FIDIC Contracts and Hungarian Law or the Most Important Aspects of Using FIDIC Contracts in Hungary

Hungarian law is part of the European-continental legal system. It most closely resembles German law in particular and is the sum total of itemised legal norms. Developed on the basis of Roman legal tradition, these norms incorporated into codes and promulgated legislation. FIDIC contracts however, fundamentally bear the hallmarks of, and presuppose the customs of, Anglo-Saxon contracts. In light of this, whenever comparing Hungarian law to FIDIC contracts and aligning them in practice, we are faced with the problems that occur when there are conflicts between Anglo-Saxon and Hungarian law in specific cases. The Hungarian private law including the provisions of the civil code dealing with contract for works is dispositive so the use of the FIDIC forms is generally viable without major adjustments in the particular conditions. However, it is a specific feature of Hungarian construction law that it contains a great many mandatory norms from which the parties must not deviate. Divergent provisions in construction contracts may be declared null and void despite complying with the terms and conditions of FIDIC contracts. This is because the mandatory Hungarian legal provision prevails in the legal relationship - even when Hungarian law is not chosen as the governing law by the Parties. Problems in connection with the above occur primarily in legal disputes between the Parties and during tests by Hungarian construction supervisors. In this short study, we provide a brief overview of specific, frequently asked questions based on the Red Book and the Yellow Book that arise when drawing up a FIDIC contract in Hungary. The study will further examine instances when the terms and conditions of FIDIC contracts need to be aligned with the provisions of Hungarian law.For the purposes we focus on the provisions of Hungarian law which are to be applied when choosing Hungarian law as the governing law or when applying the terms and conditions of FIDIC contracts (irrespective of Hungarian law) in certain cases