Legal term for payments in Hungary

Yes, the statutory payment terms are specified in the Hungarian Civil Code, which are based on the rules set forth in EU Directive 2011/7/EU on combating late payments in commercial transactions.

2. Is there a standard payment term set out in law? If so, what is it?

Yes, in the absence of the parties’ contractual agreement on payment term, a 30-day statutory payment term is applicable. 

As a rule, this should be calculated from the receipt of the invoice or payment notification. In case the performance of the contract is later than the receipt of the invoice or payment notification, the deadline should be calculated from the date of performance. 

3. In what circumstances may parties contractually agree to extend payment beyond the standard payment term?

A contract between business undertakings extending the payment term up to 60 days does not involve any specific requirements.  However, a payment term that is longer than 60 days is considered unfair until proven otherwise and can be contested.

In a consumer contract, the payment term applicable to the business undertaking can be extended up to 45 days. However, a payment term that is longer than 45 days is considered unfair until proven otherwise, and is null and void.

Extending the above 60- and 45-day payment terms requires careful consideration, and is possible only in special circumstances when such a long payment term would not qualify as unfair. A case by case analysis is required.

4. May an obligation beyond the standard payment term be evidenced in a PO?

Yes, if this is the contractual agreement of the parties, or if the other party specifically agrees to the payment term specified in the PO.

5. Are there any penalties for breach of payment term in legislation other that a civil claim by the seller?

In case of an unfair payment term in the general terms and conditions of a contract between business undertakings, the organisation representing the interests of business undertakings may initiate public-interest legal proceedings contesting such unfair payment terms.

6. Is there any special legislation regarding payment obligations for the COVID-19 situation?

Based on Government Decree 47/2020. (III. 18.), a payment moratorium applies to credit, loan and financial leasing contracts according to which payment terms for debtors are prolonged until the end of the moratorium on 31 December 2020.

Dóra Petrányi
Partner
Budapest