What are the obligations of the builder under a construction contract? When is there a complete default and when is there a partial default?
The construction contract in Bulgarian law in its legal essence constitutes a contract for construction within the meaning of Art. 258 et seq. of the Law on Obligations and ContractsIt is also subject to the special requirements of Spatial Planning Act, the implementing regulations and technical regulations.
The duties of the builder arise simultaneously from:
- the concluded contract;
- the approved investment project;
- the building permit issued;
- imperative requirements of the law.
AND. Basic duties of the builder
1. Obligation to carry out the construction and installation works under the contract
According to Art. 258 of the Law on Obligations and Contractsthe contractor undertakes to produce something in accordance with the order of the contracting authority.
In the construction process, this means that the builder is obliged to fulfill the object:
- in accordance with the approved investment project;
- according to technical rules and regulations;
- in compliance with quality and safety requirements;
- with the agreed materials and technologies.
Any deviation from the project without the consent of the contracting authority or without the corresponding amendment of the construction papers constitutes a violation.
2. Obligation to perform within the agreed time
The term is an essential element of the construction contract. In case of delay, it applies Art. 84 and Art. 86 of the Law on Obligations and Contractswhich govern liability in the event of default and the liability for compensation.
Where the time limit is agreed to be substantial, the default may result in:
- penalty;
- compensation for damages;
- termination of the contract under Art. 87 of the Law on Obligations and Contracts.
3. Obligation to perform personally and qualitatively
According to Art. 259 of the Law on Obligations and Contractsthe contractor must carry out the work personally, unless otherwise agreed. In construction, this rule is applied through the institute of subcontractors, with the builder retaining full responsibility to the contracting authority.
According to Art. 265, para. 1 of the Obligations and Contracts Actif the work has shortcomings, the contracting authority may:
- to demand their removal;
- ask for a reduction in remuneration;
- to eliminate shortcomings at the expense of the contractor;
- to terminate the contract in the event of material deficiencies.
4. Obligation to comply with the building rules and the requirements of the Law on Spatial Planning
According to Art. 163, para. 2 of the Spatial Planning Act, the builder is obliged:
- to carry out the construction in accordance with the approved construction papers;
- comply with technical rules and regulations;
- use construction products that meet the requirements;
- to ensure healthy and safe working conditions;
- to keep the construction documentation.
Violation of these obligations can lead not only to contractual, but also to administrative-criminal liability.
5. Warranty Liability
Upon completion of the construction, the builder bears warranty liability for defects within the legally established warranty periods according to the by-laws on the application of the Law on Spatial Planning.
II. Complete non-fulfillment
Complete default is present when the builder does not fulfill his obligation at all or the result is completely unfit for its intended purpose.
Examples:
- construction does not start at all (here a distinction should be made from the initial impossibility of execution, which would have arisen if the contractor was not able to build at all at the date of signing the contract, which would have led to the nullity of the construction contract initially)
- terminates work and the object remains unfinished;
- what is built is constructively unfit;
- the construction is illegal and subject to removal, the fault of which lies with the builder.
In such cases, the contracting authority may terminate the contract under Art. 87 of the Law on Obligations and Contractsand claim full compensation.
III. Partial default
Partial default is present when the obligation is fulfilled, but:
- not executed in full volume;
- is executed inaccurately;
- there are deviations from the project;
- there are defects;
- there is a party.
Partial default can be:
- quantitative — non-performance of part of the agreed works;
- quality — performance with flaws;
- Time — fun.
In the event of partial default, the contracting authority shall have the right to Art. 265 of the Law on Obligations and Contractsas well as the right to compensation under the general rules of Art. 82 and Art. 86 of the same law.
IV. When is non-fulfillment material?
According to Art. 87 of the Law on Obligations and Contracts, the contract may be terminated in the event of a culpable default if it is substantial — that is, if it deprives the contracting authority of what it was entitled to expect.
In construction, a material default occurs, for example, in the case of:
- serious structural defects;
- systematic arrears;
- implementation in deviation from the approved design;
- use of unsuitable materials;
- refusal to eliminate shortcomings.
What do manifest and hidden defects in construction mean?
In the context of a construction contract, the term “defect” means a deviation from the agreed quality, from the approved investment project or from technical rules and regulations. The legal framework is mainly contained in Art. 265 of the Law on Obligations and Contracts, which regulates the responsibility of the contractor in case of defects in the workmanship, as well as in the special rules of construction legislation.
The distinction between manifest and hidden defects is essential, since the time limits and the way in which the contracting authority can exercise its rights depend on it.
Obvious defects
Obvious defects are those shortcomings that can be identified during a simple examination of the object at its transmission or reception. These are visible, easily detectable deviations that do not require special technical knowledge or destruction of construction elements.
Examples of obvious defects can be:
- cracked plaster;
- visibly uneven floors;
- improperly placed window frames;
- missing agreed elements;
- deviations from the approved architectural project, which are obvious.
According to Art. 264, para. 1 of the Obligations and Contracts Act, the contracting authority is obliged to review the work when it is accepted and to object to obvious shortcomings. If he does not object to the acceptance, the work is considered accepted without comment on obvious defects.
This means that failure to declare obvious shortcomings in a timely manner can lead to the loss of the right to seek responsibility for them.
Hidden defects
Hidden defects are those shortcomings that cannot be identified during a simple examination at the acceptance of the construction and manifest themselves subsequently. They usually require specialized knowledge, technical expertise, or demolition of parts of a building to be established.
Examples of hidden defects:
- improperly executed waterproofing, which leads to leaks over time;
- construction problems;
- defects in installations that are not visible upon acceptance;
- use of materials of lower quality than agreed, which becomes clear only after operation.
According to Art. 265, para. 3 of the Obligations and Contracts Act, the rights of the contracting authority for hidden defects are extinguished at the expiration of five years for construction work, unless another period is provided for in a special law. In construction, legally established warranty periods are often applied according to the by-laws under the Spatial Planning Act.
It is important to emphasize that hidden defects should be notified by the contracting authority to the contractor within a reasonable period of time after their discovery. The responsibility of the builder arises if it is established that the defect arises from a guilty default or from the use of inappropriate materials and technologies.
Legal significance of the distinction
The difference between overt and hidden defects has a direct impact on:
- the moment when the right to object arises;
- the burden of proof;
- the applicable limitation periods;
- the possibility of termination of the contract.
In the event of significant hidden defects that render the construction unfit for its intended purpose or seriously reduce its value, the contracting authority may request the cancellation of the contract under Art. 87 of the Law on Obligations and Contracts, as well as compensation for damages.
In practice, the distinction is often established through forensic technical expertise, which assesses whether the defect was objectively detectable at the time of acceptance of the construction or manifested itself later in the operation process.
How can I sue a builder or file a complaint against a construction company in case of breach of contract in Bulgaria— and before which authority?
When a builder fails to perform a construction contract — whether through delay, defective workmanship, refusal to complete the project, or hidden defects — the client has several parallel legal remedies under Bulgarian law. These remedies may be out-of-court or judicial, depending on the seriousness of the breach and the contractor’s conduct.
1️⃣ Formal written notice for performance (out-of-court step)
The first and often mandatory step is sending a formal written notice to the contractor, granting a reasonable deadline for voluntary performance.
The legal basis is article 87(1) of the obligations and contracts act, which provides that a bilateral contract may be terminated for culpable non-performance after granting an appropriate period for performance.
If the contract was concluded in writing, the warning must also be in writing.
The notice should include:
- a precise description of the breach (delay, defects, abandonment, etc.);
- the legal grounds;
- a reasonable deadline for remedying the defects or completing the works;
- an explicit warning that the contract will be terminated or legal action will follow if compliance does not occur.
In practice, a properly structured legal notice often leads to voluntary compliance or settlement.
2️⃣ Complaint to administrative authorities
If the breach also constitutes a violation of construction regulations, a complaint may be filed with:
- the national construction control directorate — in cases of violations of the spatial development act;
- the competent municipality;
- the consumer protection commission — if the client is a private individual and the contract qualifies as a consumer contract.
It is important to understand that administrative authorities may impose fines or sanctions, but they do not award compensation. Financial recovery requires court proceedings.
3️⃣ Filing a lawsuit against the builder
To obtain compensation or enforce contractual rights, a claim must be filed before the competent Bulgarian court.
Possible legal grounds include:
- article 79 of the obligations and contracts act — claim for specific performance;
- article 82 — claim for damages;
- article 86 — statutory interest for delay;
- article 87 — termination of contract due to breach;
- article 265 — liability for defective performance.
The specific legal qualification depends on whether the breach concerns delay, defective execution, partial non-performance, or total non-performance.
4️⃣ Which court has jurisdiction?
Jurisdiction depends on the value of the claim:
- district court — for claims up to bgn 25,000
- regional court — for claims exceeding bgn 25,000
Jurisdiction is generally determined by:
- the registered seat of the defendant (the construction company), or
- the place of performance of the contract.
Where the construction contract qualifies as a commercial transaction — which is common — the case is examined under the special rules for commercial disputes.
5️⃣ What can be claimed in court?
Depending on the case, the claimant may request:
- payment of contractual penalties;
- compensation for delay;
- costs of remedying defects;
- reimbursement of amounts already paid;
- damages for lost profit;
- termination of the contract;
- statutory interest;
- reimbursement of court costs and legal fees.
In construction disputes, court-appointed technical expert evidence is often decisive, as it establishes the existence, scope, and causes of the breach.
6️⃣ Limitation periods
The general limitation period under article 110 of the obligations and contracts act is five years.
For hidden defects, the special limitation periods under article 265(3) apply, along with statutory warranty periods under construction legislation.
Missing these deadlines may result in loss of the right to bring a claim.
Why is it important to work with a building law attorney from BSLC? 🏗️⚖️
Construction disputes are one of the most complex civil cases because they combine:
- contract law
- construction and administrative law
- technical expertise
- significant financial interests
The team of BSLCIt works systematically and strategically. We:
- we analyze the contract and construction documentation;
- we assess whether the default is material;
- we structure the correct legal qualification of the claim;
- we organize technical expertise;
- We protect the client in all legal proceedings.
🎯 Our goal is not just to file a lawsuit, but to provide real recovery for the damage caused and protection of your investment.
In a dispute with a builder, time, evidence and legal strategy are crucial. This is where professional legal assistance makes the difference.
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