The preliminary contracts for the purchase and sale of objects under construction (greenfield purchase, pre-sale, sale of future property) are often accompanied by clauses and stipulations typical of contracts for production (construction) under Art. 258-269 of the Obligations and Contracts Act (OCA), or are mixed contracts in which the buyers are called "buyers" and "contractors". These preliminary contracts for the purchase and sale of ownership of real estate and the execution of construction in one part they are contracts for production[1] and are in their integrity mixed type contracts, long accepted as such in practice[2], and in theory, where it is not disputed that the contract for construction under the Spatial Development Act (SDA) is a variant of the construction contract under the OCA[3]. Despite its wide application, however, in theory and practice, the issue remains little affected and almost absent[4] whether and to what extent in the case of these contracts, in the part regarding the assignment construction as a service, find application[5] the provisions of The Consumer Protection Act (CPA) (Promulgation, SG No. 99 of 9.12.2005, in force from 10.06.2006, amended and supplemented, No. 23 of 19.03.2021, in force from 1.01.2022) , governing to a large extent rules, newer and special to OCA and Commerce Act (CA)[6] on pre-contractual relations, conclusion of contracts, content of contracts, the right of cancellation, but also procedural aspects in case of jurisdiction of disputes, order of consideration, exclusion of arbitration clauses, etc.
In recent years, the question of the applicability of the CPA to construction contracts has become the subject of wider discussion in the formation of interpretation. e. No. 3/2019, OSGTC of the Supreme Court on the matter "Is it a civil or commercial case with the subject of legal relations arising from a contract for the execution of construction works concluded between an individual and a merchant in connection with his occupation, and what is the threshold for access to a cassation appeal of the appellate decision in the case?". The distinction between civil and commercial cases with the subject of construction works, however, does not determine the application of the CPA, because not all civil cases are covered by its subject. However, opinions on the matter are presented by the Supreme Bar Council[7], which states that in the case when the other party is a consumer, the protection mechanism of the consumer protection policy is triggered, as well as from ch. assistant professor Borislav Ganchev, Ph.D., SU[8], which assumes that a transaction between a natural person and a builder will be consumer, if and to the extent that the natural person acts as such. However, the focus of the discussion is whether these cases are civil or commercial, in view of the resulting interpretative case, and not whether the CPA is applicable.
Brokerage, credit and design contracts
In the case of the "green" purchase of real estate with a preliminary contract, a number of accompanying contracts are observed in practice - e.g. mediation contracts with a buyer (contract for brokerage services), bank credit contracts (when the price is not paid with own funds), design contracts (when the object "on the green" is not yet individualized), etc.
In this regard, it is important to emphasize that practice has long accepted that mediation contracts fall within the scope of the CPA – so e.g. in Decision No. 115 of 3.12.2020 of the Supreme Court of Appeal No. 559/2020, Item II, TC the clauses under the mediation contract with "Adres Real Estate" JSC are declared null and void[9] regarding penalty in case of late payment of remuneration and arbitration clause as unequal according to PPE. It is similar Decision No. 60050 of 06/07/2021 of the Supreme Court of Appeal No. 860/2020, Item II, TC, whereby the clauses in the General Terms and Conditions of "Imoteka" AD are declared to be unequal and correspondingly null and void. In many declaratory and declaratory judgment decisions, courts have long also adopted the application of the CPA when considering agency contracts with real estate brokers – e.g. Decision No. 507 of 27.04.2017 of the OS - Plovdiv under city ordinance No. 5/2017, Decision No. 260087 of 11.11.2020 of the OS - Pazardzhik according to city ordinance No. 386/2020. and others.
Credit agreements also undoubtedly fall within the scope of CPA, including when they are granted for the purpose of purchasing real estate, as there is a relatively rich practice regarding unequal clauses in the same - e.g. Decision No. 9 of 27.02.2020 of the Supreme Court of Appeal under item No. 62/2019, Item I, TC, Decision No. 384 of 29.03.2019 of the Supreme Court of Appeal under item No. 2520/ 2016, Item I, TC, Decision No. 205 of 7.11.2016 of the Supreme Court of Appeals pursuant to Item No. 154/2016, Item I, TC, Decision No. 87 of 6.11.2019 of the Supreme Court according to Item No. 848/2017, Item I, TC and many others.
Also of interest is the question of the design of buildings and the scope of consumer protection. So e.g. in CJEU judgment of 14 May 2020 in case C-208/19, ECLI:EU:C:2020:382, it is assumed that the contract concluded between an architect and a user, according to which the former obligates the latter only to design a single-family house, which is to be built, and in connection therewith draw up designs, falls within the scope of Directive 2011/83/EU of 25 October 2011 on consumer rights, which corresponds to the provisions in the PPE regarding the requirements for providing information about contracts, the right to refuse, etc.
In this line of thinking, if it is accepted that brokerage, bank credit and design contracts are all contracts incidental to the construction of buildings and consumer protection is applicable to them, it is reasonable to ask whether this is the case with the central contract, namely the preliminary contracts for the purchase and sale of objects under construction, respectively for the contracts for the construction / construction of real estate and buildings.
Employers and users
It is important to make the distinction that a contractor under a construction contract pursuant to Art. 258-269 of the OCA and the contracting authority pursuant to Art. 161, para. 1 of the SDA are not equivalent concepts[10]. In order for a person to have the quality of contracting authority according to the SDA, he must be "the owner of the property, the person to whom the right to build on someone else's property has been established, and the person who has the right to build on someone else's property by virtue of law", while the contracting authority under the contract for production under the OCA is the ordering party, who, if he does not meet the conditions for a contractor under the SDA, will not have the rights and obligations under the SDA, but only the obligations arising from the OCA. The first contracts are real construction contracts (according to the SDA), and the second ones, for construction, are accepted as non-real construction contracts[11]. However, this does not mean that the quality of "consumer" is excluded in relation to the contracting parties under the General Terms and Conditions, for whom there are no restrictions to be natural persons and not to act within the scope of their commercial or professional activity.
The Consumer Protection Act in § 13, item 1 of the SP defines "users" as "any natural person who acquires goods or uses services that are not intended for carrying out a commercial or professional activity, and any natural person who, as a party to a contract under this law, acts outside the scope of his commercial or professional activity". The Bulgarian legal definition is made up of the various definitions of consumer given in the European acts which the CPA transposes[12]. In order for a person to be a user within the meaning of the EPA, the following conditions must be met[13]: 1. this person is a natural person; 2. it acquires goods or uses services that are not intended for commercial activity; or 3. it acts outside the scope of its commercial or professional activity.
So e.g. The Court of the European Union in its practice rules that according to Art. 2, b. b) from Directive 93/13/EEC on unfair terms in consumer contracts "consumer" means any natural person who, in his capacity as a party to the contracts subject to the said Directive, participates due to interests that are outside the scope of his commercial or professional activity /Judgment of 21 March 2019, Pouvin and Dijoux, C-590/17, EU:C:2019:232, paragraph 22, Judgment of 17 May 2018, Karel de Grote — Hogeschool Katholieke Hogeschool Antwerpen, C-147 /16, EU:C:2018:320, point 53/. It also does not matter whether the user possesses certain knowledge or qualities to qualify as such, nor does it matter what information he has, since the quality of user is objective[14] /Judgment of 3 October 2019, Petruchová, C-208/18, EU:C:2019:825, paragraph 56, Judgment of 3 September 2015, Costea, C-110/14, EU:C:2015: 538, item 21/. Moreover, the CJEU with Judgment of 2 April 2020 in Case C-329/19, Condominio di Milano, via Meda v Eurothermo SpA, accepts that Art. 1, par. 1 and Art. 2, b. b) from Directive 93/13/EEC on unfair terms in consumer contracts must be interpreted to mean that those established therein consumer protection rules also apply to a contract concluded by a legal entity, such as the condominium (condominio) in Italian law, with a seller or supplier, even when such a legal entity does not fall within the scope of the said Directive. In this line of thinking, the CJEU accepted that the concept of "consumer" according to Directive 93/13/EEC on unfair terms has wide range, in order to ensure the protection afforded by this Directive to all natural persons who are in the position of a weaker party /Judgment of 21 March 2019 in Case C-590/17, Henri Pouvin and Marie Dijoux v Électricité de France (EDF)/. Therefore, whenever the court is referred to questions regarding the application of the Directive, it must examine all the circumstances in order to assess whether the quality of user/Judgment of 3 September 2015, Costea, C-110/14, EU:C:2015:538, paragraphs 22 and 23/.
In a similar sense, Art. 2, par. 1 of Directive 2011/83/EU on consumer rights defines the term "consumer" as meaning any natural person who, as a party to contracts falling within the scope of this Directive, acts outside the scope of his trade or business, trade or profession. In this regard, the CJEU has ruled that this concept means any natural person who is not engaged in the implementation of an economic or commercial activity by occupation /Judgment of 4 October 2018, Kamenova, C-105/17, EU:C:2018:808, paragraph 33/.
From the foregoing, it can be concluded that the regulations do not restrict buyers and contractors under preliminary sales and construction contracts to be consumers, in the sense of the regulations providing enhanced protection. It is decisive whether the persons are physical and whether they act to satisfy personal needs or act in a professional and commercial capacity.
Builders and contractors such as salesmen, suppliers and traders
Unlike the concept of "consumers", the European acts governing the different economic spheres handle different concepts when defining the stronger parties to the contracts - Directive 93/13/EEC on unfair terms in consumer contracts talk about "seller or supplier"[15] (art. 2, b. c)), Directive 2011/83/EU on consumer rights talk about "merchant"[16] (art. 2, item 2), Directive 2005/29/EC on Unfair Commercial Practices talk about "merchant"[17] (art. 2, b. b)). Similar are the concepts introduced in § 13, items 2, 3, 4 of the DR of PPE.
It should be noted here to dispel doubts about the applicability of Directive 93/13/EEC on unfair terms in consumer contracts, that the term "seller or supplier" referred to in it is not precise and has no functional meaning, in view of the subject of the contract, but the applicability of the directive is to "all contracts" (and as stated above, these may be credit agreements, mediation agreements, etc.), and not just sales and delivery contracts – in this see Recital 10 of the Directive and Judgment of 21 March 2019, Pouvin and Dijoux, C-590/17, paragraph 19, EU:C:2019:232. Commercial quality is leading, not the type of activity performed. The latter is relevant only for the application of different consumer protection rules in individual economic spheres.
In this sense, there are again no restrictions on seller-builders being traders, sellers and suppliers within the meaning of the mentioned Directives and CPA.
Subject scope of CPA and contracts concerning real estate
As the CPA transposes several Directives[18] it is important to distinguish the applicability of separate provisions to real estate construction services. Separately, the CPA provides for specific definitions that should be noted as used throughout the law.
Pursuant to § 13, item 13 of the SP of CPA "commodity" is movable material thing, with the exception of items sold under forced execution or through other measures by bodies authorized by law, as well as items abandoned or confiscated for the benefit of the state, announced for sale by state authorities. Goods are also water, gas and electricity when they are offered for sale, packaged in a limited volume or in a certain quantity. This legal definition is a compilation of the product definitions under Directive 2011/83/EU on consumer rights (art. 2, par. 3), which refers to Directive 2019/771/EU for certain aspects of contracts for the sale of goods (Article 5, Par. 5), Directive 1999/44/EC regarding certain aspects of contracts for the sale of goods (Article 1, Par. 2, b. b)). As the goods are essentially defined as chattels, it wherever the law lays down rules for them, they will be inapplicable to works and construction contracts, concerning real estate. In the same sense, the CPA is inapplicable when it talks about a "contract of sale", according to § 13, item 34 of the SP of the CPA, which, according to its definition, concerns goods that are movable property.
Of interest is the definition of "service", according to § 13, item 14 of the SP of CPA, which defines it as any material or intellectual activity that is carried out in an independent way, is intended for another person and does not have as its main subject the transfer of possession of an object. It should be emphasized that such a definition is not contained in any transposed act of primary and secondary European legislation and law[19]. This makes it particularly difficult to apply the specified definition, as the last expression of it is particularly unclear - "the main object is not the transfer of possession of an object".
The legal definition requires a single service for the applicability of the CPA not have a main subject transfer of possession, which is far from implying that the transfer of possession should be entirely excluded from the subject of the service, since the definition itself says that it can also be "material activity". So e.g. we definitely have a "service" when it comes to "tire side taping" which is a "material activity" and "not having as its primary object the transfer of possession of a thing", even though things are transferred in the form of materials[20]. The provision of overnight stays in a guest house is also accepted as a service according to the CPA[21], which is definitely not related to a transfer of possession, but there is a transfer of possession over immovable property.
However, when it comes to the applicability of the CPA for the purpose of assessing the nullity of an arbitration clause in a lease agreement, the Supreme Court accepts that the holding of the object, which fulfills the authority of the lessee and the provision of which is the main subject of the lease agreement, is undoubtedly - limited volume of actual power exercised over the thing, and the difference between it and possession is only in the subjective element, which is why the natural person-tenant does not have the quality of "user" according to the CPA /Decision No. 198 of 11.03.2020 of the Supreme Court of Appeal under Item No. 1620/2019, Item II, TC, Decision No. 207 of October 31, 2018 of the Supreme Court of Appeal under Item No. 970/ 2018, Item I, TC/. Attention should be paid to this practice of the Supreme Court, as I consider it wrong and vicious. Chapter Four of the CPA and in particular Section I of it (Art. 43-61), as well as Art. 4 of the CPA, regulating consumer protection when concluding contracts outside the commercial establishment and distance contracts, do not apply to contracts for letting under housing rental for housing needs, according to Art. 46, item 6 of the CPA, as will be discussed below and in a broader sense regarding construction. Also, if it comes to renting for non-residential needs (e.g. of a garage), CPA is applicable, according to the more recent practice of the CJEU – Judgment of 14 May 2020, Case C-208/19 (NK v MS and AS), paragraph 41, EU:C:2020:382. By way of grammatical and systematic interpretation it means that applicable however, in terms of leases, everyone else is (except for Chapter Four of the CPA and in particular Section I of it (art. 43-61), as well as art. 4 of the CPA) provisions of the CPA, incl. of Art. 3, para. 4 of the CPA, declaring null and void all arbitration clauses between merchant and consumer, a for lease contracts of non-residential premises - all provisions of the CPA, as long as the tenant has the status of a user, which is not affected by the subject of the contract, but concerns the applicability of the CPA in relation to the specific contract.
Finally, the main subject of preliminary contracts for the sale and construction of real estate is the making, not the transfer of possession, which is an independent and consequential obligation[22], since the sale itself in the form of a final contract is subject to a suspensive condition, and without the production of the object to at least rough construction, the transfer is impossible (Art. 181, Para. 1 of the SDA). Even more - these contracts are in practice a combination of two contracts that do not have a rem transfer effect – for making (non-essential construction contract, where the contracting party is not the owner of the land, the materials and does not have the right to build)[23] and pre-sale[24]. In this sense, there is no reason to deny that such contracts in the part concerning the production (construction) can be services according to § 13, item 14 of the SP of CPA, since they are not with main subject transfer of possession. Regarding actual construction contracts, where the contracting authority owns the land (the building) or has the right to build, it can also be considered whether their main subject is the transfer of possession (and ownership), or actually a construction service, but for them rather the various applicable parts of the LPA that do not expressly concern the transfer of immovable property should be specified. But again, real construction contracts do not have a property transfer effect (note 22), and in them the contracting party acquires the built on a primary legal basis as the owner.
Directive 2011/83/EU on consumer rights
Chapter Four of the CPA and in particular Sec I from it (art. art. 43-61), regulating consumer protection when concluding contracts outside the commercial premises and distance contracts, do not apply to contracts for the acquisition or transfer of immovable property or for the establishment, acquisition or transfer of limited real rights on immovable property, as well as for the construction of new buildings, substantial remodeling of existing buildings and renting out housing for residential purposes, according to Art. 46, items 5 and 6 of the CPA. Art. is also inapplicable to these contracts. 4 of the CPA, regulating the general obligation to provide information before concluding the contract. It is in the same sense Art. 3, par. 3, b. e) and f) of Directive 2011/83/EU on consumer rights.
In interpreting the provisions of Directive 2011/83/EU, the CJEU, however, stated that Art. 3, par. 3 letter f) of this Directive must be interpreted narrowly /Judgment of 14 May 2020, Case C-208/19 (NK v MS and AS), paragraph 41, EU:C:2020:382/, insofar as it limits the scope of the Directive[25]. Since the text of the same provision specifically refers to contracts for the "construction of new buildings", the subject matter of such contracts must necessarily be the construction of a new building in order to be covered by the restrictions. In cases where the service contracts are related in particular to the construction of additions to buildings (e.g. garage or porch) or with the repair and renovation of buildings, except for substantial remodeling, should be included in the scope of Directive 2011/83/EU, as well as contracts for the services of a real estate agent and for the letting of housing for non-residential purposes – in this see Recital 26 of Directive 2011/83/EU.
The applicability of the CPA and Directive 2011/83/EU on consumer rights to contracts relating to construction services that are not related to new construction or substantial alteration, i.e. all contracts for repair work are covered - these contracts have enhanced consumer protection when concluding contracts outside the commercial premises and distance contracts.
However, the question remains open whether the finishing construction works, as well as all activities after reaching the rough construction of a building and after the transfer of the independent sites to the buyers, can fall under the scope of Directive 2011/83/EU. Here it can be assumed that if the same are carried out by the person who carried out the main construction of a new building, then they were included in the main construction service contract and therefore fall within the scope of the restrictions. However, if it concerns a new contract with the subject of finishing works concluded with a person other than the original builder, then it should be assumed that the rules of Directive 2011/83/EU and the corresponding ones in the CPA are applicable, insofar as, as stated, an expansive interpretation of its restrictive provisions is inadmissible. However, this logic places persons who would essentially provide a construction service with the same object in a different position, depending on the moment of conclusion of the contract. Therefore, it can be concluded that the inapplicability of Directive 2011/83/EU is about the construction of new buildings, but not about finishing works.
Directive 2005/29/EC on Unfair Commercial Practices by Traders to Consumers in the Internal Market
Although Section I (Articles 43-61) of Chapter Four of the CPA is inapplicable to the construction of new buildings and substantial alterations, as stated, Section III (art. art. 68b-68m) from Chapter Four of the CPA, governing Unfair Trade Practices, however, is expressly applicable to all goods and services, including immovable property, rights and obligations, according to para. 68b, para. 2 of the CPA. So e.g. according to art. 2, b. c) of Directive 2005/29/EC "product" means any good or service, including immovable property, digital service and digital content, and rights and obligations. It is curious to note that the CPA does not contain a legal definition of "product".
In the same sense, regarding the application of the Directive, Art. 3, par. 9 of it, which regulates that in relation to immovable property, Member States may impose requirements that are more restrictive or stricter. Thus Recital 9 thereof states that financial services and real estate, due to their complexity and inherent high risk, need detailed requirements, including positive obligations for traders. For this reason, in the field of financial services and real estate, the directive does not affect the right of Member States to go beyond its provisions to protect the economic interests of consumers.
Due to the above, within the scope of Directive 2005/29/EC and Section III (Articles 68b-68m) of Chapter Four of the CPA, regulating Unfair Commercial Practices, all contracts for construction, for the sale of real estate, should be included. for finishing and repair works, etc.
Directive 93/13/EEC on unfair clauses in consumer contracts
The tenth recital in the preamble to Directive 93/13/EEC states that the uniform rules on unfair terms should apply to "all contracts", concluded between "seller or supplier" and "user", as they are defined in Article 2, letters b) and c) thereof /Judgment of 21 March 2019, Pouvin and Dijoux, C-590/17, EU:C:2019:232, paragraph 19/. In this sense, Directive 93/13/EEC on unfair terms does not in any way limit its applicability to different types of contracts, objects, etc., and only and only in relation to the parties to them - if the same are "seller or supplier" and "user" - and as stated above, "seller or supplier" are very broad concepts[26]. Therefore, Directive 93/13/EEC defines the contracts to which it applies, according to the quality of the parties to them - depending on the circumstance whether they act or not act within the framework of their commercial or professional activity /Judgments of 30 May 2013, Asbeek Brusse and De Man Garabito, C‑488/11, EU:C:2013:341, paragraph 30 and of 3 September 2015, Costea, C‑110/14, EU: C:2015:538, item 17/.
This means that the provisions of the Directive transposed in Art. Art. 143-148a of the CPA concerning unequal clauses, incl. Art. 143, para. 2, item 17 of the CPA, regarding arbitration clauses, are directly applicable to all contracts for construction, sale of real estate, finishing and repair works, etc. types of services, as long as the quality of the parties to them meets the requirements of the Directive and the law, subject to EU policy and CJEU practice on consumer protection, namely that where the text to be interpreted is part of a provision, which derogates from a principle or, more specifically, from rules of Union law, the purpose of which is to protect consumers, it must be interpreted narrowly /Judgments of 10 March 2005, EasyCar, C-336/03, EU:C:2005:150, paragraph 21, of 27 March 2019, slewo, C-681/17, EU:C:2019:255 , para 34 and of 12 March 2020, Verbraucherzentrale Berlin, C-583/18, EU:C:2020:199, para 27/.
The Bulgarian judicial practice
As it was stated, the issue under consideration is barely touched upon in the Bulgarian legal literature, but also in the judicial practice. The problems mainly stem from the multitude of mixed transposed EU acts in the current CPA, which leads to confusion when deciding which norms are applicable.
So e.g. in Decision No. 60072 of 30.07.2021 of the Supreme Court of Appeal No. 2/2021, Item I, TC a case was examined in which the parties concluded a preliminary contract for the sale of the right to build, an additional agreement and a notarial deed for the sale of the right to build, concerning and carrying out construction work on the construction and completion of independent objects in a newly constructed building. The case reviewed by the Supreme Court concerned only the validity of an arbitration clause between the parties, and the court accepted that by virtue of the contractual relations between the parties, the defendants-individuals acquire the right of ownership of immovable property, respectively, the preliminary contract and the additional agreement to it, from which disputed rights, subject of the arbitration proceedings, are derived, do not concern "goods" or "services" according to the legal definitions of § 13, item 13 and item 14 of the SP of CPA, which excludes the status of natural persons-parties to the preliminary contract containing the arbitration clause and the additional agreement as "consumers" within the meaning of § 13, item 1 of the SP of the CPA. An identical case and reasons are presented in Decision No. 60026 of 22.07.2021 of the Supreme Court of Appeal No. 2363/2020, Item I, TC, while in Decision No. 60067 of 17.06.2021 of the Supreme Court of Appeals under Item No. 2365/2020, Item II, TC, again in an identical case, held that the contract between the parties in which the arbitration clause was incorporated, has a complex nature: 1.) of a preliminary contract for the sale of real right to construction and 2.) of a contract for the performance of a construction service. It is indisputable that the preliminary contract for the acquisition of a real right to immovable property does not concern "goods" according to § 13, item 13 of the SP of the CPA (where it is explicitly stated that the goods are movable tangible property), and that the contract for the performance of construction activities constitutes the performance of a "service" in the sense of § 13, item 14 of the SP of the CPA. The complex nature of the contract, which provides for a general bond obligation of the buyer-contractor to pay both the price of the property right and the price of the construction service, excludes the quality of the natural person of "user" in the sense of § 13, t 1 of the SP of CPA, since under the contract the agreed construction services are directly related to the rights and obligations of the parties under the preliminary contract of sale. The court, to supplement its reasoning, also referred to the practice of the Supreme Court on leases and CPA, which was discussed above.
However, the opposite is accepted in Decision No. 60602 of 27.07.2021 of the Supreme Court of Appeal under City Decree No. 510/2021, IV year o., GK, which did not allow a cassation appeal and was left in force Decision No. 12077/12.10.2020 under city order No. 4497/2019 of the Sofia Court of Appeal, it being accepted that, in the sense of § 13, item 14 SP CPA, "service" is any material or intellectual activity that is carried out independently, is intended for another person and does not have as its main object the transfer of possession of an object , a the considered contract is of a mixed nature - preliminary for purchase and sale and for awarding the construction of the property. Therefore, its main subject is the construction of this property, and it constitutes a "service" in the sense of § 13, item 14 of the CPA.
Without commenting on which of the decisions are correct, in view of everything presented so far, it can only be said that the practices in construction and in law enforcement regarding CPA will still undergo development and unification, following European trends and policies - and until then the victims, if there are such, it will be only the users.
Future trends in consumer protection
Recital 1 of Directive 2019/2161/EU of 27 November 2019 amending Directive 93/13/EEC of the Council and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council regarding the better implementation and modernization of consumer protection rules in the Union states that Art. 169, par. 1 and Art. 169, par. 2, letter a) of the TFEU provide that The Union must contribute to achieving a high level of consumer protection through measures adopted pursuant to Article 114 of the TFEU. Art. 38 of the Charter of Fundamental Rights of the European Union provides that Union policies must ensure a high level of consumer protection. In this regard, the European Parliament and the Council note that the law in the field of consumer protection must be applied effectively throughout the Union, which is why the Directive should remove some gaps in national legislation regarding the sanctions imposed for violations of the Directives in question. Although the Directive stipulates a deadline of 28.11.2021 for transposition (Article 7), the changes in the CPA are still at the draft law stage[27]. In this regard, and in view of all that has been stated, perhaps the time has come to eliminate some gaps and ambiguities in the CPA, which may still cause problems. But that depends on the will of the legislator.
Ivan Nikolaev, attorney-at-law
[1] Kozhuharov, A. Obligation law. Separate types of bond relations. S. UI "St. Kliment Ohridski", 2002, p. 174.
[2] Decision No. 219 of 21.02.2000 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 1276/1999, Decision No. 1035 of 27.06.2003 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 1808/2002, V ., Decision No. 1574 of 01/07/2004 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 361/2003, TC, Decision No. 475 of 06/08/2010 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 1311/2009, III year o., GK, Decision No. 79 of 25.07.2013 of the Supreme Court of Appeals under city d. No. 538/2012, III year o. Decree No. 1161/2014, III Year of the Supreme Court, Decision No. 210 of 27.07.2015 of the Supreme Court of Appeals under City Decree No. 5600/2014, IV Year of the Supreme Court, Decision No. 96 of 07.07.2017 of the Supreme Court of Appeals pursuant to No. 722/2016, Item II, TC, etc.
[3] Vasilev, L., Contract for the construction of a future property. Ownership and law, 2008, No. 4, p. 5., Madanska, N. Regarding some aspects of the construction contract. Commercial and bond law, 2013, No. 7, p. 18., Milkov, P. Contractual system in construction. S. Trud i Pravo Publishing House, 2014, pp. 232, 244., Tormanov, Z., The contract. A practical guide. Sibi, 2004, p. 537., Tormanov, Z., The contract in construction and real estate transactions. Sibi, 2008, p. 119.
[4] So e.g. in the "Handbook of construction law", Sibi, 2021, p. 392, only the peculiarities are listed when a user participates in a dispute, but not in disputes with the subject of construction and construction, as well as the applicability of CPA in such cases.
[5] On this issue, Miroslav Dimitrov in his work "The Construction Contract". S. Sibi, 2012, p. 55 assumes that the construction contract, as well as the ordinary manufacturing contract, can be consumer transactions according to the Civil Code and that the contracting party can be a consumer. The author also states in a footnote (66) that in Austria there is a special law for the protection of contracting-users in construction - Bauträgervertragsgesetz. In addition, it should be noted that the German Civil Code (BGB) in Chapter 9, Subchapter 1, Section 3, Art. Art. 650i-650n, with mod. and addition, effective from 01.01.2018, expressly provides rules for construction contracts concluded with consumers - Verbraucherbauvertrag.
[6] Pursuant to § 1 of the SP of the CPA, in the event of a conflict between the provisions of two laws, those that provide a higher degree of consumer protection shall apply.
[7] https://www.vas.bg/p/s/t/stanovishte-td3-2019-osgktk-vks-9546.pdf
[8] Which cases are civil and which are commercial within the meaning of Art. 280, para. 3 of the Civil Code, news.lex.bg
[9] https://address.bg/blog/novini/VKS-Address-reshenie
[10] Milkov, P., Contract system in construction. Sofia: Trud i Pravo Publishing House, 2014, p. 124.
[11] Dimitrov, M. The construction contract. S. Sibi, 2012, p. 61.
[12] Opinion of the Supreme Bar Council on interpretation d. No. 3/2019, OSGTC of the Supreme Court.
[13] Decision No. 3682 of 06/07/2018 of the SGS pursuant to City Decree No. 3288/2017.
[14] E.g. The CJEU accepts that lawyers can also be consumers under Directive 93/13 when they conclude a contract that is not related to their professional activity, even if it is assumed that they possess special knowledge and skills - Judgment of 3 September 2015, Costea, C-110/14, EU:C:2015:538, paragraphs 26 and 27. In the position of consumers are also persons concluding contracts with their employers, other than labor - Judgment of 15 January 2015, Šiba, C-537/13, EU:C:2015:14, paragraph 29.
[15] "Seller or supplier" means any natural or legal person who, in his capacity as a party to the contracts subject to this Directive, participates because of interests that are related to his occupation, business or profession, whether in a public or private law context.
[16] "Merchant" means any natural or legal person, whether privately or publicly owned, acting, including through the intermediary of another person acting on his behalf or on his account, for purposes falling within the scope of his trade or business activity, trade or profession in relation to contracts falling within the scope of this Directive.
[17] "Trader" means any natural or legal person who, within the meaning of the commercial practices covered by this Directive, carries out an activity with a subject related to his occupation, work or profession or any person who acts on behalf and/or on behalf of the trader.
[18] These are Directive 98/6/EC the European Parliament and the Council on consumer protection in the indication of the prices of goods offered to consumers; Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011. on consumer rights; Directive 2001/95/EC the European Parliament and the Council on general product safety; Directive 1999/44/EC the European Parliament and the Council regarding certain aspects of the sale of consumer goods and associated warranties; Directive 85/374/EEC of the Council on the approximation of the laws, regulations and administrative provisions of the Member States on liability for damages caused by a defect in a product; Directive 93/13/EEC of the Council on unfair clauses in consumer contracts; Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009. on consumer protection in relation to certain aspects of timeshares, long-term holiday products, resale and exchange; Directive 98/27/EC the European Parliament and the Council on claims for cessation of infringements in order to protect the interests of consumers; Directive 2005/29/EC the European Parliament and the Council on unfair commercial practices by traders to consumers in the internal market; Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013. for alternative resolution of consumer disputes.
[19] One possible explanation is that before the transposition of Directive 2011/83/EU on consumer rights, there were no explicit rules and distinction for the transfer of risk in distance selling and delivery, as the directive does not distinguish possession from holding - Sukareva, Z. Novata consumer rights directive and the upcoming change to the Consumer Protection Act. Commercial and bond law, 2013, No. 7, p. 5.
[20] In Decision No. 2894 of 25.04.2019 of the AdmS - Sofia under adm. e. No. 762/2019, the imposition of a property sanction under the Civil Code for violation of Art. 27 of the Civil Code - the selling price of the service is indicated in BGN.
[21] Decision No. 260000 of 27.08.2020 of RS - Svilengrad under a. n.d. No. 377/2020 confirmed by Decision No. dated 29.01.2021 under a. n.d. No. 1102/2020 of the Administrative Court - Haskovo, in which the imposed property sanction for violation of Art. 27 of the Civil Code.
[22] Kozhuharov, A. Obligation law. Separate types of bond relations. S. UI "St. Kliment Ohridski", 2002, p. 179.
[23] Stavrou, S. Issues of Bulgarian property law. S. Feneya, 2008, p. 539 et seq., Dimitrov, M. The construction contract. S. Sibi, 2012, pp. 69, 185 et seq.
[24] Decision No. 451 of 31.03.2015 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 457/2015, IV year o., GK, Decision No. 239 of 08/05/2011 of the Supreme Court of Appeals pursuant to Administrative Procedure No. 754/ 2010, I year o., GK and others.
[25] The text to be interpreted is part of a provision derogating from a principle or, more specifically, rules of Union law aimed at the protection of consumers, therefore it must be interpreted narrowly - in this sense Judgments of 10 March 2005, EasyCar, C-336/03, EU:C:2005:150, paragraph 21 of 27 March 2019, Slewo, C-681/17, EU:C:2019:255, paragraph 34 and of 12 March 2020, Verbraucherzentrale Berlin, C-583/18, EU:C:2020:199, paragraph 27.
[26] So e.g. "seller or supplier" can also be a lawyer in his relations with a client according to Directive 93/13EEC on unfair terms - Judgment of 15 January 2015, Case C-537/13 (Birutė Šiba v Arūnas Devėnas), EU:C:2015:14.
[27] Decision No. 522 of the Council of Ministers of 22.07.2021 to adopt a Report on the implementation of the Action Plan for 2021 with the measures resulting from the membership of the Republic of Bulgaria in the European Union, as of June 30, 2021, https://www.mi.government.bg/bg/discussion-news/proekt-na-zakon-za-izmenenie-i-dopalnenie-na-zakona-za-zashtita-na-potrebitelite-4104-m268-a0-1.html
