Transfer of Contracts under Hungarian Law

Abstract

The paper explores how the transfer of contracts has evolved in Hungarian law. Even though the Civil Code of 1959 did not include rules on the transfer of contracts, the courts acknowledged that legal succession in the position of a contracting party is possible by way of a trilateral contract, where all rights under the original contract are assigned and all debts are assumed. The new Civil Code of 2013 incorporated some rules that developed in the case-law of the courts, but these rules have led to uncertainties. These can all be traced back to the fundamental question of how the transfer of contract can be described, whether it is a novation, an assignment together with an assumption of debt or whether it is a sui generis legal institution. This paper argues that the transfer of contract can be described as a transfer of all rights and the assumption of all debts under a contract. A law based on this interpretation can fulfil the needs of all parties involved and can fit into the system of the Hungarian Civil Code.