Hungary: Signing and representation rights I

The Supreme Court of Hungary recently put an end to a long debate amongst legal practitioners and academia. In its decision No. 1/2021 PJE, the court confirmed that an agreement cannot be considered null and void only because it was signed on the basis of a power of attorney by:

• an authorized representative of a company having joint signing and representation rights who was given the power of attorney by another authorized representative of the same company also having joint signing and representation right; or
• a person who was authorized by two authorized representatives of a company having joint signing and representation rights.

Although the court decision is based on the provisions of previous versions of the Hungarian Civil Code and Hungarian Banking Act, its conclusions in this case will be applicable to future cases.

For readers who speak Hungarian, the decision is available here.