1.  In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:
    1. a. Is the supplier permitted to unilaterally increase prices (or does it have other rights regarding price increases)? If so, to what extent?
    2. b. Do (extreme) price increases give the customer the right to terminate the agreement? If so, are there any specific rules or regulations to comply with?
  2.  In respect of future B2B agreements:
    1. a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?
    2. b. What legal issues need to be considered (if any) to ensure that the price adjustment clause is enforceable? Is there any key legislation or case law that parties should be aware of regarding enforceability of price adjustment clauses in your jurisdiction?
    3. c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?
  3.  Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?

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Hungary
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1. In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:

a. Is the supplier permitted to unilaterally increase prices (or does it have other rights regarding price increases)? If so, to what extent?

Under Hungarian law, if the agreement itself does not contain any possibility for price adjustment, none of the parties are permitted to unilaterally increase prices. In this case, the agreement can only be amended by the mutual consent of the parties.  

b. Do (extreme) price increases give the customer the right to terminate the agreement? If so, are there any specific rules or regulations to comply with?

As specified above, the seller is not entitled to unilaterally increase prices, unless such right is expressly stipulated in the agreement. Therefore, a price increase (whether extreme or not) cannot occur without the consent of the other party and the scenario in the question does not happen. Moreover, should the seller wish to enforce a unilateral price increase, the customer can claim performance with the original terms of the agreement.   

We note that under Hungarian law changes in market conditions (including raw material price increases) also do not entitle the seller to increase prices unilaterally, as such changes are deemed to be within the business risk of the seller. 

2. In respect of future B2B agreements:

a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?

Yes, it is possible under the parties' freedom of contract. 

In practice, these clauses usually provide for a price increase based on specific factors such as inflation, changes in market conditions, or increases in production costs. In these cases, it is important to clearly define the exact formula for calculating the price adjustment in the agreement. 

It is also common to insert a renegotiation clause in the agreement, which allows the parties to renegotiate the price if certain events or conditions occur. For example, if there is a significant change in the market conditions or a force majeure event occurs that affects the production costs of the goods or services being provided. 

In practice the implementation of an indexation clause can be also seen, which links the contract price to a specific index, such as a consumer price index or a specific commodity price index. Indexation is a method of value tracking under which the price can be unilaterally adjusted by a specified amount without a written amendment to the agreement.  

In the case of including a unilateral price increase right in an agreement, it is advisable to specify the required time of prior notice of the intention to amend.

There is no specific provision on this matter in the commercial practice, the general rules of civil law shall apply. 

c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?

There is no specific provision on this matter in Hungarian legislation, the general rules of civil law shall apply, with the exception of the public procurement sector, where specific rules apply to price changes. 

For public sector contracts, there are special requirements for price adjustments due to raw material price increases. Please refer to our CMS Expert Guide on rising raw material prices.

3. Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?

Yes. Under Hungarian law, in B2C agreements the contract term shall, in particular, be considered unfair, until proven otherwise, if its object or effect is to enable a business party to alter contract terms unilaterally without a valid reason which is specified in the contract, in particular to increase the monetary consideration fixed in the agreement, or to allow the business party to alter unilaterally the terms of an agreement where there are serious grounds laid down in the agreement for doing so, provided that in such cases the consumer is not free to withdraw from or to terminate the agreement. Therefore, it is essential for the business party to be able to prove the valid reason for the amendment and provide the right to withdraw for the customer in such cases.