Hungary: New Civil Code necessitates revision and adjustment of standard business terms in consumer contracts

he rules on contracts between businesses and consumers will change significantly in June 2014 due to entry into force of the new Hungarian Civil Code. Retail businesses should review their standard business terms to bring them in line with legislation.

Under the new rules, consumer rights will be stronger. For example:

  •  consumers should receive extensive information before entering into a contract and
  •  the deadline for consumers to exercise the right to terminate a contract retrospectively is extended.

 Information obligation

 In the case of consumer contracts, businesses already have an information obligation (but less extensive) under current legislation, although these rules only apply to contracts negotiated away from business premises and distance contracts, i.e. doorstep deals, product presentations, online sales and telephone sales.

 The new rules extend the existing information obligation by specifying the information to be given to consumers before entering into a contract. On the other hand the new rules extend the information obligation to every consumer contract. This change may affect the operation of every business in the retail sector.

An exception will be contracts of minor importance which are fulfilled right away. These are typical of the food retail industry or in the field of everyday services, but for example hire-purchase or more important contracts do not fall under this exception.

The extended information obligation will especially focus on consumer rights, remedies, dispute resolution and liability for costs.

Right to terminate retrospectively

In the case of contracts negotiated away from business premises and distance contracts, consumers already have the right to terminate the contract retrospectively within 8 working days. Accordingly, businesses should receive the goods within this deadline and return the price paid.

From June, the deadline will be extended to 14 days. However, if a business has not informed the consumer about the right to terminate retroactively before concluding the contract, the deadline will be extended by 12 months, so that goods can be returned during a year or more.

All this means that businesses have good reason to review their current standard business terms and internal policies on return of goods to ensure they comply with the new legislation from June 2014.

(Main exceptions from the new rules are healthcare services, financial services, real estate purchase and lease, construction contracts, package holidays, time-share and – with limitations – land, water and air passenger transport.)

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