Essential terms of a preliminary contract and a judgment declaring it final

Mihail Tomov, Lawyer | Varna

A preliminary contract must set out the essential terms of the final contract. In a sale, these concern the property and the price. A notarial transaction involving individual properties requires a precise description for entry in the notarial records. A full description gives at least three boundaries; in areas with an effective cadastral map it must also include the cadastral identifier. A preliminary contract need only describe the property sufficiently to identify it in light of the circumstances and the parties’ dealings at the time. A precise description must appear in the operative part of a judgment declaring the contract final or ruling on title. The statement of claim must therefore contain such a description, which may be corrected or clarified during the proceedings, for example if a cadastral map enters into force while the case is pending. See Supreme Court of Cassation Judgment No. 514 of 6 December 2011 in civil case No. 905/2010, Civil Chamber, reporting judge Borislav Belazelkov.

When granting a claim under Article 19(3) of the Obligations and Contracts Act, the court reproduces the terms of the preliminary contract in its judgment, which takes the place of the final contract. Those terms are the parties’ agreement, rights and obligations, rather than the literal wording of the property description. The contract’s purpose must also be considered when interpreting it, including its descriptive provisions (Supreme Court of Cassation Judgment No. 140 of 9 May 2012 in civil case No. 832/2011, Civil Chamber, reporting judge Emil Tomov).

If you have questions about a preliminary contract or are about to buy property, it is advisable to consult a real estate lawyer.