The Mandate contract according to Bulgarian law

The term

The commissioner assumes the obligation to perform on behalf of the client the acts for which he is commissioned by the client. (article 280 of the law of obligations and contracts). The regulations of this contract are to be found in articles 280 to 295 of the law of obligations and contracts. The subject of the mandate contract is the performance of actions – whereby according to the Bulgarian law the mandate includes only legal actions, factual actions are regulated by the contract for manufacture.

The mandate is a unilateral and, according to its definition, gratuitous contract. Though, it is possible payment to be agreed (resp. article 286 of the law).

Rights and obligations of the parties

According to Article 281 of the law of obligations and contracts, the commissioner shall perform the mandate with due diligence and shall protect the property received in connection therewith. The commissioner may act in two different ways: in the name and on the account of the client (direct representation) or in his own name and on his own account (indirect representation - article 292 (1), (2)). The commissioner may authorize third parties with his rights if this has become necessary for the protection of the client's interests provided that failure to do so would have resulted in damage to the client (article 282 of the law).

According to article 283 of the law of obligations and contracts, the commissioner has to perform the mandate personally. He is entitled to assign it to another person if he is authorised to do so by the client or this has become necessary (see above). In this case, the commissioner must immediately notify the client of this substitution. The commissioner that has not been entitled to assign its mandate rights is liable for the damages caused by the third party; the commissioner who is entitled to authorise another person shall be liable for any damage caused by his poor choice of a substitute.

The commissioner is obligated to inform the client about the performance of the mandate. He is also obliged to provide an account to the client and deliver to him everything he has received in the performance of the mandate (Article 284 of the law mentioned above). Upon request, the client must deliver to the commissioner the means necessary for performance of the mandate and recover the expenses made by the latter, plus interests and damages suffered in connection with the performance of the mandate. (Article 285 of the law of obligations and contracts)

Article 292 of the law contains the regulations regarding the relationships between the client, the commissioner and any third parties: “If the commissioner acts on behalf of the client as a direct agent, the rights and obligations from transactions effected with third parties shall arise directly for the client”.

If the commissioner acts in his own name, the rights and obligations arising from contracts with third parties are binding upon him. However, in the internal relationship between the commissioner and client, as well as with respect to third mala fide parties, these rights shall be deemed rights of the client. These rights shall also be deemed rights of the commissioner with respect to the bona fide creditors of the client provided that the contract of mandate has a verifiable date preceding the distraint.

It must be emphasized that, according to the law, only the rights and not the debts reflect on the cliet. The liability for debts is placed on the commissary; third parties may raise claims against the commissioner.

Another peculiarity of the order is the form of the contract. Generally, no specific form is required – only if the order regards the acquisition of property rights on real estate, the contract must be concluded in written form and the signatures must be notary certified.

Termination of the mandate

Being related to the personality of the parties, the mandate is terminated with the decease or the legal incapacity of one of the parties or with the dissolution of the legal person of the client or commissioner. Other grounds for the termination of the mandate are provided for in article 287 of the law of obligations and contracts: the withdrawal of the mandate by the client, the rejection by the commissioner and the general termination grounds regulated under the law. According to article 288 of the law, the withdrawal of the mandate does not deprive the commissioner of the right to demand payment of expenses or the remuneration agreed.

Upon termination of the mandate due to death, placing under interdiction or dissolution of the legal entity, the heirs, guardian, trustee or the liquidator shall immediately notify the other party thereof and shall undertake the due measures for protecting the interest thereof. (Article 291 of the law of obligations and contracts).

According to Article 289 of the law of obligations and contracts, a commissioner who renounces the mandate without good grounds and fails to promptly notify the client thereof shall be liable for compensation for the damages caused by his renunciation.