Agency Contract in Hungary

As noted above, thanks to its geographical location, in the center of Europe, and therefore of the large communication networks, not only road and rail, but also of waterways, Hungary is one of the most attractive countries as a "hub" for anyone who is about to carry out commercial penetration programs from the West to the East, and vice versa.


In this sense, one of the natural and most logical choices is to appoint local agents who can deal with the development of the marketing of a specific product or service not only within the country but also in neighboring countries of interest.


So let's proceed with the analysis of this important type of contract. The main discipline of the agency contract and relations with commercial agents was constituted, until March 2014, by law no. CXVII of 2000 with which Hungary had substantially transposed the Directive n.653 / 86 / EC on commercial agents, aligning its national legislation with that of the other Member States, especially as regards the minimum protective standards of the commercial agent, considered weak part of the relationship.

Following the reform of the civil code, which entered into force on March 15, 2014, law no. CXVII of 2000 was repealed and the agency contract is now fully governed by the rules of the new civil code. The new Hungarian Civil Code deviates from the logic of the CXVII law of 2000 and the European Directive on independent commercial agents, since it does not autonomously regulate the commercial agency contract.

The new Hungarian Civil Code, on the other hand, provides for the existence of an intermediation contract ("közvetitői szerződés") whose discipline is of a general nature, regulating all relations concerning the performance of activities aimed at concluding a contract between a principal / principal and a third party. The code now distinguishes between two types of brokerage contracts: a non-continuous brokerage contract ("nem tartós közvetitői szerződés") to which the mandate rules apply, and a continuous brokerage contract ("tartós közvetitői szerződés") to which some special provisions apply which are basically a transposition of Directive 653/86 / EC.

When a foreign company intends to enter into an agreement with an agent in Hungary, it must carefully evaluate the opportunity to use, as the law applicable to the relationship, the Hungarian law, bearing in mind that the new Civil Code has not implemented some provisions of directive 653/86 / EC or those relating to the commission due to the independent commercial agent (articles 6-12 of the directive).

The discipline of the commission due to the independent commercial agent is envisaged today by the Government Decree 65/2014 (III.13.), Which generally concerns the commission due to the mediator in the context of an ongoing brokerage contract. The foreign company must also consider that the stipulation of an agency contract in Hungary may require the adoption of particular formalities in certain sectors, for example the pharmaceutical or chemical sector, and will therefore be subject to constraints or requirements deriving from specific administrative and fiscal rules.

It should be noted that the provisions of the new Civil Code and the Government Decree 65/2014 (III.13.) apply exclusively to contracts concluded after 15 March 2014; the relationships of independent commercial agency that arose previously, however, continue to be governed by the provisions of law CXVII of 2000 and the Civil Code of 1959 with its subsequent amendments; under the previous legislation, the parties could freely determine the content of the contract and establish the duration of their relationship, but there were some provisions of Hungarian law - established in order to guarantee greater protection to the agent - which were imperative and mandatory, including the duty to pay the agent a severance indemnity, calculated on the basis of the amount of commissions lost by the agent due to the termination of the relationship and the obligation of the principal to pay the agent a commission due when the negotiated contract was concluded as a result of the agent's business or if the principal had entered into a contract with a client previously acquired by the agent for a similar contract. Finally, it is necessary to underline that the foreign company that stipulates an agency contract with a Hungarian agent that is a legal person, should include a clause in the contract that provides for the exclusive competence of an arbitration judge to know and decide any disputes. On the other hand, when a contract is signed with a natural person agent, it must be remembered that the agent must necessarily be summoned before the Judge of the country in which his domicile is located, while the parties will be able to establish the jurisdiction of a different Judge only by virtue of an agreement after the dispute arose. In Hungary, unlike other States especially members of the European Union, disputes relating to commercial agency are not reserved to the functional competence of the labor judge, not even in the case in which the agent operates as a natural person: the labor judge will have jurisdiction. only if the exact details of the dependent work occur.