The debtor’s default according to Bulgarian law
If for the performance of an obligation a time limit has been fixed, the debtor is in default when he is unable to meet the obligation within this time limit. If there is no date fixed for the performance, the debtor is in default after the creditor’s request for performance. If the obligation arose due to a tort action, the default for the payment of the damages occurs without a request, from the date of the tort.
If the debtor is in default, he must pay damages even if the performance becomes impossible for reasons for which he is not responsible unless he can prove that the creditor would have suffered the loss/damage also in case of a timely performance.
Damages due to a default
The damages due to a default encompass the suffered damages as well as any lost profit, provided that the suffered damage is directly linked to the default and the profit could be expected under the contract. If the debtor did not act in good faith, he is liable for all direct and indirect damages.
According to Article 83 of the Bulgarian law of obligations and contracts, the court may reduce the damages owed or indemnify the debtor from all liability if the non-performance was caused by factors in the creditor’s sphere of responsibility. Damages that may have been prevented by the creditor with the diligence of a good businessman are not to be recovered by the debtor.
According to Article 95 of the law of obligations and contracts, the creditor defaults if he does not accept the delivery/performance offered by the debtor or if he does not cooperate when this is required for the fulfillment of the obligation.
If the creditor is in default, the risk shall pass upon him; if the debtor is in default as well, the creditor is released from the consequences in case of a impossibility of performance. The expenditures that were made due to the creditor’s delay go on the creditor’s account.
Depending on the type of obligations
a) If the subject of the obligation is the delivery of an item and the creditor defaults, the creditor may exonerate himself by handing over the item for safekeeping to the district court at the place of performance. Money, securities and objects of value may be handed over for safekeeping to the bank at the place of performance without the permission of the court. If the respective item consists of perishable goods or if the safekeeping produces disproportionately high costs or inconveniences, or if it cannot be stored due to its nature, the debtor may apply to court for its disposal and deposit the proceeds at the bank into the name of the creditor. The handover for safekeeping remains without effect if the debtor withdraws the invested money before it may have been accepted by the creditor.
b) If the subject of the obligation is not related to the delivery of an item and if the creditor refuses the performance or his duty to cooperate, the debtor may withdraw from the contract and holds the right to claim damages/compensation due to the creditor’s default.