgments for the conclusion of a final contract (Article 19, paragraph 3 of the Obligations and Contracts Act), by which a real right over immovable property is transferred or established, shall also be subject to registration.
Real rights acquired and distraints imposed after such registration may not be asserted against the claimant. However, the State may enforce its claims against the transferor, which became due prior to the date of transfer or establishment of the real right, against the immovable property, regardless of whose possession it is in.
The final court decision upholding the claim shall be registered on the basis of a certified copy issued by the court after the claimant proves that he has fulfilled the obligations conditioning the transfer of ownership.
This Act shall enter into force on 1 January 1951 and shall repeal:
Pending court proceedings concerning declared insolvencies and preventive concordats shall be completed under the previous procedure.
References in various laws to provisions of the laws repealed under § 4 shall be deemed references to the corresponding provisions of this Act.
The rules on the duration of limitation periods and other time limits provided for in this Act shall not apply to limitation periods and time limits that began to run under the previous law, unless the previous law requires a longer period for their completion than that provided for in this Act.
(New – State Gazette No. 50 of 2008, in force from 30 May 2008)
Powers of attorney for the establishment, amendment or termination of rights over immovable property, executed before 1 March 2008, shall retain their legal effect.
(Promulgated – State Gazette No. 83 of 1996)
The amendments and supplements to the Obligations and Contracts Act introduced by this Act shall not apply to transactions concluded but not performed before its entry into force.
(Promulgated – State Gazette No. 43 of 2005)
This Act shall enter into force on 1 September 2005.
(Promulgated – State Gazette No. 36 of 2006, in force from 1 July 2006)
This Act shall enter into force on 1 July 2006, with the exception of Article 42, paragraph 3 and Article 58, paragraph 4, which shall enter into force on the date of accession of the Republic of Bulgaria to the European Union.
(Promulgated – State Gazette No. 59 of 2007, in force from 1 March 2008)
The Code shall enter into force on 1 March 2008, with the exception of:
which shall enter into force three days after promulgation of the Code in the State Gazette.
(Promulgated – State Gazette No. 50 of 2008)
In the Obligations and Contracts Act (promulgated, State Gazette No. 275 of 1950; corrected, Special Issue No. 2 of 1950; amended…), a final provision with a sole paragraph shall be created:
[… text omitted in the original source …]
This Act shall enter into force on 1 March 2008, with the exception of §§ 23, 25, 45, 46 and 47, which shall enter into force on the date of promulgation in the State Gazette.
(Promulgated – State Gazette No. 96 of 2017, in force from 2 January 2018)
This Act shall enter into force one month after its promulgation in the State Gazette, with the exception of:
(Promulgated – State Gazette No. 102 of 2020, in force from 2 June 2021, amended – State Gazette No. 35 of 2021)
(Declared unconstitutional by Constitutional Court Decision No. 4 of 2021 – State Gazette No. 35 of 2021)
For existing cases, the limitation period under Article 112 shall begin to run from the day on which the claim became due. In pending enforcement proceedings, the limitation period shall begin to run from the first enforcement action, and where no such proceedings have been initiated – from the date of entry into force of the act recognising the claim.
This Act shall enter into force six months after the date of its promulgation in the State Gazette.
(Prepared on behalf of Black Sea Law Counsel / BSLC)
This English-language translation of the Obligations and Contracts Act of the Republic of Bulgaria is unofficial and has been prepared exclusively for informational, educational, and reference purposes.
The translation is intended to assist foreign nationals, international professionals, academics, legal practitioners, and English-speaking residents in understanding the structure, terminology, and legal framework governing obligations, contracts, securities, liability, limitation periods, and related private-law institutions under Bulgarian law.
This document does not have legal force and does not replace the official Bulgarian-language text of the Obligations and Contracts Act as promulgated in the State Gazette of the Republic of Bulgaria.
In the event of any discrepancy, inconsistency, omission, ambiguity, or divergent interpretation between this English translation and the official Bulgarian-language text, the Bulgarian-language version shall prevail.
Although every effort has been made to ensure accuracy, terminological consistency, structural fidelity, and a faithful 1:1 rendering of the statutory text, Black Sea Law Counsel (BSLC) expressly disclaims any and all liability for:
This translation is provided solely for orientation and reference purposes.
Persons relying on this document are strongly advised to:
Use of this translation is entirely at the reader’s own risk.
(Used throughout the English translation of the Obligations and Contracts Act)
Repealed provisions are explicitly marked and retained for historical and structural completeness only.
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