Compensation claim / damages in Hungary
Are you seeking to enforce a compensation claim but are unsure which legal requirements apply under Hungarian law?
Do you believe that your business has suffered damage and are looking for reliable legal representation?
One of the most important functions of Hungarian civil and property law is the allocation of damage and risk.
Legal subjects must have legal certainty as to who bears the risk and who is liable for the damage.
In this context, a distinction must be made between risk and damage.
Risk refers to the possibility of a negative change in assets, while damage means an actual decrease in assets
(damnum emergens) or the loss of expected profit (lucrum cessans).
This also includes the costs incurred in reducing or mitigating pecuniary and non-pecuniary losses.
The purpose of the civil law institution of damage allocation is to determine, within the framework of equal legal
relationships between parties, which party is required to bear both avoidable and unavoidable damages.
Under the Hungarian Civil Code (Act V of 2013), compensation (liability for damages) is the primary method of
damage allocation in cases where damage is caused by unlawful conduct.
As a general rule, the damage is allocated to the tortfeasor; however, statutory exceptions do apply.
The Civil Code distinguishes between different liability regimes, including delictual liability
(liability for damage caused outside a contractual relationship), contractual liability
(liability for damage caused by breach of contract), strict liability for dangerous activities,
and force majeure (vis maior).
Where damage has (presumably) occurred, Hungarian law differentiates between delictual and contractual liability.
It is important to note, however, that parallel compensation claims may not be enforced
(the non-cumul principle).
Accordingly, even if the facts of the case would otherwise establish delictual liability,
a compensation claim must be asserted under the rules of contractual liability if a contractual relationship exists
between the parties.
The legislator provides the possibility of exoneration for the party causing the damage in both the delictual and
contractual liability regimes.
Delictual liability is, as a general rule, fault-based.
Its essential elements are the occurrence of damage, unlawful conduct, fault (culpability),
a causal link between the conduct and the damage, and legal capacity to be at fault.
In contrast, exoneration under contractual liability is subject to considerably stricter conditions.
The breaching party is relieved from liability only if it proves that the damage was caused by:
- a circumstance beyond its control (i.e. an extraordinary event not influenceable by the breaching party),
- a circumstance that was not foreseeable at the time of concluding the contract (even for a reasonable person in the same position), and
- a circumstance which the party could not reasonably be expected to avoid or overcome at the time of the breach.
Our law firm provides comprehensive legal representation in compensation matters, both in litigation and in out-of-court proceedings.
Feel free to contact us with confidence so that we may assist you in enforcing your claims and protecting your legal and business interests.
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