If the law of contract is the capital of civil law, the central square of that capital is called “Contract of Sale”.
The first Bulgarian sale contract definition comes from the first Bg Law on Obligations and Contracts of 1892 (LOC 1892) which was adopted 14 years after the Bg Liberation from the Turks in 1878. That LOC 1892 was almost a direct translation of the Italian Codice Civile of 1865 which in turn was an extension of the French Code Civil of 1804. The reason why Bulgaria did not accept directly Code Civil or the Austrian ABGB of 1811 was because of the jealousy of the Great Powers at the time to keep Bulgaria equally apart from legal proximity with any of them. And the German BGB did not exist yet. The Italian Codice was the acceptable compromise also because that same year 1892-1893 the Bulgarian king married an Italian princess.
After the Second World War and the communist take over the LOC 1892 was replaced by the LOC 1950 which preserved the framework concept of the French contractual system but was flooded with lots of anti-market and anti-contractual freedom provisions. That LOC 1950 is still acting today having been cleared of its worst communist features.
So far as the Contract of sale in LOC 1892 is concerned it was a copy of the Code Civil concept for a consensual contract which was preserved in the LOC 1950. The sale was considered perfect by the simple consent of the parties and the title of ownership is considered transferred from seller to buyer by the same simple consent for concluding the contract. I.e. the consent in the Bulgarian contract of sale has two functions: for conclusion of the contract and for the transfer of title simultaneously. Therefore the Bulgarian sale does not need a hand over of the sold object (like in Austria) or a second consensus (like in Germany) in order to transfer the property.
Payment of the price is also not a condition for transfer of the title- like the hand over isn’t. Only the consent for the due price suffices.
Price payment and hand over should be simultaneous with a number of exceptions. (but not the title transfer).
There is one exception for preservation of title on movable objects till full price is paid- art.205 LOC-1950 but that is only when the price is paid in installments i.e. title is preserved till payment of last installment. But that exception has to be expressly provided for in the Bg contract of sale and only for the case of installments payments for movable objects.
Another important feature of the Bulgarian sale is that its consensual nature for simultaneous conclusion and transfer of title is an imperative monopoly with no alternative option- Bulgarian law does not have the flexibility e.g. of the UK sale where the exact mode of transfer of property can be chosen by the parties among the available systems.
There is one special qualification to the transfer of property by consensus. That is the principle for specifically individualized movable objects like a given chair, a given machine etc. BUT if the object of sale is a generic good like sugar, oil, milk etc., the transfer of property passes when the parties specify/appropriate the specific bulk of the generic good to the contract or by the hand over of the bulk from seller to buyer. However this hand over is not a waiver of the consensual nature of the ownership transfer. On the contrary, the hand over is a physical form of the same consensus where the parties manifest their consent by specifying through the hand over which is exactly the sold quota quantity of the bulk appropriated to the specific contract. And then the title passes on the basis of this manifestation of consent though it does not mean that in this instance the Bg sale switches to the Austrian sale for title transfer by hand over of possession.
It can be recalled that the consensual transfer of ownership together with the consent for the contract’s conclusion comes as a concept from the Dutch father of Natural law- Hugo Grotius-who made that suggestion in his major work “About the Law of War and Peace” written in 1625 in Paris. The French took it from him and and then through Code Civil spread it in Europe.
The currently acting LOC-1950 has not changed the basic nature of the Bulgarian contract of sale as it was defined in 1892. Unlike the Italian Codice Civile of 1865 which was replaced by the improved Codice Civile of 1942, the acting Bulgarian LOC-1950 stays with the sale standards of Codice Civile 1865.
The above explains why sometimes foreign sellers applying Bg law are surprised to learn that title has passed to the buyer before payment of price and that the buyer has in turn resold the object to a third party before paying them the price. This does not mean that the seller is helpless in such an instance- he can terminate the sale contract because of default for non payment of price by his buyer and then turn to the second buyer to repossess the object but that is a too big and uncertain complication.
It is curious to realize why the Code Civil systems have readily adopted this consensual concept of sale’s conclusion and transport of title. The reason is simple and obvious: if the title transfer is automatic and is carried by the consent it means that the parties will not need to perform themselves the title transfer by an additional deed since it happens automatic. Better said: by virtue of the consent it is considered to have happened. If the title transfer is not a matter of performance it means it cannot be subject to mispreformance. So title transfer is performed regardless of the will/discretion of the parties i.e. its accomplishment is guaranteed by the law. This the the beauty of the consensual model of title transfer- it cannot fail. Whereas if you must hand over in order to pass title, that hand over may or may not happen.
Another Bg peculiarity is that the sale of another’s object by a non owner is valid and not null and void. This is a deviation from the rule “Nemo dat quod non habet”. Under the current interpretation of the law in case of sale of a non-own object the seller’s promise is to acquire the title of the object within reasonable time and then automatically pass it on to the buyer.
Unlike UK law Bulgarian law of sale recognizes the bona fides/good faith as a general standard of diligent delivery. However in Bulgaria the phrase used is “good conscience” rather than “good faith” and this verbal shade comes from the Orthodox bible. Yet the function is the same like bona fides in all the rest of continental Europe.
The Bulgarian model of sale is not adapted to all options of consumer sale. The consensual concept is simply inadequate in a big moll to claim that a chocolate is yours from the moment of taking it from the shelf or the gasoline just tanked in your car is your own from the moment of tanking but before paying it. Tuning Bulgarian law to consumer sales is a challenge of the near future.
Bulgaria is a full party to the UN Convention for the International Sale of Goods-1980. Yet one should keep in mind that this Convention can be contractually derogated by the parties and that the Convention does not regulate the contract’s validity and the transfer of ownership title.
Bulgaria accepts and applies INCOTERMS-2010.
Bulgaria is anxiously looking forward to the forthcoming EU Regulation for the Common European Law of Sale in its draft version of 11.10.2011. Yet it should be remembered that this Regulation will be a second optional national regime of sale and not a piece of private international law although it shall apply to crossborder sales of movable objects. But the Regulation shall not regulate contarct’s invalidation, representation and transfer of title- they will stay within the primary national solutions.
The main improvement that the current Bulgarian system of sale needs is to break away from the consensual monopoly for transfer of title by virtue of the contract’s conclusion only. It should follow some European examples where the sale contract allows the parties the liberty to choose the method of title transportation which could be the French, the Austrian, the German or the UK one. This will make the Bulgarian contract of sale a flexible module for decking with other systems of sale to the benefit of business. Currently that multiple interface is achieved by choice of foreign substantive law to govern the sale contract.
20.01.2014 Valentin Braykov
For more information on this subject you can see Valentin Braykov, The Contract of Sale – a Companion of Civilization, published by SIBI, 2014, Sofia regretfully available only in Bulgarian as: Валентин Брайков, Договорът за продажба-спътник на цивилизацията, издателство СИБИ, 2014г., София