Written and reviewed by Adriana Melnikliyska, Attorney-at-law, Blagoevgrad Bar No. 1900000227. Last reviewed 27 September 2026.Who this page is for
This page is for a business, or an individual acting through a business, that needs a contract governed by or connected to Bulgaria reviewed before signing, or drafted from the company’s own side — whether the counterparty is Bulgarian or the contract simply has a Bulgarian party, a Bulgarian place of performance, or Bulgarian law as its governing law. It is written for the stage before a dispute exists: getting the contract right at signature, rather than trying to read a badly drafted clause favourably after a disagreement has already started. Where a dispute over an existing contract has already arisen, the business lawyer hub and, for a dispute specifically between co-owners, the shareholder disputes page cover that stage instead.
The two-statute framework
Almost every Bulgarian commercial contract question traces back to the interaction of two pieces of legislation, and a review that only checks one of them is an incomplete review.
The Obligations and Contracts Act
This is the general civil-law foundation for every contract under Bulgarian law, commercial or not: what makes an agreement validly formed, the default rules for performance and the consequences of non-performance, how damages for breach are assessed, when a contract can be rescinded or terminated, and how the general limitation periods for bringing a claim work. Many of its provisions are default rules — they apply unless the contract itself validly says otherwise — but some are mandatory and cannot be overridden by agreement, which is exactly the kind of distinction a template cannot flag but a review can.
The Commerce Act
Where at least one party is a merchant (a company or a trader carrying out commercial activity, which covers the great majority of businesses this practice deals with), the Commerce Act adds commercial-specific rules on top of the general framework: specific provisions for commercial sale, current account arrangements between ongoing trading partners, commercial agency and mediation, bank guarantees, and the formalities and evidentiary treatment the law gives to commercial transactions generally. A contract drafted only with the Obligations and Contracts Act in mind, without checking whether a Commerce Act provision applies to the specific relationship, can miss a rule that actually governs the deal.
Contract types businesses most often need reviewed
Certain contract categories recur constantly in the enquiries this practice receives, each with its own characteristic risk points.
| Contract type | What typically goes wrong without a proper review |
|---|---|
| Supply agreements | Unclear delivery and acceptance terms, one-sided quality/rejection rights, price-adjustment clauses that do not actually track the trigger they claim to, and force-majeure wording narrower or broader than the parties think. |
| Distribution and agency agreements | Ambiguous territorial exclusivity, termination notice periods that do not match what either side expects, and post-termination obligations (stock buy-back, non-compete, compensation on termination) left unaddressed or drafted in a way that is not enforceable as written. |
| Service and consultancy contracts | Scope creep because the deliverable is described too loosely, liability caps set at a level that does not match the actual exposure, and intellectual-property ownership over work product left unclear. |
| Non-disclosure agreements (NDAs) | A definition of “confidential information” so broad it is unenforceable, or so narrow it does not cover what was actually shared, and a remedy clause that promises something (like a fixed penalty) the Obligations and Contracts Act would not actually let a court award as written. |
| Shareholder agreements | Provisions that conflict with the company’s own articles of association or with mandatory Commerce Act rules on governance, transfer restrictions that are not properly reflected in the Commercial Register, and deadlock or exit mechanisms that look workable on paper but are untested against how a Bulgarian court would actually enforce them — see the shareholder disputes page for what happens when this goes wrong. |
What a lawyer’s review actually catches that a template does not
A contract template, whether it is a downloaded precedent, AI-generated draft, or a form used in a previous unrelated deal, can produce a document that looks complete and professional while missing the specific things that matter for this contract, this counterparty, and Bulgarian law as it actually applies. A review does not just check spelling and structure; it checks:
- Whether the governing-law and jurisdiction clauses actually work. A contract can name Bulgarian law as governing while naming a court or arbitration forum that has no real jurisdiction over the dispute, or vice versa — a clause that looks standard but is internally inconsistent is worse than no clause at all, because it invites a jurisdictional fight before the actual dispute is even reached.
- Whether termination and default triggers are defined precisely enough to use. “Material breach” with no further definition is a frequent source of dispute in itself; a review either defines it specifically or flags that it has been left open deliberately.
- Whether liability caps and exclusions are enforceable as drafted. Bulgarian law limits how far a party can exclude liability, particularly for intentional or grossly negligent conduct; a cap drafted without that limit in mind can be partly or wholly unenforceable exactly when it is needed.
- Whether a penalty clause (неустоока) is drafted to survive scrutiny. Bulgarian courts can reduce a contractual penalty that is disproportionate to the actual harm; a review checks whether the figure and mechanism chosen are likely to hold up rather than simply asserting a number.
- Whether the two language versions of a bilingual contract actually say the same thing. A Bulgarian/English contract with a discrepancy between versions, and no clear clause on which version prevails, is a dispute waiting to happen — and a common finding when reviewing contracts translated informally rather than by someone checking the legal substance in both languages.
- Whether the contract accounts for what happens if a party is a Bulgarian company that later enters insolvency. Ipso facto termination clauses (terminating automatically on the other party’s insolvency) are not always enforceable as drafted under Bulgarian insolvency rules, which changes how a prudent drafter should actually structure protection.
None of this is about making a contract longer. A short, well-drafted contract that has been checked against these points is worth more than a long one assembled from clauses that have never been tested against Bulgarian law.
Cross-border contract considerations
Most commercial contracts this practice reviews have a cross-border element — a foreign party contracting with a Bulgarian counterparty, or a Bulgarian company contracting abroad — and two EU-level frameworks recur constantly in that setting.
Governing law: the Rome I Regulation
Regulation (EC) No. 593/2008 (Rome I) determines which country’s law governs a contractual obligation where more than one country is connected to the contract. As a starting principle, the parties are free to choose the governing law themselves, and a clear governing-law clause is one of the simplest ways to avoid an argument later about which country’s rules actually apply. Where the parties have not validly chosen a law, Rome I supplies default connecting factors (typically pointing to the law of the country where the party carrying out the characteristic performance of the contract is based) that can produce a result neither side actually expected. A review checks not just whether a governing-law clause exists, but whether it is drafted broadly enough to cover the whole relationship and consistent with the dispute-resolution clause sitting next to it.
Electronic signatures: eIDAS and the Electronic Document Act
Regulation (EU) No. 910/2014 (eIDAS) creates an EU-wide framework for electronic signatures and their legal recognition across member states, implemented in Bulgaria alongside the national Electronic Document and Electronic Certification Services Act. In practice this means a contract can generally be validly signed electronically for most commercial purposes, but the level of electronic signature that is sufficient depends on the type of document and, for higher-stakes or specifically regulated transactions, Bulgarian law may still expect a qualified electronic signature or, for certain acts, a notarial form that electronic signing cannot substitute for. A review confirms which signing method is actually appropriate for the specific contract rather than assuming that any electronic signature is automatically sufficient.
Commercial-specific contract types under the Commerce Act
Beyond the general contract types listed above, the Commerce Act names several transaction types that carry their own specific rules once at least one party is a merchant, and a review that treats these as ordinary civil contracts rather than checking the commercial-specific layer can miss protections or obligations that only apply because of how the deal is actually structured.
- Commercial sale. Sale of goods between merchants carries its own rules on inspection, notice of defects and the time within which a buyer must act on them — generally stricter and faster-moving than the default civil-sale rules, which matters if a supply contract is silent on inspection procedure and the parties fall back on the statutory default without realising which default actually applies.
- Current account arrangements (текуща сметка). Where two businesses trade with each other on an ongoing basis and net off mutual claims periodically rather than settling each transaction separately, the Commerce Act treats that running arrangement differently from a series of standalone contracts — relevant to how a dispute over one invoice in a long trading relationship is actually framed and to how limitation periods run against the netted balance rather than each individual transaction.
- Commercial agency and mediation. Where a Bulgarian party is engaged to represent or introduce business on another party’s behalf, the Commerce Act sets rules on the agent’s authority, commission entitlement, and — a frequent point of dispute on termination — compensation due to the agent when the relationship ends, which a distribution or agency agreement needs to address consistently with the statutory position rather than in silent conflict with it.
- Bank guarantees. Where a contract is secured by a bank guarantee rather than a personal or corporate guarantee, the guarantee’s own wording — not the underlying contract — usually determines when and how it can actually be called, which is a separate document that needs its own review rather than being assumed to mirror the main contract automatically.
If a Bulgarian counterparty does not perform
A well-reviewed contract reduces the number of disputes that arise, but it does not eliminate the possibility that a counterparty simply does not pay or does not perform. Where that happens, the contract itself — specifically its termination, remedy and dispute-resolution clauses — becomes the starting point for what happens next, which is exactly why those clauses are reviewed as carefully as the commercial terms during drafting. An unpaid invoice under a supply or service contract generally follows the recovery routes described on the debt collection page; a more complex breach involving disputed performance, quality, or a terminated distribution relationship is assessed as a dispute on the business lawyer hub. Whether the dispute proceeds in the Bulgarian courts or in arbitration depends entirely on which forum the contract itself specifies, which is one more reason that clause is checked for consistency during the original review rather than left as boilerplate copied from an unrelated agreement.
Review versus drafting: how the work is scoped
A contract matter reaches this practice in one of two forms, each scoped slightly differently. A review of a contract someone else has drafted — a supplier’s standard terms, a distributor’s agreement, a counterparty’s NDA — produces a written opinion identifying risk and, where useful, proposed amendments or comments to negotiate. Drafting a contract from the client’s own side starts from the client’s commercial requirements and builds the document to reflect them while meeting the two-statute framework above. Both forms follow the same sequence: description of the deal and the documents already in hand, a conflict and fit check, a written scope and fee, then the substantive work. Neither begins before that written scope is agreed.
What this page does not cover
This page covers the drafting and review of commercial contracts and the general legal framework that governs them. It does not cover a dispute that has already arisen under an existing contract — see the business lawyer hub for that — and it does not cover consumer contracts, which carry separate consumer-protection rules not addressed here. It also does not cover the operational side of setting up a business relationship, such as registering a Bulgarian subsidiary to contract through; that is a company-formation matter for a business-services provider, not a contract-review matter for this practice.
Fees
Contract work is generally one of the more predictably scoped categories of business legal work, because the deliverable — a review opinion, or a drafted document — is usually well defined once the contract and its context are known. That said, this page states no default figure, because the actual scope still depends on the contract’s length, complexity and the number of open negotiation points. The professional fee and any third-party costs (such as certified translation, where needed) are set out in writing before the review or drafting work begins. See how fees are set for the general policy.
Frequently asked questions
Is a contract template downloaded online legally sufficient in Bulgaria?
It can be validly formed, but a template written for a different jurisdiction or a different specific deal often misses points that matter under the Obligations and Contracts Act and the Commerce Act — unenforceable penalty clauses, liability exclusions that do not hold up, or a governing-law clause that conflicts with the dispute-resolution clause next to it. A review checks these specifically rather than assuming a template is automatically fine because it looks complete.
What is the difference between the Obligations and Contracts Act and the Commerce Act for a business contract?
The Obligations and Contracts Act is the general civil-law framework that applies to any contract. The Commerce Act adds specific rules that apply where at least one party is a merchant carrying out commercial activity, covering things like commercial sale and current-account arrangements. Most business contracts sit under both, and a proper review checks both.
Can our contract simply choose English law to avoid dealing with Bulgarian rules?
The parties can generally choose a governing law under the Rome I Regulation, and a clear choice-of-law clause is often sensible. But choosing a foreign governing law does not remove every Bulgarian-law consideration — mandatory rules of the place of performance and how a Bulgarian court would actually enforce a foreign-law judgment can still matter, and this needs to be assessed rather than assumed away by the clause.
Are electronic signatures valid on a Bulgarian commercial contract?
Generally yes, for most commercial purposes, under the eIDAS Regulation and Bulgaria's Electronic Document and Electronic Certification Services Act. Certain higher-stakes transactions or specific legal acts may require a qualified electronic signature or a notarial form that ordinary electronic signing cannot substitute for, which is checked as part of the review.
We have a Bulgarian/English bilingual contract — which version controls if they conflict?
Only if the contract itself says so. A well-drafted bilingual contract states explicitly which language version prevails in case of discrepancy; if it does not, and a real discrepancy exists, that becomes a point of dispute in itself — something a review checks for before signature rather than after.
Can a penalty clause in our contract actually be enforced at the amount we wrote?
Not automatically. Bulgarian courts can reduce a contractual penalty found to be disproportionate to the actual harm suffered. A review assesses whether the amount and mechanism chosen are likely to survive that scrutiny rather than simply confirming that a number has been written down.
Do you draft contracts from scratch, or only review contracts someone else wrote?
Both. Drafting from the client's own commercial requirements and reviewing a counterparty's draft are both part of this practice's scope, each scoped and fee-quoted in writing before the work begins.
What happens if a dispute arises under a contract you reviewed?
A contract dispute is a separate legal matter from the original review and is assessed on its own terms — see the business lawyer hub for how a dispute is handled. Having reviewed the underlying contract can be useful context but does not itself determine the outcome of a later dispute.
How long does a commercial contract review take?
It depends on the contract's length and complexity and how many open points need checking against the two-statute framework. A realistic timeframe is confirmed once the actual document has been seen, not quoted in advance of that.
Is there a fixed price for a standard NDA review?
No default figure is published, because even a short document can raise points that need real review — an overbroad confidentiality definition or an unenforceable remedy clause, for example. The fee is confirmed once the specific document has been reviewed for scope.
Do you review contracts for consumer transactions, not just business-to-business ones?
This page and this practice's scope focus on commercial contracts between businesses. Consumer contracts carry separate consumer-protection rules not addressed here and are outside the scope of this page.
What is a current account arrangement, and why does it matter for a supply relationship?
It is where two businesses trading with each other on an ongoing basis net off mutual claims periodically instead of settling each delivery separately. The Commerce Act treats this running arrangement differently from a series of standalone contracts, which can affect how a dispute over one invoice within a long trading relationship is actually framed and how limitation runs against the balance.
Our distribution agreement is ending — is the agent or distributor owed compensation?
Where the relationship is a commercial agency rather than a straightforward distributorship, the Commerce Act can entitle the agent to compensation on termination in defined circumstances. Whether that applies, and how much, depends on how the relationship was actually structured and needs to be checked against the specific agreement and conduct.
Is a penalty clause automatically enforceable just because both sides signed it?
No. The Supreme Court of Cassation has directly addressed this: in Interpretative Decision No. 1/2009 (ОСТК, 15 June 2010), it held that a contractual penalty is not automatically void simply for being large, but a court can still find it invalid, or reduce it, where the agreed penalty steps outside the penalty clause's recognised functions (securing performance, compensating loss, and sanctioning breach) — assessed against the actual harm once non-performance occurs, not against the figure written into the contract in isolation.
Does a supply contract need to be in writing to be enforceable under Bulgarian law?
Most commercial contracts are validly formed without a specific written form, provided the essential terms were actually agreed. In practice, an unwritten commercial arrangement is considerably harder to prove and to enforce, which is itself one of the more common reasons a contract review is asked for only after a dispute has already started rather than beforehand.
Sources
- Obligations and Contracts Act (Bulgaria) →
- Commerce Act (Bulgaria) →
- Regulation (EC) No. 593/2008 (Rome I) — law applicable to contractual obligations →
- Regulation (EU) No. 910/2014 (eIDAS) — electronic identification and trust services →
- Electronic Document and Electronic Certification Services Act (Bulgaria) — consolidated legislation portal →
- Interpretative Decision No. 1/2009, OSTK of the Supreme Court of Cassation (15 June 2010) — excessive contractual penalties →
This page describes the general legal framework for Bulgarian commercial contracts. It does not state findings, deadlines or outcomes for any specific contract, which depend on its actual wording and are confirmed once a matter is reviewed.