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Hungary

Unfair consumer contracts regulated

Until recently, Hungary had paid little attention to unfair general business conditions and unfair clauses in consumer contracts. Only a single paragraph of the Hungarian Civil Code had contained rules concerning the voidability of general business conditions where a legal entity, in drafting a contract, uses previously fixed contractual terms which give it an unjustified advantage.

It was not until March 1998 that the Civil Code was changed in this regard and provisions significantly more detailed were added. Now, general business conditions and certain clauses of contracts between a company and consumers are deemed unfair if they violate the principle of good faith by stipulating rights and obligations of the contractual parties in an unbalanced way and unjustifiably at the expense of one party.

On March 1 1999, an ordinance took effect which added more specific provisions to the Civil Code concerning unfair clauses in consumer contracts. The ordinance differentiates between those contractual terms which are clearly unfair and thus not permitted, and terms regarding which there is a rebuttable presumption of unfairness. The first category includes the following : the company, but not the consumer, may terminate or rescind the contract at any time; the consumer is not permitted, or has a limited right, to provide contractual performance by means of set-off; the burden of proof is changed to the consumer's disadvantage; the liability of the company for the acts performed by persons employed in performing its obligations is excluded or limited; only the company has the right to determine whether performance is in conformity with the contract; and impermissible obstacles are put in the way of the consumer asserting claims under the contract.

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