The forwarding contract under the Bulgarian Commerce Act

Pursuant to Art.361 (1) CA, under a forwarding contract a forwarding agent shall undertake, for compensation, to conclude a contract for transportation of cargo in his own name and on account of the principal. It is an absolute commercial transaction (listed in Art. 1 (1) CA) and the person who concludes it is entitled to commercial capacity. Subject of this type of contract can only be cargo transportation.

Obligations of the forwarding agent include:

  • to conclude a contract of carriage with due diligence, i.e. under the most favorable conditions, at the best rate;
  • to store the cargo from the moment it is provided by the principal to its forwarding to the carrier;
  • to carry out the instructions given by the principal on the mode of transport, route and direction. They would not be responsible if they could prove that the same or greater damage would have been suffered if they had fulfilled the instructions of the principal. However, they cannot avoid liability if they prove that the damage occurred as a result of a fortuitous event or force majeure.
  • to comply with the instructions given by the principal on the carriers and future forwarders;
  • to notify the principal, if they find that the packaging of the cargo is inappropriate;
  • to transfer the rights and obligations under the carriage contract and to account for any expenses incurred therefrom;
  • to contract for the insurance of the cargo if so agreed in the contract.

Obligations of the principal:

  • to notify the forwarding agent of any specific qualities and characteristics of the cargo, in order for them to undertake whatever is necessary for its proper storage and conservation, and choose suitable vehicles for its transportation;
  • to pay the agreed remuneration;
  • to accept the rights and obligations under the carriage contract;
  • to reimburse the forwarding agent for any expenses incurred - the payment of insurance premiums, the respective fees and unloading of the cargo. In order to secure payment of the forwarding agent, the law arranges a statutory lien on the cargo, assuming that this lien is exercised as long as the forwarding agent is in de facto possession of the cargo.

The legislator allows for the possibility the forwarding agent himself to perform all or part of the shipment.

Art. 366 CA introduces a special one-year limitation period for forwarding contracts, applied only to claims for damages in the default period thereof. As regards the other claims arising from the forwarding contract, the general limitation period applies.