Legal term for payments in Bulgaria

Yes, the payment term legislation in Bulgaria for commercial transactions is stipulated in the Commerce Act. The relevant provisions of the Commerce Act transpose EU Directive 2011/7/EU on combating late payment in commercial transactions. 

Per the Commerce Act, if the parties have not agreed otherwise, the payment term is 14 days as of the day of receipt of the invoice or another payment invitation. In case of delivery of goods where the buyer has the right of inspection and/or acceptance of the goods, the payment term begins after the inspection is completed or on the day of the acceptance, respectively. 

Under Bulgarian law, the parties to a commercial transaction are free to set the payment term in the agreement, but it should be up to 60 days. A longer payment term may be stipulated in a contract by exception in duly justified circumstances or if the nature of the goods or services requires it. However, any extension beyond 60 days should not breach the principles of good faith and should not be grossly unfair to the creditor.

The maximum payment term for transactions that include a public contractor can be 30 days. In this case, negotiating a term exceeding 30 days is also possible given that the above conditions are met, but the term cannot exceed a maximum of 60 days. 

Yes, assuming that the PO is a standard contract or refers to the framework contract and given that the conditions specified above are met. 

If the term agreed upon between the parties is not in conformity with the legislation, the creditor may claim in court that the respective contractual provision is grossly unfair and therefore unenforceable.  If such a claim is considered meritorious, the court would apply the statutory provisions to determine the payment term for the respective transaction. 

In case of a payment default by the debtor, and unless the parties explicitly agreed on the consequences of such a default, the aggrieved creditor shall be entitled to receive compensation for the delayed payment in the amount of the statutory interest for delay and a compensation for recovery costs of not less than EUR 40, without the necessity of a reminder.  The creditor may claim damages exceeding the statutory compensation, but would bear the burden to prove the amount of the damages. 

Initially, the Bulgarian parliament adopted a provision that until the revocation of the state of emergency related to the COVID-19 pandemic in Bulgaria, no default interest or liquidated damages would be due as a result of a delay on payment obligations. Furthermore, creditors were not allowed to enforce acceleration clauses, terminate relevant contracts or seize movable assets in the event of payment delays during this period.

However, after wide public debate, the scope of the original provision was limited only to payment delays under loans and other forms of financing, such as factoring, forfeiting, and financial leasing provided by banks and financial institutions. 

The above rules also apply to transactions concluded by artisans and freelancers. However, these rules do not apply to bills of exchange, creditor’s claims incurred within insolvency proceedings, damages in tort claims and insurance claims.