What to include in a contract in Hungary?
Parts of a contract in Hungary
No matter what a contract is about, it should include the following parts to ensure that the interests of both parties remain protected while they are both aware of their rights and obligations.
Title
Every contract should have a descriptive title, e.g. sales agreement, rental agreement.
Contracting parties
Contracting parties (and their representatives) should be defined.
Validity period
When will the contract come into force and when will it be terminated. If it is a purchase agreement, the contract will be complete when the sale is complete. Regarding services, contracts can be created for a fixed or an indefinite period.
If the contract is not about a single exchange, but something ongoing, e.g. a rental agreement or an accounting service, terms on who and how can terminate the contract should be included.
Scope
The subject of the contract, including the main tasks and expectations of the parties.
Rights and obligations
A detailed list of rights and obligations of each party.
Delivery
A definition of when the subject of the contract can be considered delivered, and how receipt is supposed to be confirmed. Delivery might mean different things for physical objects or services.
Payment terms
How and when the subject of the contract should be paid for. If it is about an ongoing service, this typically includes how often you will receive bills, and what payment deadline to expect for each.
Guarantees
Additional obligations related to performance, such as deposits, late fees, non-delivery fees, penalties, or refunds. (It will depend on the type of agreement whether any of these should be included.)
Force Majeure
Sometimes things happen that are out of the control of either party, but which prevent the parties from delivering their part. It is good practice to include procedure for such unforeseeable events to reduce harm to both parties.
Jurisdiction
Especially if you move around a lot, it is important to know how and where you can ask for legal remedy if there is a dispute between you and the other party. Contracts made in Hungary will typically fall under Hungarian jurisdiction – and this should be spelled out in the contract. Additionally, if you are signing a bilingual contract, there should be a line about which version should prevail if there is a difference between the two.
Date
The date when the contract was signed should be indicated next to the signatures.
Signatures
The contract should be signed by both parties (or their representatives). In most cases, a contract also requires some kind of attestation, which can be done by two witnesses, a lawyer, a notary, or another official.
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FREQUENTLY ASKED QUESTIONS
A rental agreement should have all the above listed parts, tailored to the situation. You can learn more about rental agreements in Hungary here.
An employment contract should have all the above listed parts, tailored to an employment relationship. You can learn more about employment contracts in Hungary here.
On the one hand, you should enter into contracts only with partners you trust. On the other hand, the contract should include sections to increase trust, such as provisions for what happens if either party does not adhere by the terms of the contract, and you will be able to enforce your claims in court. To increase the binding power of a document, it should also be attested – learn more about attestation here.
You are supposed to sign a contract in blue ink pen, typically in front of the other party and witnesses. You can learn more about the formal requirements of contracts in Hungary in our upcoming article.
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