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Hungary

The Hungarian Civil Code governs collateral agreements in a separate chapter. Some forms of collateral are accessory in nature, ie are dependent on the principal claim (eg a suretyship), others are independent. Section 249 of the Hungarian Civil Code expressly includes in the second group bank guarantees by which a bank obliges itself to make payment to the beneficiary in accordance with the conditions in the statement of indemnity, and within the agreed period of time.

The Supreme Court (Legfelsöbb Bíróság) of Hungary analyzed the legal nature of the bank guarantee in a recent decision. In the specific case, the loan agreement between the lender and the debtor stated that the loan was secured by a bank guarantee. Because the loan was not repaid, the lender demanded payment of the loan amount under the guarantee from the guarantor (a bank) plus interest, although the promise of payment in the statement of indemnity was limited to a specific maximum sum. Because the guarantor disputed the resulting amount to be paid, litigation was instituted. The Supreme Court held that the agreement on the bank guarantee between the lender as beneficiary and the guarantor (bank) constituted, under statutory law, a legal relationship completely independent of the legal relationship between the lender and the debtor. Thus, the content of the statement of indemnity was decisive solely with regard to the conditions for payment based on the bank guarantee. In the specific case, payment had to be made only in the amount in the statement of indemnity. However, a consequence of this independence of the two legal relationships is that claims by a lender against a debtor arising from their legal relationship cannot be passed on to the guarantor, who thus has no claim against the debtor for reimbursement.

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