Questions and answers: contract formation in Bulgaria.

Forming a contract

The need to use good faith in negotiations

Is there an obligation to use good faith in contract negotiations?

Yes.Bulgarian law clearly requires the parties to negotiate in good faith. Failure to do so makes the parties liable to indemnify their negotiating partners. For example, if one party negotiates the sale of real estate knowing that it does not intend to enter into a binding contract, it will be liable for the costs clearly incurred by the negotiating partner, for example, to assess the value of the property to be sold.'''Similarly, if the parties are negotiating a joint venture, but one of the partners abandons the negotiations before entering into the joint venture agreement in favor of a different use of the assets it could have contributed to the venture, that person is likely to be liable to reimburse its counterparty for the costs to its counterparty incurred during the negotiations, at least from the time it should have notified its counterparty of the alternative use.

The "battle of the forms" dispute.

How are "battle of the forms" disputes handled in your jurisdiction?

Bulgarian law (as well as other civil legal traditions) seeks to define a common conciliatory intent between contractual parties:'' 'joint will. In other words, a contract arises only if the parties agree on important terms. The question of importance may be a matter of agreement (e.g., price and quantity in contracts for the supply of goods) or may be determined by the court at a later date, based on the characteristics of the parties' bargain and what appears to be important to it. Failure to agree on minor terms of an agreement is not crucial to a contract; therefore, if the parties exchange offers that are contradictory, there will be a contract only if the offer and counteroffer or acceptance agree on some minimum set of terms. Courts seek to determine what this is based on the circumstances of the case.

Language'. 'requirements

Is there a legal requirement to draw up a contract in the local language?

Contracts valid under Bulgarian law or intended to be performed in Bulgaria may be drawn up in one or more languages and do not have to be in Bulgarian (the official language of Bulgaria).

Signatures and other formalities of execution

In what circumstances are signatures or other formalities required for the execution of commercial contracts in your jurisdiction? Is it possible to enter into a B2B contract online (e.g., using''click to accept' process)? Do electronic and digital contract signatures recognize the legality of electronic and digital contract signatures? If so, how are they treated in comparison to ink typed signatures?

Formalities

The default position is that contracts are considered oral unless they are required to be in writing (parties generally prefer written evidence for clarity and proof). An additional important requirement for writing is that contracts with a value of BGN 5,000 must be proved in court proceedings by providing written documentary evidence - this means that if there is no requirement to enter into a contract in writing, at least the requirement to''provision of written evidence is mandatory.

The requirements for electronic and online contracts

Electronic contracts are considered 'in writing' if they are signed with a qualified digital signature or simpler forms of digital signature, but only if the parties have agreed to the use of these forms and the electronic form. Consequently, B2B contracts can be entered into online. In any case, a merchant cannot invoke the invalidity of a contract for lack of a form if it has partially executed the contract.

Signatures

If one party offers an online contract and informs its counterparty in detail about the process of performance (e.g. that the 'click to accept' process''treated as an ordinary signature and has the same meaning as a handwritten signature) and the other party accepts the terms, a binding contract arises between the parties.