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Curia’s Unity Decision on the Transfer of Contracts

Curia’s Unity Decision on the Transfer of Contracts

Hungary
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The Curia has made a legal uniformity resolution no. 7/2021 PJE on the enforcement of the rules of contract transfer. The resolution has been trying to put an end to the issues of contract transfer, especially in the case of agricultural leases. The previous legal practice was based on the interpretation that the contract shall be deemed to be a new contract in respect of all rights and obligations transferred.

However, the new resolution sought to deviate from this interpretation. The Curia stated that a regulated contract transfer is a transfer of all the rights and obligations of the party leaving the contract to the party entering into the contract, while maintaining the continuity of the legal relationship. Therefore, it results in a legal succession between the withdrawing and the entering party. In summary, the Curia indicated that the transfer of the contractual position terminates the obligation between the withdrawing and the remaining party, and all previously created rights and obligations, with the exception of the personal rights and obligations of the withdrawing party, remain the same between the party entering into the contract and the party remaining in the contract.

By Levente Csengery, Partner, KCG Partners Law Firm

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The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

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