Under Article 38(1) of the Bulgarian Obligations and Contracts Act (\u0417\u0417\u0414), an agent acting for a principal may not contract with themselves personally or with another person whom they also represent, unless the principal consents. Under Article 39(1), the scope of the agent\u2019s authority in dealings with third parties depends on the principal\u2019s declaration of intent. The Act singles out powers for which that intention must be expressed explicitly: the power to contract with oneself (Article 38(1)) and the power to delegate authority (Article 43(1)). In the first case, the possibility of a conflict between the interests of principal and agent warrants greater protection for the principal; in the second, the principal is entitled to choose their representative personally. To lift the prohibition in Article 38(1), the principal must expressly authorise the agent to contract with themselves. If the agent nevertheless does so without prior consent, the transaction may still take effect between the parties (the principal and the agent acting as the other contracting party) if the principal subsequently ratifies it. Article 38(1) falls within the part of the Act dealing with representation. On this reading of the provision, by ratifying the contract the principal rejects the suggestion that there is a conflict of interest. The possibility of ratification means that the contract is ineffective pending ratification rather than absolutely void under Article 26. A contract made in breach of Article 38(1) therefore does not produce its legal effects while its validity is in suspense. Only the person for whose protection the rule exists, namely the person on whose behalf the contract was made, can invoke that defect.<\/p>\n
If the principal ratifies the contract, ratification has retroactive effect: the contract produces its legal effects from the date it was concluded. Where the contract transfers rights in rem over immovable property, ratification must take the form required for the power of attorney: it must be in writing, with notarial certification of both signature and contents (Article 42(2), read with Article 37).<\/p>\n
Without ratification by the principal in the form required by Article 42(2), the parties are not bound by the contract from the outset. In particular, if its object is the transfer of rights in rem over property, those rights do not pass. The principal\u2019s reliance on the defect amounts to a refusal to ratify. The principal may raise it by bringing a claim or as a defence on a preliminary issue in civil proceedings, including an action concerning ownership. Once the principal invokes the invalidity of a contract made in breach of Article 38(1) and thereby refuses ratification, its ineffectiveness becomes definitive.<\/p>\n
This article is not a legal opinion or advice on any particular situation or person. For help with an individual case, consult a civil lawyer experienced in claims under the Obligations and Contracts Act (\u0417\u0417\u0414).<\/em>
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