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Distribution Agreements in Hungary

Distribution Agreements in Hungary

Distribution agreements in Hungary are signed in order to limit and control how the original products can be resold by another agent. The aspects under control may refer to price and warranty but also to other display elements which could misrepresent the producer company. Relying on a law firm in Hungary can be of great importance for investors who want to engage in economic trade with Hungarian producers. 

Key aspects of distribution agreements in Hungary

In Hungary the distribution agreements do not restrict the competition at different levels of resale, and do not have special provisions regarding exclusivity. An aspect that should not be neglected by the company management is the fact that distribution contracts are not allowed to block the natural movement of the economy or to restrict the sale of goods to a particular class of customers. Therefore, at the signing of such an agreement it is necessary to obtain from the Office of Economic Competition a declaration who grants the fact that the contract is not implying unfair or restrictive market practices. 

An important aspect directly related to distribution contracts in Hungary is the regulations concerning intellectual property. The original works in literature, design, art and science do not need a special registration. They are granted copyright protection since their creation, up to 70 years following the death of the author. Whether you encounter copyright issues in your business activity in Hungary it would be advisable to count on our attorneys in Hungary who can help you include in your contracts the legal provisions regarding intellectual property.

Contractual aspects of distribution agreements in Hungary

In case of a breach of contract, liability cannot usually be limited. However, when the prejudices are somehow balanced by several actions which are in the advantage of the other party to the contract, then liability might be limited or even excluded. A contract can be terminated when a contracting party delays or fails to conform to the provisions of the agreement.

If the defects of the products result in damages, they fall under the responsibility of the manufacturer. When the manufacturer is not known, all the distributors or the importers must support the penalties, until the original producer is indicated.

In case you are planning to sign a distribution agreement we kindly invite you to contact our Hungarian law firm that can inform you and help you be prepared for the legal implications of such a trade contract.