Договорите за изработка и строителство и промяна на възнаграждението

Contracts for construction and change of remuneration

Commentary on Art. 266, para. 2 of the Obligations and Contracts Act

Content

In both production contracts and construction contracts, the question of the scope of application of Art. 266 of the Obligations and Contracts Act (OCA), when there are shocks in the prices of materials, energy, labor or in general in the economy. Para. 1 of Art. 266 states that the ordering party must pay the remuneration for the accepted work, a if the remuneration is agreed on unit prices, its amount is established upon acceptance of the work. Al. 2 of Art. 266 of the OCA states that 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.

In regard to Art. 266, para. 1 of the OCA it should be emphasized that the rule foresees the possibility of a non-fixed final price of the construction, on a contractual basis, which final price should be determined by preparing a bill of quantities for the individual construction and installation works[1], or e.g. by using Act No. 19 as a basis for payment[2], if a similar clause in the construction contract so provides[3]. Similar rules can be negotiated between the parties, incl. in the event of inflationary changes, changes in tax legislation, etc., as provided for in the FIDIC standard contracts (Federation internationale des ingenieurs-conseil)[4].

The previous regulation

The current Law on Obligations and Contracts was adopted on November 22, 1950 and has been in force since January 1, 1951, and pursuant to § 4, item 1 of the Transitional Rules, repeals the previously effective Obligations and Contracts Act (Promulgation, SG No. 268 of December 5, 1892, effective March 1, 1893). It is extremely curious that the canceled OCA not only lacks a provision similar to the current Art. 266, para. 2 OCA provision, but in fact there is one in the opposite sense.

Art. 397 of the OCA (repealed) states that "When an architect or an entrepreneur has fully undertaken the construction of a building, according to the established and stipulated plan with the owner of the place, he cannot claim any increase in price, either on the pretext that the price of the work or material has increased, or on the pretext that there have been changes or increases, in the plan, if such changes and additions have not been authorized in writing and their price has not been agreed upon with the owner.". The text is taken verbatim from the French Civil Code (Art. 1793[5], Code Civil, 1804) and from the Italian Civil Code (Art. 1640[6], Codice civil, 1865 - 1942), as well as, in fact, the OCA itself (repealed), which for the most part is a literal translation from the said codices[7].

The application of the provision in force at the time did not create particular difficulties - it was accepted that it violated the basic principle of the law of obligations, that contracts are the law of the parties and that they cannot be amended without mutual consent, as the norm of Art. 397 of the OCA (repealed) is not imperative. It was accepted that when the price in the construction contract was agreed in full (single price), all the accounts and expectations of the entrepreneur (the building contractor) are not an element of the contract and bad accounts are at his risk. On the same grounds, it was assumed that the owner (the contractor) he could not ask for a price reduction on the pretext that there had been a fall in the prices of labor or material. The price change was allowed only if this was previously agreed between the parties in writing[8]. The existence of the provision is explained by the purpose of protecting the owner-contractors against the fraudulent practices of the contractors and architects who, after starting work, encountered unforeseen difficulties that required large unexpected expenses.

The judicial practice of that period[9] holds that the provision may not apply where the construction of a building has been agreed at unit prices and not at one total price (on a dime), and in these cases a price change could be requested[10]. It has also been held that when the established plan (quantitative account) is changed slightly, even with the consent of the contracting authority, the latter could have objected to the price change, if the price increase was not agreed in writing[11].

A comparative review

In the current one German Civil Code (Art. 649[12], former art. 650, Bürgerliches Gesetzbuch, 1900) a similar rule is provided (which in one part is similar to Art. 268 of the currently effective OCA), namely that if a draft estimate is the basis of the contract, without the contractor having ensured its accuracy, and it turns out that the work cannot be completed without significantly exceeding the bill, the contractor has the right only specified in Art. 645, para. 1 claim (of the remuneration corresponding to the work performed, as well as costs not included in the remuneration), if the client terminates the contract on this basis[13]. This rule is explained by the possibility for the principal to release himself from a contract which is not in his interest as disadvantageous because of an inaccurate account given by the builder, which release is on lighter terms if performance and payment are continued[14].

Also of interest is the incumbent's rule Italian Civil Code (Codice civil, 1942) in art. 1664[15], approaching the effective art. 266, para. 2 of the OCA, which states that if due to unforeseeable circumstances have occurred increases or decreases in the cost of materials or labor, so as to cause an increase or decrease greater than one-tenth of the agreed total price, the contractor or the client may request a price revision. A revision can only be agreed for that difference which exceeds a tenth.

In the current one Russian Civil Code (Civil Code of the Russian Federation, part two of January 26, 1996.) in Art. Art. 740 – 757 detailed rules regarding the design and construction contract are listed. In Art. 743, para. 1[16] it is provided that the contractor undertakes to carry out the construction and related works in accordance with the technical documentation, which determines the volume, content of the work and other requirements for them, and with an estimate determining the cost of the work. Unless otherwise specified in the construction contract, it is assumed that the contractor is obliged to carry out all the works specified in the technical documentation and in the estimated value, and according to Art. 746 the payment of the work performed by the contractor shall be made by the client in the amount provided for in the estimated value, in the term and according to the order determined by the law or the construction contract.

In the current one Ukrainian Civil Code (Civil Code of Ukraine, 2003) one can find a provision extremely similar to the one in force in the OCA. In Art. 844, para. 5[17] it is provided that in the event of a significant increase after the conclusion of the contract in the price of materials, equipment to be provided by the contractor, as well as the price of services provided to him by other persons, the contractor has the right to request a price increase. In the event of the client's refusal to increase the estimate, the contractor has the right to request termination of the contract.

Also of interest is the adopted in the Polish Civil Code (Kodeks cywilny, 1964) answer. Art. 629[18] states that if the parties have determined the remuneration based on a list of planned works and expected costs (estimated remuneration), and in the course of the execution of the work, by order of the competent state authority, the amount of prices or rates applicable until now in the calculations of the forecast is changed, each party can request an appropriate change of the agreed remuneration. However, this does not apply to charges paid for materials or labor prior to the change in prices or rates.

The Romanian Civil Code (Codul civil al României, 2009) provides by law in the construction contract that the remuneration is to be determined approximately (Art. 1865), according to the value of the work or services (Art. 1866) or as a total price (Art. 1867[19]). The latter states that when the contract is concluded for a total price, the contracting authority must pay the agreed price and cannot ask for a reduction on the grounds that the work or service requires less work or costs less than expected. Also, the contractor cannot request a price increase for reasons contrary to those stated. The total price remains unchanged, although changes are made to the originally stipulated terms of performance, unless the parties have agreed otherwise.

The permit adopted in the Greek Civil Code (Αστικός Κώδικας, 1984), comes close to the older French regulation. Art. 696[20] states that without prejudice to the provision of art. 388[21], if the contract is drawn up on the basis of a budget, the accuracy of which is expressly guaranteed by the contractor, he cannot request an increase in remuneration and if the budgeted works were still overstated.

Effect of the provision in conditions of a planned economy

As can be seen from the comparative legal review, which shows a similar regulation in Italy, Poland and Ukraine, the main difference between the current and the repealed OCA in this particular part is the possibility to change the price of the contract for production/construction, even if the same has been fully agreed upon, and not at unit prices of the works performed, in the event of a change in the duly determined cost of the material or labor.

In the literature of recent years, it has been assumed that the law refers to "duly determined' price, that set by a government agency[22] in the conditions of a planned economy[23]. A quick review of part of the legislation in force at the time reveals the conditions under which Art. 266, para. 2 of the OCA in 1950.

So e.g. in art. 57 of The Capital Building Regulations 1951 it is provided that for the changes that have occurred in the value of construction and individual types of construction works, due to changes in prices, standards, construction conditions (...) approved by the authority that approved the accounting documentation. The Capital Building Regulations 1973. to an even greater extent, it shows the intensity of state regulation of the construction price - e.g. according to Art. 59, when by decision of the Council of Ministers or the Price Committee, the prices of construction materials, mechanization, labor and other elements are changed (…), the amendments are reflected in the contracts concluded until then between the builder and the investor, including those at fixed contract value, unless otherwise provided. Art. 121 provides that The Bulgarian National Bank carries out control in the field of capital construction for the correct implementation of the decisions of the Council of Ministers and of the Price Committee on changes in the prices of construction materials and mechanization, for payment of labor, etc., and according to Art. 129, para. 3 the contentious issues of price enforcement in survey, design and construction are decided by The Committee on prices in accordance with the Ordinance on the pricing of research, design and construction works.

The very existence of Rules for the economic mechanism, Price regulation and The regulation on the pricing of research, design and construction production confirm the thesis that Art. 266, para. 2 of the OCA is intended for the conditions of a planned economy, not a market economy. Even the OCA itself contained provisions to this effect, which have been canceled at the present time. So e.g. Art. 216 (Repealed - SG No. 85 of 1963) has read that for goods with a certain price, the parties cannot agree on a different selling price, unless otherwise decided for individual cases. If a higher price is agreed upon, the contract is considered concluded for the specified price.

In this sense, in the literature of those times it is assumed that the social and economic basis of the rule of Art. 266, para. 2 of the OCA is the non-admission of enrichment of one person at the expense of others due to changed circumstances and realization of unearned income[24], i.e. income from indirect trade in construction materials, for example. Suffice it to mention and Decision No. 95 of 1.X.1962 under City Decree No. 71/62, OSGK, which states that socialist organizations cannot negotiate lower than legally determined prices in production contracts as well.

The presented arguments would categorically defend the thesis that the provision of Art. 266, para. 2 of the OCA was created to be applied in the conditions of a planned economy, if one does not take into account the institute of economic intolerance, which was absent in the current Bulgarian legislation at the time of the adoption of the OCA in 1950, as well as if its historical history is briefly examined development.

A private case of economic intolerance

In the literature, it is accepted that Art. 266, para. 2 of the OCA is a special case of economic intolerance under Art. 307 of the Commerce Act[25], which is in turn a departure from two of the main principles of contract law - that of contractual freedom (Art. 9 OCA) and on the principle of binding the parties to the contract – pacta sunt servanda (Art. 20, para. 1 OCA)[26]. The need for the application of non-performance has been emphatically established by science and jurisprudence since the First World War[27], especially in the losing countries where unfavorable inflationary processes are observed[28], which leads to the development of the doctrine of the termination of the legal basis of the contract (occurrence of unforeseen conditions under which the parties would not conclude the contract, Störung der Geschäftsgrundlage) in Germany, codified only in 2002 in Art. 313 of the German Civil Code[29]. In Italy, the institute (eccessiva onerosità) was introduced in Art. Art. 1467-1469 in the current Italian Civil Code. In France théorie de l'imprévision was introduced into civil law only with the 2016 reform with the new art. 1195 in the French Civil Code, abandoning the firm position of the French Court of Cassation on the case Canal de Craponne from March 6, 1876[30], that contracts should be performed, although the theory of unpredictability has been introduced into administrative law since 1916 with the decision of the State Council Compagnie générale d'éclairage de Bordeaux. In Great Britain the doctrine of futility (frustration) was established in 1863 with the case Taylor v Caldwell (1863) 3 B & S 826, which is similar to economic intolerance. The doctrine was developed with the case Davis Contractors v Fareham UDC (1956) AC 696. It is a departure from the earlier case-established doctrine of absoluteness of contractual obligations Paradine v Jane (1647) EWHC KB J5[31]. Although considered in a case of war, the impossibility of non-performance of a contract due to changed conditions (Doctrine of Impossibility) has also been recognized by the US Supreme Court in a case The Kronprinzessin Cecilie, No. 922, 244 US 12 (1917), and later the doctrine of impracticability (Doctrine of Impracticability) was developed with the case Transatlantic Financing v. U.S., 363 F.2d 312, 315 (D.C. Cir. 1966).

This only shows that the rule of art. 266, para. 2 of the OCA is not completely isolated from the developing legal science and the acceptance of economic intolerance on a wide and global scale, and its absence before 1950 is somewhat explainable not so much by the market economy of the Tsardom of Bulgaria, but by the fact that until then the principle that the will of the parties to the contract prevailed prevailed[32].

The practice of the courts

In their modern practice, the courts accept that the production contract is an informal, consensual, bilateral and remunerative contract, its existence, in the absence of a prepared written form, is subject to proof with all the evidentiary means permitted by the Civil Procedure Code (CPC), as in view of the principle of equivalence of consideration, due for payment in the specified hypothesis are the actually performed works at actual prices, according to arg. from Art. 266, para. 2 OCA (Decision No. 110 of 17.08.2011 of the Supreme Court of Appeal under Item No. 597/2010, Item II, TC, Decision No. 3 of 15.03.2016 of the Supreme Court of Appeal under Item No. 2526/ 2015, III year o., GK, Decision No. 295 of 06/05/2013 of PAS under v. t. d. No. 386/2013.). It is also assumed that the construction contract has an aleatoric character, since it is possible that due to regulatory changes, prescriptions of competent authorities or technological breakthroughs and changes, the performances may change (Decision No. 279 of 12.02.2019 of the Supreme Court of Appeal under Item No. 2905/2017, Item II, TC, Decision No. 261044 of 1.07.2021 of the Supreme Court of Appeals under Item No. 461/ 2019).

In their reasons, the courts confirm that in the construction contract, the legislator has also explicitly provided for the principle of equivalence of performance, which is why owes payment for the works actually performed under the contract and at actual market prices at the time of their performance. Therefore, none of the parties to this contract can enrich themselves at the expense of the other, realize one income at the expense of the other. This principle applies in both cases. The contrary would lead to enrichment of the defendant at the expense of the plaintiff, which the norm of Art. 266, para. 2 OCA does not allow (Decision No. 558 of 13.05.2011 of RS - Stara Zagora under City Decree No. 1714/2010, Decision No. 156 of 04.06.2017 under City Decree No. 64/2017 of OS - Smolyan, Decision No. 1278 of 10.07.1997 of the Supreme Court of Appeals under City Decree No. 1648/96, V of the Supreme Court, Decision No. 404 of March 13, 2000 of the Supreme Court of Appeals under City Decree No. 1493 /99 year, V year o., Decision No. 763 of 15.10.2013 of the Supreme Court of Appeal No. 1106/2012, I item o., TC).

Such considerations should not be absolutized and the principle of equivalence of performance should not be taken to its limit, because they often seem to be taken out of the context of economic realities. The law allows the contractor to receive a profit, not just to be reimbursed for material and labor costs incurred. According to Art. 268 of the OCA if the customer withdraws from the contract for valid reasons, he should pay the contractor the costs incurred, the work performed and the profit he would receive from performing the work. And it is assumed that the valid reasons within the meaning of Art. 268 of the OCA are circumstances outside the legal relationship between the ordering party and the contractor, and in this case it concerns the termination of the contract without the contractor's fault[33]. And since the law allows the realization of a profit, even in the case of an unfulfilled contract through no fault of the contractor, then it is beyond all logic not to recognize the right to profit upon proper and conscientious performance.

Performances cannot and should not be equal, but the parties should achieve equivalent satisfaction of their interests[34], insofar as each contract is based on subjective equivalence[35]. When buying a future property (under construction) it is incorrect to take into account the values of the actually performed construction works and, based on them, to assess the equivalence of the services, when at the time of the conclusion of the contract, the same are to some extent quantitatively unknown. This contradicts the market logic that a property is worth what it can realistically sell for, i.e. for which a buyer is found willing to pay that price, according to the principle id certum est quod certum reddi potest[36]. And when an already sold future property becomes more expensive, it may not meet the market demand after the price increase, and this may result in a delay in its implementation.

Change of remuneration in case of delay of the builder

The practice in the application of Art. 266, para. 2 of the OCA is uniform that when the builder-contractor is in delay, i.e. the completion of the object took place after the pre-agreed deadlines, then he cannot seek compensation for the increase in construction materials and/or labor, as he cannot derive rights from his own default[37]. The rule of Art. 266, para. 2 of the OCA for changing the price due to an increase in the cost of materials and labor is inapplicable even when an estimated price is agreed upon, which will be determined after the completion of the building, if the builder has missed the deadline for its completion. According to the provision of Art. 96 of the OCA, when the creditor is in default, the risk passes to him and he should bear the adverse consequences of his own non-performance - including the risk of the increase in the price of labor and materials, as well as inflationary processes that have occurred after the construction period agreed in the contract and transfer of the home (Decision No. 671 of 20.10.2008 of the Supreme Court of Appeals pursuant to No. 290/2008, II o., TC). In the same sense, if the delay in meeting the deadlines is the fault of the ordering party (buyer-contractor), then the risk of the increased price is for him[38]. If it is agreed that the price will be determined after the completion of the construction, if the deadline for this is not met the price is determined at the time of expiry of this term, and not at the time of handing over the home to the buyer[39]. It is mandatory to determine the increased price by appointing a forensic technical expert[40].

Change of remuneration in case of change of the project

Next, it is also relatively uniform practice that of payment on the basis of Art. 266, para. 2 of the OCA are subject to those construction and installation works that are in accordance with the approved project, which can be duly amended during the work, and are accordingly accepted[41]. The builder cannot claim on the basis of Art. 266, para. 2 of the OCA for quantities of materials and labor, beyond what is provided for in the project, in the absence of bilaterally signed protocols with the contracting authority for acceptance[42], but if there is a corresponding amendment in the project and their acceptance, the payment is due[43].

Outside the scope of Art. 266, para. 2 of the OCA is also the performance of construction and installation works in quantities exceeding those under the contract, through other material or types of construction and installation works not provided for in the contract[44]. This permission of the judicial practice is not particularly surprising, insofar as it is based on the acceptance of the work performed, in accordance with Art. 266, para. 1, ex. first from the OCA.

But in the reviewed practice, the cases are mixed and consider not only an increase in the prices of the planned works, but also include unforeseen and unapproved ones. This shows the somewhat explainable hesitation in the application of Art. 266, para. 2 of the OCA and the other provisions concerning the contract for production, due to the ambiguity of the norm. So e.g. in Decision No. 589 of 20.10.2014 of the PAS under Administrative Procedure No. 731/2014. it is assumed that the provision of art. 266, para. 2 complements the hypothesis referred to in para. 1, without changing the main thing in it - when the amount of remuneration is established, namely - upon acceptance of the work. Decision No. 7502 of 3.11.2015 of the SGS according to the city decree No. 5507/2014. is a separate example of mixing, as in para. 1 and para. 2 of Art. 266, as well as the practice of the Supreme Court on their application.

Change of remuneration agreed in full

Of greatest interest, however, is the question whether if a single firm price is agreed upon of construction, art. can be applied. 266, para. 2 of the OCA, as it states that the remuneration is changed accordingly, although it was fully agreed upon.

It can be said that the practice of limiting the scope of Art. 266, para. 2 of the OCA, emphasizing that if the remuneration is agreed "in full", then the same is "final", and if another mechanism of its determination is foreseen, this excludes the referred provision of the OCA. So e.g. in Decision No. 279 of 12.02.2019 of the Supreme Court of Appeal under Item No. 2905/2017, Item II, TC, and in Decision No. 1318 of 1.07.2017 of the SAC pursuant to No. 595/2017 it is assumed that Art. 266, para. 2 OCA is inapplicable when the price agreed between the co-contractors, payable to the contractor, is finally determined, and unforeseen works are agreed to be negotiated additionally. In this case, as stated, Art. 266, para. 1, ex. first from the OCA.

Also, in Decision No. 1718 of 1.07.2018 of the SAC pursuant to No. 2426/2018. it is held that the provision of Art. 266, para. 2 OCA is dispositive and applies when the parties have not agreed otherwise - in the case referred to, a mechanism has been agreed for determining the remuneration due under the contract, incl. taking into account a possible increase in the price of labor and costs in connection with the execution of the contract, tied to the annual inflation index according to NSI data, and in this case the price change is on a contractual basis, not on a legal basis. In a similar sense are Decision No. 261737 of 18.12.2020 of RS - Varna under city decree No. 752/2019. and Decision of 27.12.2002 of the PAS in the city of D. No. 444/2002, GO, in which it is also assumed that the rule of Art. 266, para. 2 of the OCA may correspond to what was agreed by the parties in the contract, i.e. the rule is dispositive.

It is of interest Decision No. 1205 of 12.06.2014 of the SAC pursuant to Civil Law No. 1599/2013., which states that parties may choose setting remuneration by negotiating a specific fixed price, as opposed to being able to quote unit prices for construction and installation works, proving the relevant quantities of material and labor. It is also assumed that if unit fixed prices for a given material are agreed, then the change in its market price cannot affect the agreed and does not affect the total price due[45]. In Decision No. 398 of 2.11.2011 of the Supreme Court of Appeal under City Decree No. 1535/2010, IV year o., GK, and Decision No. 1314 of 22.12.2012 of the Supreme Court of Appeals under City Decree No. 657/2012, III year o., GK it is said that with the provision of art. 266, para. 2 of the OCA, the parties to the preliminary contract for the purchase and sale of a future property are given the opportunity negotiate the selling price differently. They can expressly agree to pay it in full before the start of construction without taking into account any price changes, and they could also arrange payment initially only to estimated price and, accordingly, the method of its amendment at the time of the transfer of the ownership right. However, in cases where the preliminary contract for the purchase and sale of the constructed property is declared final by a decision that has entered into force, the question of the amount of the sale price and whether the same is subject to change in accordance with the agreed upon in accordance with the procedure of Art. 266, para. 2 OCA, cannot be re-decided.

In the opposite sense of the above, namely that even if a firm price is agreed upon, it may change if the cost of the material changes, is Decision No. 162 of 06/08/2012 of the Supreme Court of Appeals of the Republic of Kazakhstan under Case No. 20/2012. It examines a case where unit prices for materials were agreed upon between the parties, but the contractor was able to obtain goods of the same quality and type at a lower price because the delivery was made directly from the manufacturer. The court accepted that there was no need to reduce the price according to the specification with an express annex between the parties, since in acceptance of the work shall be due to the costs actually incurred by the contractor. On the basis Art. 266, para. 1 cf. with para. 2 OCA, the remuneration under the contract is changed if, during the performance of the contract, the price of the components - materials or labor - changes. Therefore, since the delivery price at which the claimant acquired the technological line, which was invested in the site, was lower than the pre-agreed price, the price actually paid is due, not the agreed price. In the decision, there is clearly again a mixing of para. 1 with para. 2 of Art. 266 of the OCA. With Decision No. 877 of 19.11.2013 of the Supreme Court of Appeal No. 926/2012, Item I, TC cassational appeal of the said decision is not allowed.

Reduction of remuneration

Here the question also arises about reducing the cost of construction, if a drop in material and labor prices occurs. IN Decision No. 1428 of 31.07.2012 of the State Administrative Court pursuant to Administrative Law No. 2973/2011. a case has been considered where the parties intended estimated cost values, forming the amount of the remuneration. In a specific pen, labor costs were provided that were not carried out, therefore, referring to Art. 266, para. 2 of the OCA, the court is reduced the amount of the overall remuneration, subtracting from it the amount for unpaid labor costs. Here again there is a mixing of para. 1 and para. 2 of Art. 266 of the OCA, insofar as the basis for the reduction of the value is actually the estimated agreement on unit prices and the acceptance and payment of the work after its completion.

In practice, it is accepted that even if there has been a reduction in the market prices of the materials, if the final amount of the works is bilaterally accepted and if the same has been paid, a reduction cannot subsequently be requested on the basis of Art. 266, para. 2 of the OCA[46]. In view of the above, it can be said that a reduction in the price of Art. 266, para. 2 of the OCA may arise in all scenarios in which it is possible to increase it.

The question of which prices are properly set

The very text of Art. 266, para. 2 OCA, stating that 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, raises the question of what is the "properly determined price". As stated, in view of the historical origin of the provision in Bulgaria, these were certainly prices regulated by a state body[47].

Nowadays, however, the intervention of state regulators in the economy is very limited and prices are determined on a market basis, with few exceptions. It would not follow, unless expressly agreed by the parties, that changes in prices on a market principle could determine changes in the remuneration of the builders, because, as stated, the rule of Art. 266, para. 2 of the OCA is dispositive.

The question of whether changes in the prices of water supply and sewerage services would be controversial[48], natural gas[49], the thermal energy[50] and electrical energy[51] would justify an increase or decrease in the price of the construction service based on Art. 266, para. 2 of the OCA, if such a condition was not foreseen by the parties and if it can be assumed that these prices are "properly determined", since even if they are subject to regulation, they are basically formed on a market principle. Reasoning in this direction has been developed in Decision No. 151 of 3.11.2015 of the Supreme Court of Appeal No. 1572/2014, Item I, TC and in Decision No. 261661 of 11.03.2021 of the SGS under city ordinance No. 8432/2020., but without being decisive for the cases. Interesting are the reasonings of the court in Decision No. 260499 of 16.02.2021 of RS - Varna under City Decree No. 21069/2019., which state that the provision enables the contractor under the works contract in the event of a change in circumstances affecting the cost of materials (in this case the resources – hardware, software, electricity), which are necessary for the production of the product (in the case of "mining" bitcoins), the price of the product/service should be changed accordingly, but reference to Art. 266, para. 2 OCA was missing.

However, in so far as the provision refers to the price of material or on the workforce, as unforeseen changes in their prices set properly, may be changes in tax and insurance rates on materials and labor that significantly affect construction prices, as they would be imposed through legislation, i.e. "properly". But even in this hypothesis, such changes would not lead to an automatic increase or decrease in the price of the construction product, and again it would be necessary to carefully assess how the remuneration was agreed and formed, and the price changes would be subject to proof.

Ivan Nikolaev, attorney-at-law

[1] Dimitrov, M. The construction contract. Sofia. Sibi, 2012, p. 101.

[2] Nikolaev, I. Act model 19 in construction as a condition for payment. Ownership and law, Trud i Pravo Publishing House, no. 3/2021, p. 66.

[3] Milkov, P., Contract system in construction. Sofia: Trud i Pravo Publishing House, 2014, p. 293.

[4] For more on the matter, see in Spasova, A. Handbook of construction law, Sofia, Sibi, 2021, p. 264.

[5] Lorsque'un architecte ou un entrepreneur s'est charge de la construction à forfait d'un bâtiment, d'après un arrêté et convenu avec le propriétaire du sol, il ne peut demander aucune price increase, nor sous le prétexte de l 'augmentation de la main-d'œuvre ou des materials, ni sous celui de changements ou d'augmentations faits sur ce plan, si ces changements ou augmentations n'ont pas été autorisés par écrit, et le prix convenu avec le propriétaire.

[6] An architect or an entrepreneur who is commissioned by contract to build a building, in accordance with a design established and agreed with the client, cannot demand an increase in the price, nor with the pretext that the price of the work is increased materiali, nè col pretesto che siensi fatte al disegno variazioni od aggiunte, se queste non sono state approvato in iscritto e non se ne è convenuto il prezzo col commitente.

[7] Tonchev, D. Commentary on OCA. T. I. Sofia, 1929, p. 5.

[8] Mevorah, N., Lidzhi, D., Farhi, L. Commentary on OCA, part II, Sofia, 1926, pp. 349-351.

[9] Meshkov, G., T. Handbook on OCA. T. II. Sofia, 1935, p. 561.

[10] Decision 604/1935, AP., XVI., Decision 377/1929, SV, XI,

[11] Decision of the French Court of Cassation from 10.07.1931. The authors of the period often referred to French and Italian judicial practice due to the extremely close similarity of the then-current PPE to the codes from which it was derived.

[12] Ist dem Vertrag ein Kostenanschlag zudrunge gelegt worden, ohne dass der Unternehmer die Gewähr für die Richtigkeit des Anschlags oderboden hat und ergibt sich dass das Werk nicht ohne eine wesentische Überschreitung des Anschlags ausführbar ist, so steht dem Unternehmer wenn der Besteller den Vertrag aus diesem Grund kündigt, nur der im § 645 Abs. 1 bestimmte Anspruch zu.

[13] Translation of Alexander Kozhuharov, German Civil Code, Sofia, 1974, p. 181.

[14] Tize, H. Law of Obligations. General and special part. Translated by Alexander Kozhuharov. Sofia, 1933, p. 230.

[15] If, due to the effect of unforeseen circumstances, increases or decreases in the cost of materials or labor have been verified, such as to determine an increase or decrease superior to a tenth of the agreed upon price, the contractor or the client can request a review of prezzo medesimo. La revisione può essere accordata solo per quella differenza che eccede il decimo.

[16] The contractor is obliged to carry out construction and related works in accordance with the technical documentation, which determines the scope, content of the works and other requirements imposed on them, and with the estimate, which determines the price of the works. In the absence of other instructions in the construction contract, it is assumed that the contractor is obliged to perform all the work specified in the technical documentation and in the estimate.

[17] In the case of a significant increase after the conclusion of the contract in the cost of the material, the equipment to be provided to the contractor, as well as the cost of services provided to him by other persons, the contractor has the right to request an increase in the cost. If the customer refuses to increase the estimate, the contractor has the right to demand termination of the contract.

[18] If strony określiły wynagrodzenie on the basis of zestawienia plannedowanych prak i predjazanych kosto (wynagrodzenie kostorysowe), aw toku ženzeťie dziecie zarządzenie malkisnego organu państwowego vyzyyyony cen lub stavek binding dotychczych w obliczeniach kostorysowych, each side can request a suitable zmiany umówionego wynagrodzenie. Nie dotyczy to jednak należności uiszczonej za materiały lub robociznę przed zmianą cen lub stawek.

[19] When the contract is concluded for a global price, the beneficiarul trebuie să plătească prezul convenit şi nu poate cere o diminuare a acestuia, motivând că gâinrea sau serbunc a necesitat mai mõlcă work ori a costat mai mõlc than it was foreseen. Tot austet, antrepreneurul nu poate pretinde o răgăți a prețului pentru motive opuse celor ģiţiţe la alin. Preţul forfetar remains neschimbat, cu toate că s-au adus modifications cu gămăți la condiții de execuțare inițial previții, siță partile nu au convenit alțel.

[20] With the exception of the provision of article 388, if the contract was drawn up based on a budget whose accuracy was expressly guaranteed by the contractor, he cannot ask for an increase in remuneration, and even if the estimated work was overpriced.

[21] The reference is to the general provision on economic intolerance in the code.

[22] Dimitrov, M. The construction contract. Sofia. Sibi, 2012, p. 206. The author examines in detail the provision of Art. 266, para. 2 of the OCA, advocating the thesis that it corresponds to the political and economic situation and the conditions of a planned economy and comprehensive price regulation, since it was adopted in 1950.

[23] Penkova, V. Handbook of construction law. Sofia, Sibi, 2021, p. 203.

[24] Kozhuharov, A. Obligation law. Separate types of bond relations. Sofia, UI "St. Kliment Ohridski", 2002, p. 249.

[25] Kalaidzhiev, A. Obligation law. Common part. Fifth edition. Sofia, Sibi, 2010, p. 324. Gerdzhikov, O. Commercial transactions. Sofia, IC "Labor and Law", 2015, p. 59.

[26] Ruschev, I. Field of application and legal consequences of economic intolerance. news.lex.bg, 2021.

[27] Stefanov. D. Commercial Bond Law. Veliko Tarnovo, Abagar, 2014, p. 51.

[28] Nikolov, Ya. Economic intolerance and the irresistible force. Sofia, 2013, with 13.

[29] There again.

[30] The case dealt with a request by the owner of an irrigation canal to revise the fixed price under contracts for the maintenance and water supply of a neighboring plain concluded in 1560 and 1567, since by 1876 the amount was already insignificant due to inflation. The court rejected the request for price indexation because the contract had the force of law between the parties and was duly concluded.

[31] The court has held that the tenant is bound to pay rent notwithstanding the fact that the house may have been burnt by lightning, demolished by enemies, and notwithstanding that he may have been driven from the land, or the land may have been flooded. This shows to what extent the Pacta sunt servanda rule was followed.

[32] Tonchev, D. Commentary on OCA. T. I. Sofia, 1929, p. 226 et seq.

[33] Decision No. 84 of 19.07.2011 of the Supreme Court of Appeal No. 494/2010, Item II, TC.

[34] Milkov, P., Contract system in construction. Sofia: Trud i Pravo Publishing House, 2014, p. 284.

[35] Kalaidzhiev, A. Obligation law. Common part. Fifth edition. Sofia, Sibi, 2010, p. 67.

[36] Decision No. 2175 of 14.04.2020 of the SGS pursuant to City Decree No. 2876/2020; Decision No. 782 of 28.07.2016 of the Administrative Court - Burgas according to City Decree No. 1192/2016; Decision No. 9 of 02/02/2015 of the Administrative Court - Veliko Tarnovo according to City Decree No. 25/2015; Decision No. 484 of 22.12.2017 of the OS - Haskovo according to the municipal decree No. 815/2017; Decision No. 598 of 5.12.2014 of the Administrative Court - Veliko Tarnovo pursuant to City Decree No. 1131/2014, etc.

[37] Decision No. 671 of 20.10.2008 of the Supreme Court of Appeal under Item No. 290/2008, Item II, TC, Decision No. 288 of July 2, 2012 of the Supreme Court of Appeal under Item No. 783/ 2011, IV year o., GK.

[38] Decision No. 1015 of 17.12.2009 of the Supreme Court of Appeal under City Order No. 3048/2008, I year o., GK, Decision No. 226 of 16.03.2010 of the SAC under City Order No. 2328/ 2009, GK.

[39] Decision No. 1035 of 27.06.2003 of the Supreme Court of Appeal under City Decree No. 1808/2002, V year o.

[40] Decision No. 169 of 22.04.2003 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 2520/2002, V year o., Decision No. 348 of 12.05.2010 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 1017/2009 ., Item I, TC, Decision No. 1314 of 22.12.2012 of the Supreme Court of Appeals under City Decree No. 657/2012, III Year, GK.

[41] Decision No. 169 of 23.06.2014 of the State Administrative Court of Ukraine under No. 115/2014, Decision No. 212 of 14.07.2011 of the State Administrative Court of Ukraine under No. 146/2011.

[42] Decision No. 163 of 17.07.2009 under Municipal Decree No. 1097/2008 of PAS.

[43] Decision No. 212 of 14.07.2011 of the Supreme Administrative Court under No. 146/2011.

[44] Decision No. 370 of 02.1.2019 of the SAC pursuant to No. 5685/2018.

[45] Decision No. 1084 of 30.05.2013 of the SAC pursuant to Administrative Law No. 3575/2012.

[46] Decision No. 16 of 01/09/2013 of the PAS pursuant to No. 1357/2012

[47] Dimitrov, M. The construction contract. Sofia, Sibi, 2012, p. 209.

[48] Ordinance on price regulation of water supply and sewerage services, Adopted by PMS No. 8 of 18.01.2016.

[49] Ordinance No. 2 of 19.03.2013 on regulation of natural gas prices.

[50] Ordinance No. 5 of 23.01.2014 on the regulation of heat energy prices.

[51] Ordinance No. 1 of 14.03.2017 on the regulation of electricity prices.

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