CHANGES TO THE COMMERCE ACT
(IN FORCE AS OF 01 MARCH 2013)
Changes to the Bulgarian Commerce Act (“the CA”) were published in State Gazette, issue No. 20 as of 28.02.2013, and enter into force as of 01.03.20131.
The published amendments transpose Directive 2011/7/EU on combating late payment in commercial transactions (“the Directive”) and aim at reaction against the commonly used practice of late payment well after the deadline between traders and by public authorities, as well.
Below is a brief article on the main changes to the CA.
The new provisions of the CA distinguish two important moments in determining payment deadlines in commercial transactions:
- When both parties wish to define the payment period
Parties in a commercial transaction may agree on a payment period not longer than 60 calendar days. When the debtor is a public contractor2, the maximum payment period should be 30 calendar days.
This is the main rule but two exceptions are envisaged when parties may agree on longer payment period:
(i) when the nature of the product or the service demands it; or
(ii) for another important reason.
It is important that in both cases the CA requires that the contractual clause for longer payment period does not constitute a gross abuse of the creditor’s interest and good faith.