Dentons Budapest Newsletter — rules pertaining to contracts in the new Hungarian Civil Code: part II
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.
In this newsletter, Dentons outlines certain rules of the new Civil Code, i.e. Act V of 2013, regarding the law of obligations that affects, among others, the rules pertaining to contracts.
Failure to perform any duty in conformity with the contract constitutes a breach of contract. In this case, the aggrieved party may demand the performance of the service. The obligee may withhold the proportionate part of his own due service until the performance of the obligor or the provision of adequate security. In case of breach of contract by one of the parties, the other party may rescind the contract if his interest in its performance ceases or, if the conditions before the conclusion of the contract may not be restored in kind, he may terminate it. Furthermore, it is an important rule that the oblige — in case of his rescission or termination — may conclude a hedging contract and may demand from the obligor the difference between the considerations stipulated in the original and the hedging contract with the costs arising from the conclusion of the hedging contract…
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