20 April 2020
The emergence of the new type of coronavirus (COVID-19) and the resulting governmental measures pose serious challenges to a number of economic sectors. In recent weeks, businesses have been facing serious and unexpected problems with regard to the performance of their contracts, which have called for the application of legal institutions previously only mentioned in the news (such as force majeure) and special rules applied once every leap year.
In Hungary, the legal challenges come with the additional difficulty that the Civil Code does not contain a general force majeure rule that would suspend contractual obligations while their performance is hindered. This means that parties principally remain bound to their contracts despite the extraordinary circumstances. To be sure, there are exceptions to this principle, but these are scattered all over the Civil Code and relevant case law. Fortunately, we have collected them in the document below.
In the following FAQ, we review the most important legal issues raised by the emergency in light of general and special rules of contract law in a systematic yet practical way. We hope that the review will help you navigate the myriad of rights and obligations even under the current extraordinary circumstances.
Of course, when assessing legal problems, one must take into account all the circumstances of the individual case. With regard to contractual relations, special attention should be paid to the fact that in many cases individual contracts deviate from the general rules of civil law, in which case, first and foremost, the specific rules of the contract shall prevail.