Budapest Newsletter: rules pertaining to contracts in the new Hungarian Civil Code
On 15 March 2014, the new Civil Code entered into force as the most important legislation governing the financial and personal relations of companies and persons. The new code has an increased commercial emphasis incorporating the results of legal developments of the past decades by adapting to the economic needs of our times. The new code takes into account the rules crystallised in the Hungarian trade of property and has regard to European legislation as well. The new act came with several new and completely or substantially reformed legal institutions. The changes concern the activity of enterprises widely, thus familiarisation and appropriate preparation by business participants is fundamental.
This newsletter outlines certain rules of the new Civil Code, i.e. Act V of 2013 (hereinafter: ‘New Civil Code’) regarding the law of obligations that affects, among others, the rules pertaining to contracts.
1. The rules concerning contractual legal declarations in general
Formal requirements: under the new Civil Code, a legal declaration may be made either in writing or verbally or by implied conduct. If the legal declaration is made by electronic means, then it is equivalent to the written declaration if the electronic document is supported by electronic signature of at least increased security and time stamp. The rule stating that the contractual legal declaration made by electronic means becomes effective at the time when it becomes accessible to the other party calls for regular inspection of electronic correspondence. It is also relevant that silence or abstaining from certain conduct may only qualify as a legal declaration upon the express disposition of the parties. An important new rule regarding declarations in writing is that if the signatory does not understand the language in which the document was made, it is required for the validity of the declaration that it is made apparent within the document itself that its content was explained to the party making the declaration by one of the witnesses or the certifying person…
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