Liability for breach of contract in Hungarian law

Abstract

The new Hungarian Civil Code of 2013 changed the liability system of the Civil Code of 1959 and shifted to a system where liability in tort and liability of breach of contract constituted two separate regimes. While liability in tort remained a fault-based liability, liability for breach of contract is a strict liability. With this solution, the legislature attempted to bring the system of liability for breach of contract close to the liability system provided in the CISG. A foreseeability limit has been introduced as the statutory limitation of the liability for breach of contract. Hungarian court practice already faces the problem resulting from this system, especially with borderline cases, interferences of liability regimes (e.g. liability for the extra hazardous activity of motor vehicle operators vs contractual liability), conceptual vagueness (e.g. interpreting ‘beyond his control’ as an element of exoneration from strict liability), or differentiation between deliberate and negligent wrongdoing from the point of view of the foreseeability limit. Liability for breach of contract in Hungarian contract law is analysed in the chapter in the context of these issues as well as in the context of excluding liability and the agreed remedies like penalty and liquidated damages.