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Contract Law
Primarily the Law on Obligations and Contracts (LOC), which was promulgated in 1950 and has been in force since January 1, 1951, governs contractual relationships in Bulgaria. LOC is the fundamental law in contracts and is an original Bulgarian normative act created in line with the classical traditions of the continental (French-German) legal system. It has undergone two major amendments. The first, in 1993, was designed to bring the legal framework of contracts in conformity with the post-1989 changes in Bulgaria. The second, in 1996, transferred certain contracts — commission merchant contract, forwarding contract, contract of carriage, insurance contract, the bill of exchange, the promissory note, and the check, and their legal regulation — from the LOC to the Commerce Act, Part III.
Considered the cornerstone of Bulgarian civil law, the LOC is considered Code and the primary source for contract law in Bulgaria providing a comprehensive legal framework for general contracts as well as for more specialized agreements.
The demand for contract law reform in Bulgaria is not as high as in other areas of commercial law reform, because practitioners, judges, and business entities are relatively comfortable with existing legislation. Criticism is restricted to areas of implementation and enforcement. Greatest frustration is felt with the efficiency of the judiciary, which needs serious reform to secure proper enforcement of commercial contracts and execution of court and arbitration judgments.
(Note: This information was taken from the Contract Law chapter of the 2002 Bulgaria BizCLIR report. For more information, please see the report.)
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