Before Signing a Business Contract in Bulgaria: A Practical Review Checklist

1. Identify the party that must perform

Check the exact legal name, registration number and signing arrangements. A trading name, group brand or email signature does not identify the legal entity that owes you performance. Where a representative signs under a power of attorney, check its scope and any required form. Also identify any corporate approvals relevant to the transaction.

A company registration check is a starting point, not proof that the counterparty has the money, assets, licences or staff needed to deliver. Match the depth of the checks to your exposure.

2. Make the scope and acceptance test usable

Replace broad promises with a description of deliverables, specifications, deadlines and dependencies. State who supplies information or access and what happens if it arrives late. Check whether the annexes, offer and general terms say the same thing and specify which document prevails if they conflict.

For services or project work, set out how delivery is recorded, how the client raises objections and how defects are addressed. An acceptance mechanism should not make payment depend indefinitely on one party’s discretion.

3. Follow the money through the agreement

Identify the price, currency, VAT treatment, invoice requirements and payment dates. Distinguish an advance, a security deposit and earnest money: using the word “deposit” does not settle the legal consequences. Decide whether payment should follow defined stages and whether security is proportionate to the amount at risk.

Example: a supplier buys materials before the first payment becomes due, but the draft lets the customer cancel at any time without addressing those costs. The review should identify that exposure and negotiate an appropriate allocation. This is an illustrative scenario, not a reported client matter.

4. Read liability provisions together

Check the penalty clauses, liability cap, exclusions, indemnities and remedies as a whole. Under Article 94 of the Obligations and Contracts Act, liability for intentional misconduct or gross negligence cannot be excluded or limited in advance.

Do not assume a court will simply reduce a high penalty. Article 309 of the Commercial Act excludes reduction on the ground of excessiveness for a penalty due under a commercial transaction between traders. Questions of validity and other legal objections require their own assessment.

5. Understand the exit before entering

Separate expiry, termination by notice, termination for breach and termination by agreement. Check notice addresses, delivery methods, cure periods, outstanding payments and obligations that survive. A clause allowing cancellation may still leave fees, compensation or handover duties payable.

The statutory rules on rescission for breach must also be considered. Article 87 generally requires an appropriate period for performance accompanied by a warning, with specified exceptions; the warning must be written where the contract is written. Some transactions require a court procedure.

6. Check law, forum, language and signing

Governing law and dispute forum answer different questions. Consider where a claim would be brought, likely costs and where assets are located. Special rules may protect employees and consumers; an arbitration clause is not suitable for every relationship.

For a bilingual agreement, compare both versions and specify how discrepancies are resolved. Confirm the required form and signing method. A scanned signature or an electronic acceptance should not be assumed to satisfy every statutory form requirement.

What to send for legal review

• The complete current draft, all annexes and any incorporated general terms.
• The commercial offer, relevant correspondence and earlier agreements being replaced.
• The parties’ details, your business objective and the maximum exposure you can accept.
• The intended signing date and any payment, delivery or termination deadline.

Ask for prioritised comments: essential legal corrections, substantial commercial risks and optional improvements. This makes negotiations more focused than treating every wording preference as equally important.

Is a template enough?

A template can provide a structure, but it does not verify the parties, the required form or how your transaction operates. It should be adapted to the actual deal and checked together with its annexes.

Can a signed contract still be reviewed?

Yes. The focus changes to existing obligations, amendment options, deadlines and remedies. Do not assume that a later review allows you to disregard a term or stop performance.