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Contracts with an International Element Have Choice of Applicable Law - International Law Office

International Law Office

Company & Commercial - Bulgaria

Contracts with an International Element Have Choice of Applicable Law

April 26 2004


A section has been introduced to the Obligations and Contracts Act with regard to the law applicable to agreements with an international element. Thus, an area of contract law now has mandatory regulation, contrary to previous practice.

Any significant component of a contract (eg, place of delivery, subject or parties) is an international element if it involves foreign parties or has international implications. The existence of such an element allows parties to introduce a choice of foreign law provision with regard to the merits of the contract. This law would apply to the conclusion, interpretation, performance and amendment of the contract, as well as to the settlement of disputes. However, the choice of law cannot repeal the effect of mandatory provisions, either of Bulgarian law or of the law to which the contract is mostly closely related. Furthermore, the provisions of the selected foreign law must not violate the principles of Bulgarian public order.

Where parties have not agreed on the applicable law, the contract is governed by the law of the country to which it is mostly closely related.


For further information on this topic please contact Anelia Dinova or Boyan Kirtchev at PI Partners by telephone (+359 2 986 26 22) or by fax (+359 2 980 15 36) or by email (anelia.dionva@bg.eylaw.com or boyan.p.kirtchev@bg.eylaw.com).



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