Hungarian Economic Law L1

• The lecture covers Hungarian Economic Law, Lecture 1
• The lecturer is Dr. Erika Fülöp Szilágyi, a university docent, reachable via [email protected]

Mandatory and Recommended Materials

• Mandatory material includes lecture materials available at https://elearning.uni-miskolc.hu/zart/linken
• Recommended readings include:
  • Tamás Sárközy (ed.), Civil Law/ Legal Entity, HVG-ORAC Könyvkiadó Kft, Bp. 2013
  • Edit Kriston, Edit Sápi, Gergő Tóth, Basic Knowledge of Civil Law, Novotni kiadó, Miskolc 2016

Semester Requirements and Exam

• The semester includes writing two midterm papers
• Obtaining a signature requires scoring at least a sufficient level (min. 60%) on the midterm papers
• The exam format is a colloquium (written and oral) with the following grading scale:
• Fail: below 60%
• Sufficient: 60%-70%
• Medium: 70%-80%
• Good: 80%-90%
• Excellent: 90%-100%

Lecture Topics

• The course covers introduction, requirements, theoretical foundations including:
  • the concept and classification of jurisprudence
  • its main areas (public and private law)
  • the concept, formation, and evolution of the state and law
  • legal relationships, subjects, and objects
• Also covered are natural persons, legal capacity, capacity to act, civil law principles, and characteristics of legal relationships
• Further topics include copyright and industrial property protection, as well as family and inheritance law regulations
• The course will examine the concept, subjects, and objects of obligations, the creation, invalidity, and termination of contracts, and contract security
• The course will address the role and types of contracts
• The 1st midterm paper will be on March 6
• The economic role and function of small and medium-sized enterprises
  • legislation affecting their management and operations
  • principles of company law
  • legal requirements for establishing businesses, including essentials for company registration will also be explored.
• Shared regulations for companies plus characteristics and conditions for individual enterprises will also be addressed
• Forms, establishment, internal and external legal relations of limited partnerships and general partnerships
• Features of limited liability companies, corporations, cooperatives including establishment, organization and operation.
• Legal background of public benefit organizations and company termination rules.
• The 2nd midterm paper will be on April 17
• Other important dates:
  • Rector's Holiday April 24
  • Rector's Holiday May 1
  • Resit Midterm May 15
  • Preliminary Exam May 22

Midterm Schedule

• March 6, April 17
  • 14:00-14:30: Agárdy Norbert to Haszon Máté
  • 14:40-15:10: Hevér Laura to Ocsenás Lilla
  • 15:20-15:50: Ónodi Eszter to Zsíros Bálint

Characteristics of Ancient Societies

• Ancient societies existed around 40,000 years ago
• They were characterized by:
  • Gathering, fishing, and hunting (hunter-gatherer societies)
  • The emergence of agriculture and animal husbandry (producing communities)
  • Communities based on territorial groups developed into families
  • Clans, sibling clans, tribes, and tribal alliances connected through perceived or real kinship

Development of State and Law

• In ancient societies, norms and sanctions were imprecise, not widely known, and strongly particularistic
• Law emerged as a societal necessity, providing more effective protection through law and the state

The Asian Path of State and Legal Development

• Land held under communal ownership
• Close integration of religion and normative systems
• Exceptional power of the ecclesiastical aristocracy
• Village communities produced for their own needs, with surplus taxed by the state
  • This communal form evolved into urban communities
  • Official and religious aristocracy held decisive power, with rulers considered divine
  • A stratum of slaves appeared

Key Features of Ancient State Development

• Difficult topographical conditions for farming
• Developed monetary economy and trade (maritime navigation)
• Land predominantly under communal ownership
• Social differentiation within the aristocracy
• State headed by a king
• Societies organized territorially
• Emergence of a public authority separate from the populace
• Abolition of debt slavery
• Constant conquering wars led to military dictatorship

Germanic Path of State and Law Development (Feudal State)

• Four phases of feudal state development include:
  • Early feudal state
  • State of feudal disintegration
  • Representative monarchy
  • Absolute monarchy

Characteristics of Modern States and Law

• Complete separation of economy and politics, civil society, and the political state
• Social class was not determined by origin, but rather by economic differences
• Separation of public life (political, official) and private life (religious, family, cultural), as well as public and private law
• Development of a specific state apparatus, the bureaucracy, staffed by salaried, skilled, hierarchically organized, full-time officials

Law, Legal Systems, Branches of Law

• Law is a set of mandatory rules of conduct created by state authorities, generally binding, whose enforcement is guaranteed by the state through coercion and sanctions
• A legal system is the entirety of legal rules in a state
• Within legal systems are branches of law, classified as:
  • Public law: constitutional, administrative, criminal, criminal procedure, enforcement, financial, and international law
  • Private law: civil, family, labor, agricultural, international private law and civil law
• The Hungarian Parliament passed the Civil Code on February 11, 2013, effective from March 15, 2014

Principles of Civil Law

• Subordination and equality
• Protection of autonomous scope of movement
• Reasonableness, fairness, and legal certainty
• Interpretation
• Good faith and honesty
• Subjective right: the principle of due exercise of rights
• Cooperation
• Expected conduct

Branches of Law

• Constitutional law regulates a state's constitutional order, form of government, main state bodies, and their operations
  • It defines Hungarian citizenship, the legal status of foreigners, and the electoral system
• Administrative law covers the legal material of central state bodies and local governments, regulating their operation, organization, tasks, and forms of operation
• Criminal law includes socially dangerous acts by citizens, defining specific punishments and their measures
• Criminal procedure law governs procedures related to the application of criminal law rules
• Enforcement law contains the rights and obligations of detainees during the enforcement of sentences
• Financial law regulates the bodies, functions, and operating principles of the financial system, including the central budget and types of taxes
• Civil law includes the law of persons, rules on personal status, ownership and possession, principles of damages, rules of contracting and specific contracts, family, inheritance, company, and copyright law
• Civil procedure law encompasses the procedures for handling civil cases, including jurisdiction, competence, and rights and obligations of legal entities
• Agricultural law covers regulations on land ownership and land use
• Labour law regulates the rules of employment

Major Legal Systems

• Common law (precedent-based) system:
  • Decisions in previous cases are significant and considered legal sources (precedent law)
  • Participation of juries is typical
• Continental (codified) legal system:
  • Judgments are made by professional judges, not juries
  • Judicial practice has importance, but is less significant compared to common law systems and courts are not bound by previous decisions
• Socialist legal system:
  • Formerly used in Soviet republics and Eastern European socialist countries
  • Still characteristic in China, Cuba, and North Korea
  • Since the late 1980s, these systems converged with continental systems through harmonization, enabling EU accession for several states from May 1, 2004
• Religious-based legal systems:
  • Heterogeneous family of laws that arise from the interaction of pre-capitalist and modern systems
  • Based on religious and traditional norms, e.g., Muslim law, Chinese legal system

Elements of Legal Relationships

• Generally, legal relationships consist of rights and obligations pertaining to individuals
  • Civil law regulates personal (related to the legal capacity of individuals and protection of personal rights) and property (tangible, contractual, and inheritance) relationships
• Characteristics of Legal Relationships

Subjects of Legal Relationships

• Natural persons
• Legal persons
• Entities with partial legal capacity but lacking full legal personality e.g., condominiums
• Criteria for Legal Person Status:
  • Socially recognized purpose
  • Necessary and suitable organization, representation, and assets
  • Independent material liability relative to assets
  • Operation under its own name and registered address
  • Registration as a legal entity by the state or authorized organization

Natural Persons

• Legal Capacity: the ability of an individual to be the subject of civil law relationships, possessing rights and obligations
  • Begins at conception if born alive
  • Ends with death (declaration of death or legal finding of death)
• Capacity to Act: the ability of an individual to acquire rights and undertake obligations through their own volition
  • Levels of Capacity to Act:
    • Fully Capable: individuals 18 years or older not under guardianship affecting their capacity to act, and who possess the necessary judgment to manage their affairs
    • Partially Capable: minors who have completed their 14th year and are not incapable, or adults whose capacity to act is partially limited by a court-ordered guardianship
      • Individuals need sufficient judgment for their affairs
      • Those with significantly reduced judgment due to mental disorder, either permanently or periodically, where guardianship is justified for specified matters
    • Incapable: minors under 14 years of age
      • Adults placed under total guardianship due to a mental disorder that permanently and completely prevents them from possessing the necessary judgment.
• Capacity for Judgment is the ability to understand the consequences of one's actions
• Capacity for Tort is relevant in cases of damage, when the mental development of the person causing harm is such that they can be held responsible, understanding the harmful consequences of their behavior

Methods of Law Creation

• Customary law:
  • Prevalent in slave-holding and feudal systems
  • Arises from repeated conduct within a society
• Customs become law when state bodies reference established and ingrained societal norms in their law enforcement activities
  • This reinforcement and state-ensured enforcement leads to customary law
• Judicial Law is legal principles established by court decisions
  • Less influential in continental (Roman-Germanic) systems, it appears in interpretations of the law
  • Written laws limit judicial law-making authority
  • Predominant in common law systems, where judges develop and apply legal rules
• Legislative Law (State Legislation) is the law-making process by state bodies
  • Dominant since the 19th century in continental systems, with states creating written constitutions and codes
  • State agencies create the law and are tasked with enforcing it.
  • State entities can only act within legal authorization, while citizens can do anything not explicitly prohibited by law.

System of Legal Sources

• Legal source can refer to:
  • The creator of the law and their authority (internal/material source)- WHO?
  • The legal rules and regulations created (external/formal source)- WHAT form?
• Laws must:
  • Comply with substantive and formal requirements from the Fundamental Law
  • Fit into the legal system's unity
  • Meet international and European Union law obligations
• The Fundamental Law and Laws are binding on everyone

Legal Norm Hierarchy

• Fundamental Law is the highest level legal norm and no other legal regulation can contradict it
  • Officially named Hungary's Fundamental Law, adopted April 25, 2011, effective January 1, 2012
  • It defines the state's structure, government form, main state bodies (Parliament, Government, President, Constitutional Court), principles of state organization, and fundamental human rights
  • The Parliament adopts it with a 2/3 majority vote
  • Constitutional Court is its legal authority
• Laws are created by Hungarian Parliament
• Resolutions are distinguished by the required majority:
  • Fundamental Laws require a 2/3 majority, while ordinary laws require a simple majority
  • Laws are of equal rank within the legal order
• Törvényerejű rendeletek or Decree-Laws are no longer created.
  • Previously issued by the Presidential Council of the People's Republic, before the system change.
  • Existing decree-laws remain valid if they meet modern standards
  • They are positioned alongside legislative statutes in the hierarchy
• Decrees can be issued by several different bodies:
  • Government decrees
  • Decrees by members of the government
  • Decrees by the president of the Hungarian National Bank
  • Local government decrees

Characteristics of Legal Sources

• Validity requires:
  • Proper promulgation (publication in an official gazette)
  • Substantive and formal integrity
  • Substantive Integrity: the law does not contradict superior laws in the hierarchy
  • Formal Integrity: the law was created and promulgated by the appropriate body following procedural rules
• Effect defines how the law must be applied and includes:
  • Personal effect determines who the law applies to
    • Usually natural persons, legal entities, organizations without legal personality within Hungary, and Hungarian citizens abroad.
  • Time effect dictates what time period a law should be applied
    • Effective date:
      • Defined by a period e.g., 30 days after publication
      • It can be conditional e.g., the date of Hungary's EU accession
      • Or it will be a specific date: e.g. September 19, 2023)
• Territorial Effect indicates the area in which it is applicable
  • Can refer to the location of legal consequences, or the location the event took place
  • Laws generally apply to the territory of Hungary, while local government decrees apply to the administrative area within that local government’s jurisdiction
• Subject-matter effect specifies what types of events the law applies to.
• Laws cannot retroactively impose obligations, unless they improve a situation
• Laws must be made available long enough in advance to allow for adjustment
• Laws only take effect if they are officially published in an official gazette
  • Hungary's official gazette is the Magyar Közlöny
  • Publication is required for validity and to inform those affected
  • The president of the republic ensures the publication of laws