The Hungarian legislative environment provides consumers with broad legal protection in the case of contracts concluded with businesses.
Consumers are natural persons who conclude contracts for private purposes, while undertakings conclude contracts for business purposes.
If the content of a contract is not clear, the interpretation that is more favourable for the consumer must be adopted. When concluding the contract, the consumer’s rights cannot be prejudiced, and the consumer may not waive his rights.
Contractual clauses in which a consumer undertakes, for instance, to transfer ownership or establish an option in order to provide a guarantee that he will pay his debt, may not be applied.
If an unfair general term is applied in a contract concluded by a consumer or between undertakings, the provisions of such terms are not to be applied, and must be considered as void. A consumer may invoke this circumstance without any time limit; however, an undertaking may only do so within one year from the conclusion of the contract.
In the case of a contract concluded by a consumer, the consumer may pay his debt prior to the deadline. If the undertaking sells a defective product, the consumer has favourable time limits for recognising and communicating the defect, and making a warranty claim for latent defects (repair or replacement by the retailer) or a product warranty claim (repair or replacement by the manufacturer).
Furthermore, the parties may not deviate from the legal provisions to the disadvantage of the consumer.
In the case of off-premises contracts and distance contracts, for example for a purchase made online, the undertaking has to fulfil special information obligations prior to the conclusion of the contract (e.g. present the undertaking, the product, available legal remedies). In the case of such contracts, a consumer may change his mind about the purchase within fourteen days. This also applies to digital content – e.g. a video game – that is not sold on a tangible medium.
Door-to-door selling, where the retailer contacts the consumer in his home between 9:00 a.m. and 7:00 p.m., is a special form of sale. Certain products, however, such as food or medication, may not be sold door-to-door.
Under Hungarian law, sales at fairs, markets and in public areas (e.g. at a Christmas fair in a public area) do not constitute off-premises contracts. Fairs and markets may only be operated in possession of an official licence, with records kept of the sellers. Sales in public areas may only be carried out in possession of the necessary official licences and with the indication of the name and registered office of the seller.
Failure of the party to (adequately) perform the contract constitutes a breach; the breaching party must bear the consequences of its wrongful conduct.
In the event of a breach, the entitled party may withhold its services (e.g. the product that it wishes to sell) until the obliged party performs the contract (i.e. pays the purchase price), or may terminate the contract.
If, as a result of the breach, the entitled party no longer has an interest in performing the contract, since the occasion for which the party wished to purchase the product has passed, it may also terminate the contract.
In the event of the termination of the contract, none of the parties is obliged to perform the contract.
In the case of off-premises contracts and distance contracts, if the undertaking fails to fulfil its information obligation, the consumer may change his mind about the purchase for an additional 12 months (instead of the original 14 days).
In the case of any contract, the breaching party must pay compensation for the damage caused by the breach.
If the obliged party fails to perform the contract (e.g. to send the ordered product), the entitled party may demand its performance or, if it no longer has an interest in performing the contract due to the failure to comply with the performance date, it may terminate the contract.
If the obliged party pays its monetary debt after the deadline, i.e. in the event of late payment, it must pay default interest – if the monetary debt was free of interest. The default interest is equal to the base rate on the first day of the given calendar half-year; i.e. currently 0.9%. Therefore, if a debtor is to pay his debt by 31 March 2020, he must pay the amount of the debt plus the base rate as of 1 January 2020 as default interest.
If the entitled party receives interest under the contract, then in addition to the interest specified in the contract, the default interest amounts to a third of the base rate on the first day of the given calendar half-year.
In the case of contracts concluded by and between undertakings, the default interest is higher; it amounts to the base rate on the first day of the given calendar half-year increased by eight percentage points (currently 1.7%).
In the case of commercial transactions between undertakings, the entitled party is eligible to lump sum recovery charges of EUR 40, which is intended to cover the costs incurred due to the recovery of the claim.
The monetary debt must be paid within 30 days from the entitled party’s receipt of the request for payment or invoice, unless the parties set a different performance date.
The party entitled thereto may claim the lump sum recovery charges within one year.
In the event of a legal dispute relating to the contract, if the party brings the matter to court, the following must be indicated in the petition:
In the introductory part:
In the substantive part:
In the final part:
The following must be annexed to the petition:
In the event of a case falling within the competence of the district court, the claimant acting without a legal representative must file his petition using the form intended for this purpose. The purpose of the form is to facilitate the enforcement of the claim, since it serves as a guide to the claimant in order to ensure that all the necessary information is included in the petition.
In the event of a case falling within the competence of the district court, the claimant acting without a legal representative is not required to indicate in the petition the legal grounds, the legal reasoning or the provisions.
In the event of a case falling within the competence of the district court, the enforcement of the claim of a claimant acting without a legal representative is also facilitated by the fact that he may lodge his claim verbally before the district court of his domicile or workplace, or the district court having competence over the litigation during the designated hours of operation; the court records the claim on the form intended for this purpose.
Upon the initiation of the proceedings, a duty amounting to 6% of the amount of the value of the subject-matter of the dispute, but no less than HUF 15 000 and no more than HUF 1 500 000, must be paid.
Court As a rule, depending on the monetary value of the subject-matter of the dispute, the district court or the General Court acts in the first instance.
Court of second instance/Appeal.
In cases where the district court acted in the first instance, the court of second instance is the General Court. In cases where the General Court acted in the first instance, the court of second instance is the Court of Appeal.
The following services are available to businesses for learning about their obligations regarding consumer contracts:
Date of preparation: 27 May 2020
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