Validation of Form-Defective Contracts in Hungarian and Romanian Law: A Comparative Analysis with Special Regard to Contracts on the Conveyance of Real Estate
Validation of Form-Defective Contracts in Hungarian and Romanian Law: A Comparative Analysis with Special Regard to Contracts on the Conveyance of Real Estate

Summary/Abstract: The paper examines the intricate interplay between contractual freedom, consensualism, and mandatory form requirements in Hungarian and Romanian law. Both countries emphasize the foundational principle that contracts result from the mutual and unanimous expression of parties’ will, allowing autonomy within legal constraints. In Hungary, a historic shift in 1977 introduced a court-led declaration of validity, enabling retroactive validation of contracts by eliminating causes of invalidity. The Hungarian Civil Code permits both ex tunc and ex nunc validation. Similarly, in Romania, the principles of autonomy and freedom of contract are considered primary, but the Romanian Civil Code mandates specific forms for certain contracts, with nullity arising from non-compliance. However, the Romanian Civil Code provides means of validation of form-defective contracts, focusing on relative nullity (avoidability) but allowing exceptions of absolute nullity in specific cases. The article examines the validation of contracts lacking mandatory formal requirements, particularly the ones on the transfer of ownership of real estate. Namely, in Hungary, validation means granting validity to a contract retroactively by performance of contractual obligations or by eliminating the causes of invalidity, with a few exceptions. In Romania, the rules on validation provide remedies through confirmation of a contract that is struck by nullity.

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