SME Rights in B2B Contracts: When Small Businesses Get Consumer Protection in Hungary

Introduction

In most legal systems, consumer protection law draws a sharp line between consumers — natural persons acting outside their trade, business, or profession — and businesses, which are presumed to operate on a level of commercial sophistication that does not warrant the same degree of protective regulation. Hungarian law, rooted in Act V of 2013 on the Civil Code (Ptk.) and a growing body of sector-specific legislation, generally follows this dichotomy.

However, the reality of commercial life in Hungary — where small and medium-sized enterprises (kis- és középvállalkozások, “KKV”) constitute over 99% of all registered businesses — increasingly challenges this binary approach. A sole proprietor with three employees negotiating a contract with a multinational corporation may have no more bargaining power than an individual consumer. Recognising this, both Hungarian and EU law have developed mechanisms that extend consumer-like protections to smaller businesses in certain B2B contexts.

This article examines when and how Hungarian SMEs may benefit from protective rules in their commercial relationships, covering unfair contract terms, late payment rules, and relevant EU directives.

Defining SMEs Under Hungarian Law

The Kkv. Act

The legal definition of SMEs in Hungary is set out in Act XXXIV of 2004 on Small and Medium-Sized Enterprises (Kkv. tv.), which transposes the EU SME Recommendation (2003/361/EC) into national law. The classification is based on headcount, annual turnover, and balance sheet total:

Category	Headcount	Annual Turnover	Balance Sheet Total
Micro-enterprise	< 10	≤ EUR 2 million	≤ EUR 2 million
Small enterprise	< 50	≤ EUR 10 million	≤ EUR 10 million
Medium enterprise	< 250	≤ EUR 50 million	≤ EUR 43 million

Enterprises exceeding these thresholds are classified as large enterprises and are generally not eligible for the protective measures discussed in this article.

Unfair Contract Terms in B2B Relationships

The General Framework Under the Ptk.

The Ptk. contains robust provisions on unfair standard contract terms (tisztességtelen általános szerződési feltételek, “ÁSZF”), which apply in both B2C and B2B contexts, though with different standards.

Standard Contract Terms (ÁSZF)

Under Ptk. Section 6:77, a contract term qualifies as a standard contract term if it was drafted in advance for use in multiple contracts and was not individually negotiated between the parties. This is the typical scenario for terms imposed by large companies on their SME suppliers, distributors, or service providers — for example, procurement terms, platform agreements, or franchise contracts.

Unfairness Test in B2B

Ptk. Section 6:102 provides that a standard contract term is unfair if it unilaterally and without justification derogates from the statutory rules applicable to the contract or from the parties’ prior agreements, to the detriment of the party who did not draft the term. In B2B contracts, the test focuses on whether the term:

• Creates a significant imbalance in the parties’ contractual rights and obligations.
• Is contrary to the requirements of good faith and fair dealing (jóhiszeműség és tisztesség).
• Was not individually negotiated — i.e., the SME had no real opportunity to influence the content of the term.

If a term is found to be unfair, it is void (semmis) — it is treated as if it never existed, and the remainder of the contract continues in force with the void term replaced by the applicable default statutory rule.

Practical Examples

Common B2B contract terms that Hungarian courts have found or could find unfair when imposed on SMEs include:

• Unilateral price modification clauses: Terms allowing one party to change the price without the other’s consent and without objective criteria.
• Excessive limitation or exclusion of liability: Clauses purporting to exclude all liability for breach, including liability for intentional or grossly negligent conduct.
• Automatic renewal with prohibitive exit terms: Contracts that automatically renew for extended periods with disproportionate early termination fees.
• Unilateral termination rights: Where only the drafting party may terminate the contract at will, while the SME is bound for the full term.
• Forum selection clauses: Clauses requiring disputes to be adjudicated exclusively at a court geographically distant from the SME’s place of business, creating a practical barrier to access to justice.

The Role of the Competition Authority (GVH)

The Hungarian Competition Authority (Gazdasági Versenyhivatal, “GVH”) has jurisdiction to investigate unfair commercial practices and, in certain cases, unfair contract terms used by dominant undertakings. Under Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices (Tpvt.), the GVH may impose fines on companies that abuse their dominant position by imposing unfair trading conditions on smaller counterparties.

While the GVH’s primary focus is on consumer protection and competition law, its actions can indirectly benefit SMEs by curbing abusive practices of dominant market players.

Late Payment: The Hungarian Implementation of the EU Late Payment Directive

The Problem of Late Payment

Late payment in commercial transactions is a persistent challenge for Hungarian SMEs. According to surveys conducted by the Hungarian Chamber of Commerce and Industry (Magyar Kereskedelmi és Iparkamara, “MKIK”), over 40% of SMEs report regularly receiving payment beyond the contractually agreed terms, and a significant proportion face payment delays exceeding 60 days.

EU Directive 2011/7/EU

The Late Payment Directive (Directive 2011/7/EU) was adopted to combat late payment in commercial transactions throughout the EU. Hungary transposed this directive primarily through provisions in the Ptk. and supplementary legislation.

Hungarian Implementation: Key Rules

Maximum Payment Terms

Under Ptk. Section 6:130, the general default payment term in B2B commercial transactions is 30 days from receipt of the invoice (or from receipt of the goods/services, if later). The parties may agree on a longer payment term, but:

• Payment terms exceeding 60 days are permissible only if the contract is individually negotiated and the term is not grossly unfair (feltűnően aránytalan) to the creditor.
• For contracts where the debtor is a public body (költségvetési szerv — government agency, municipality, etc.), the maximum payment term is 30 days, extendable to 60 days only in exceptional circumstances justified by the nature of the contract.

Late Payment Interest

If payment is not made by the due date, the creditor is entitled to late payment interest (késedelmi kamat) without the need for a prior demand. The statutory late payment interest rate in B2B transactions is the Hungarian National Bank (MNB) base rate plus 8 percentage points (as per the Ptk.’s commercial default interest provision, implementing the Directive’s mandatory minimum).

Recovery Costs

The creditor is also entitled to a flat-rate recovery fee of EUR 40 (or its HUF equivalent) for each late-paid invoice, without the need to prove actual recovery costs. Additional reasonable recovery costs (e.g., lawyer’s fees, collection agency fees) may also be claimed.

Unfair Payment Terms

A contractual term that excludes or limits the creditor’s right to late payment interest or recovery costs is presumed to be unfair and may be declared void by a court. Similarly, a payment term that is grossly unfair to the creditor — for example, a 180-day payment term imposed by a large company on a small supplier — may be challenged as unfair under the Ptk.

Platform-to-Business (P2B) Regulation

EU Regulation 2019/1150

The Platform-to-Business Regulation (Regulation (EU) 2019/1150) applies directly in Hungary and provides specific protections for SMEs that use online intermediation services (marketplaces, app stores, price comparison tools) and online search engines. Key protections include:

• Transparency of terms and conditions: Platforms must provide clear, unambiguous terms that are easily accessible to business users.
• Prior notice of changes: Platforms must give at least 15 days’ notice before implementing changes to their terms and conditions, with a longer notice period for changes that have a significant negative impact on business users.
• Restriction and suspension: Platforms must provide a clear statement of reasons when restricting, suspending, or terminating a business user’s account, and must offer an opportunity to remedy the issue before termination.
• Complaints and mediation: Platforms must establish an internal complaint-handling system and identify mediators with whom they are willing to engage in dispute resolution.

Practical Relevance for Hungarian SMEs

Many Hungarian SMEs sell through platforms such as Amazon, eBay, Booking.com, or domestic platforms like Jófogás, Marketplace, and various sector-specific intermediaries. The P2B Regulation ensures that these businesses have a minimum level of transparency and procedural fairness in their dealings with platform operators, regardless of the platform’s size or country of establishment.

Sector-Specific Protections

Agricultural Supply Chain

Hungarian SMEs in the agricultural sector benefit from additional protection under Act XCV of 2009 on the Prohibition of Unfair Distributor Practices (unfair practices in the food supply chain), which transposes Directive (EU) 2019/633 on unfair trading practices in B2B relationships in the agricultural and food supply chain. Prohibited practices include:

• Payments later than 30 days for perishable products and 60 days for non-perishable products.
• Retroactive changes to supply terms.
• Cancellation of orders at short notice for perishable goods.
• Unilateral contract modifications by the buyer.
• Commercial retaliation against suppliers who exercise their contractual or legal rights.

The National Food Chain Safety Office (NÉBIH) and the GVH jointly enforce these rules.

Franchise Relationships

While Hungary does not have a dedicated franchise law, the general Ptk. provisions on unfair contract terms, combined with competition law, provide a framework for challenging abusive terms in franchise agreements. Courts have shown a willingness to scrutinise franchise contracts for terms that are disproportionately favourable to the franchisor, particularly regarding termination rights, non-compete clauses, and fee structures.

Enforcement and Remedies

Individual Court Actions

An SME that is subject to unfair contract terms or late payment practices may bring a civil action before the competent district court (járásbíróság) or regional court (törvényszék), depending on the value of the claim. Remedies include:

• Declaration of voidness of the unfair term.
• Payment of overdue amounts with late payment interest and recovery costs.
• Damages for losses caused by the unfair term or late payment.

Collective Enforcement

Under Act CLXV of 2011 on Collective Redress (közérdekű kereset), certain organisations — including the Hungarian Chamber of Commerce and Industry, consumer protection associations, and trade associations — may bring collective actions (közérdekű kereset) to challenge unfair standard contract terms used by a company vis-à-vis a class of SME counterparties. This mechanism allows systemic unfair practices to be addressed without requiring each affected SME to initiate individual litigation.

Conclusion

While Hungarian law does not formally classify SMEs as “consumers,” a robust and growing body of legislation provides smaller businesses with meaningful protections against unfair contract terms, late payment, and abusive trading practices. These protections span the Ptk.’s general contract law, EU-derived late payment and platform regulations, and sector-specific rules for the agricultural supply chain and other sectors.

SMEs should be aware of these rights and should not hesitate to challenge contract terms or payment practices that appear unfair or disproportionate. Seeking legal advice early — ideally before signing a contract — can prevent disputes and strengthen the SME’s negotiating position.

This article is for informational purposes only and does not constitute legal advice. For advice tailored to your specific situation, please contact our office.