Basic provisions of the Service Agreement (+ sample service agreement)

The Service Agreement it has wide application in commercial turnover and occupies a central place in relations between companies and citizens, alongside supply contracts.

A key point in the subject of the contract is the possibility of one person assigning another to perform certain factual actions (work).

For some services, there are special regimes for exercising the right to carry out the activity, such as medical, design, tourist and others.

In Bulgaria, the contract for services does not have an explicit legal definition, and in this regard it belongs to the large group of unnamed contracts. Due to the lack of legislation, the rules of the contract for production (art. 258 - art. 269 of the Law on Obligations and Contracts (LLC) are also applicable to the different types of services. It is necessary to indicate the clause and the legal act from which the sentence is taken and the hyperlink to the source (official website with the legislation). Unfortunately, in Bulgaria we do not have an official website with the consolidated norms. This is the address of the state gazette: https://dv.parliament.bg/DVWeb/index.faces, where only the changes are published in the texts. You can use https://lex.bg/laws/ldoc/2121934337, but this is not official).

Sides

The law states that in the contract for production, the contractor undertakes to produce something at his own risk, according to the order of the other party, and the latter - to pay remuneration (Article 258 of the Civil Code).

Unless otherwise agreed, the contractor is obliged to produce the ordered item with his own funds. The contractor is obliged to immediately warn the other party if his design or supplied material is not suitable for the proper execution of the work, and to request the necessary changes to the design or supply of suitable material. If the other party fails to do so, the contractor may withdraw from the contract. If the contractor does not give this warning, he is liable to the other party for the damages caused (Art. 259 and Art. 260 of the Civil Code).

It is important to pay special attention to the norm of Art. 9 of the Labor Code, which regulates the freedom of negotiation between the parties. This freedom is expressed in the possibility for the parties to enter into a contract with content freely determined by them ( Metodi Markov: Obligation Law – Modus Studendi, S. 2011 ), although not regulated by law, as long as these stipulations do not contradict imperative normative provisions and good manners.

Reward

An essential condition of practical importance is given in the provision of Art. 266 of the Civil Code, which states that the client must pay the remuneration for the accepted work. If the remuneration is agreed on unit prices, its amount is established upon acceptance of the work. If, during the execution of the contract, the duly determined price of the material or labor is changed, the remuneration is changed accordingly, even if it was agreed in full.

Way of implementation

The contractor is obliged to carry out the work in such a way that it is fit for its ordinary or intended purpose in the contract. The contractor, who performs the work with his own material, is responsible for the good quality (Art. 261 ЗЗД)

According to Art. 262 ZZD , the ordering party can check the performance of the contract at any time, as long as it does not interfere with the contractor. If it becomes clear that the contractor will not be able to perform the work on time or that he will not perform it in the agreed or proper manner, the client can cancel the contract, being entitled to compensation according to the general rules.

The rules regarding the risk of accidental death or damage to the material are regulated in Art. 263 of the Civil Code , according to which the risk is borne by the party that gave it, if the other party is not in default.

Basic principle laid down in Art. 264 of the Civil Code, is related to the acceptance of the work, specifying that the client is obliged to accept the work performed according to the contract. On acceptance he must examine the work and make all objections to improper execution, unless they concern such defects as cannot be discovered in the ordinary way of acceptance or appear later. The ordering party must notify the contractor of such defects immediately upon their discovery. This is not necessary if the contractor was aware of the defects. If he does not make such objections, the work is considered accepted.

Issues related to deficiencies, deviations, cancellation and prescription are regulated in Art. 265 of the Civil Code , in which the text states that if the contractor deviated from the order during the performance of the work or if the performed work has deficiencies, the ordering party may request:

• correcting the work within a reasonable time given by him without payment;
• payment of the costs necessary for the repair, or a corresponding reduction of the remuneration.

If the deviation from the order or the defects are so significant that the work is unfit for its contractual or ordinary purpose, the client may cancel the contract. These rights are repaid in six months, and in the case of construction works - in five years.

In case of subsequent objective impossibility according to Art. 267 of the Civil Code, if the performance of the work becomes impossible due to a reason for which neither party is responsible, the contractor is not entitled to remuneration. If a part of the work has been performed and can be useful to the client, the contractor is entitled to the corresponding part of the agreed remuneration. It should be noted that the contractor has the right to remuneration if the execution of the work has become impossible in whole or in part due to the unsuitability of the material or the project given by the client, and the contractor has warned him in a timely manner.

If there are good reasons, the client can withdraw from the contract, even if the performance has begun, by paying the contractor the costs incurred, the work done and the profit that he would have received from the performance of the work. (Art. 268 ZZD)

According to Art. 269 of the Civil Code, upon termination of the contract, the customer must pay for the work performed and the materials usefully invested in accordance with the agreed remuneration. If the contractor dies or becomes unable to perform the work, the contract is terminated, unless it was made with regard to the person of the contractor and his heirs agree to continue the performance.

Outside of the stated conditions, as with most contracts, the parties can agree on any other additional clauses that do not contradict the law and morality, the most common being those related to the performance of the contract, such as the obligation to provide a guarantee, various types bets, sureties and others. In order to protect the rights and interests of the parties, it is customary to include clauses for the observance of confidentiality, a certain mode of occurrence and exercise of copyright and others.

You can find more information in the other articles on the site.