The Correct Interpretation of Section 6:7(4) of the Hungarian Civil Code in the Document Review Practice of Financial Institutions Concerning Sale and Purchase Agreements
I. Statement of the Problem
In the practice of real estate sale and purchase agreements, it regularly occurs that one of the contracting parties does not understand the language in which the document was drawn up, or is unable to read. In such cases, the attorney drafting and countersigning the contract — in accordance with Section 6:7(4) of Act V of 2013 on the Civil Code (hereinafter: the Civil Code) — records in the document that he, as the attesting person, explained its contents to the declaring party. In transactions financed by bank loans, however, certain financial institutions, in the course of their document review of the sale and purchase agreement, routinely argue that the countersigning attorney does not qualify as an “attesting person” within the meaning of the law, and on this basis deem the contract formally deficient, making disbursement conditional upon the addition of the signatures of two transaction witnesses or upon the use of a notarial (public) document.
This position — as set out below on the basis of the statutory framework, the historical antecedents, the commentary literature and, above all, the case law — is erroneous. For the purposes of Section 6:7(4) of the Civil Code and Section 325(2) of Act CXXX of 2016 on the Code of Civil Procedure (hereinafter: the Code of Civil Procedure), the countersigning attorney qualifies as an attesting person, and therefore the explanatory clause recorded in the document or in the countersignature fully satisfies the statutory requirement.
II. The Statutory Framework and the Origin of the Rule
Under the first sentence of Section 6:7(4) of the Civil Code, the written legal statement of a person who cannot write or is incapable of writing is valid if it is contained in a public document or in a private document with full probative force on which the signature or mark of the declaring party is authenticated by a court or a notary public, or on which an attorney, by countersignature, or two witnesses, by their signatures, attest that the signature is the declaring party’s own, or that the party acknowledged the signature as his own. Under the second sentence, in the case of a person who cannot read, or who does not understand the language of the document, a further condition of validity is that “it must be apparent from the document itself that its contents were explained to the declaring party by one of the witnesses or by the attesting person” (Civil Code, Section 6:7(4)). Pursuant to subsection (5), invalidity on this ground may be invoked only in the interest of the person making the statement.
The expression “attesting person” is not an innovation of the Civil Code. The rule has procedural-law origins going back more than a century: Section 317 of Act I of 1911 on the Code of Civil Procedure already provided that if the maker of the document cannot read or does not understand the language of the document, it is necessary that “the witnesses present or the attesting person explain the contents of the document to the maker in a language understood by him,” and that the fact of this explanation be attested on the document or in the authentication clause. The expression was taken over with essentially unchanged content by Section 196(3) of Act III of 1952 (the former Code of Civil Procedure), and subsequently by Section 325(2) of the Code of Civil Procedure currently in force. In the course of the codification of the Civil Code, the legislature elevated this procedural rule on probative force into a substantive-law condition of validity; this was confirmed by the Curia as well, which pointed out that, according to the reasoning attached to the bill, the new substantive-law regulation followed the rules of the former Code of Civil Procedure in laying down the validity requirement (Curia, Gfv.I.30.064/2024/5., para. [42]).
Of decisive importance for the interpretation of the concept is the fact that in 1911 — and still in 1952 — the circle of “attesting” participants capable of conferring full probative force on a private document was narrower: judicial and notarial authentication of signatures, and two transaction witnesses. Attorney’s countersignature did not yet appear among the facts giving rise to full probative force; it was introduced by Section 15 of Act LXXII of 1997 as point (e) of Section 196(1) of the former Code of Civil Procedure, according to which “an attorney (legal counsel), by his duly executed countersignature of a document prepared by him, proves that the maker signed the document, not written by him, in his presence, or acknowledged the signature before him as his own handwritten signature” (Act LXXII of 1997, Section 15). Point (e) of Section 325(1) of the Code of Civil Procedure in force contains a substantively identical rule. The concept of “attesting person” is therefore not a category statically confined to the notary public, but a generic term: it denotes all those whose attesting-type participation as defined by law — apart from the witnesses — confers full probative force on a private document. Since 1997, the countersigning attorney has belonged to this circle.
III. The Attesting Character of the Attorney’s Countersignature
Sections 43–44 of Act LXXVIII of 2017 on Attorneys’ Activities (hereinafter: the Attorneys Act) regulate the countersigning of documents as an independent certifying activity of a public-trust character. Under Section 44(1) of the Attorneys Act, by his countersignature the attorney certifies, among other things, that the document complies with the law and with the declared intention of the parties, and that the parties named in the document, following their identification, signed the document in his presence, or acknowledged the signature on the document before him as their own. According to the grand commentary on the Attorneys Act, the countersigning of a document is “an activity of an attesting-office character connected to the drafting of documents, which forms a traditional part of the attorney’s profession and which guarantees a high degree of documentary security for the drafted document” (Bánáti–Baranyi (eds.): Grand Commentary on Act LXXVIII of 2017 on Attorneys’ Activities, commentary on Section 43 of the Attorneys Act). Presenting the historical development of countersignature, the commentary specifically emphasises that the legislative changes of the 1990s — above all, the requirement of a countersigned private document for registration in the land registry — brought with them the expansion of the public-trust function of the legal profession “with activities of the type performed by places of authentication (loca credibilia).”
It is not only the professional literature of the Bar, but also the commentary literature on civil procedure that expressly treats countersignature as authentication. The compact commentary on Section 325 of the Code of Civil Procedure discusses “authentication by an attorney or in-house legal counsel under point (e) of Section 325(1) of the Code of Civil Procedure” in the same line as, and in parallel with, the judicial and notarial authentication of signatures, noting that in such cases the authentication takes place in the form of a private document, and that the attorney — since he may countersign only a document prepared by himself — also bears responsibility for the contents of the document (Völcsey (ed.): Compact Commentary on Act CXXX of 2016 on the Code of Civil Procedure, commentary on Section 325, point (c)). This substantive surplus of the countersignature — the duty of identification, the certification of legality and of the concordance of the document with the parties’ intentions, and the attorney’s disciplinary and civil liability — not only does not fall short of the participation of witnesses in terms of its guarantee function, but indeed exceeds it.
Special mention should be made of the part of the grand commentary on the Attorneys Act that deals expressly with Section 6:7(4) of the Civil Code. According to this, the attorney’s countersignature in itself certifies that the signature is the party’s own, so that “the countersignature, even without any specific reference to this in its wording, satisfies the attestation required by Section 6:7(4) of the Civil Code” (Bánáti–Baranyi (eds.): op. cit., commentary on Section 43 of the Attorneys Act, point 14). For the case of a party who cannot read or does not understand the language of the document, the commentary gives unambiguous guidance: “if no witnesses appear on the countersigned document, it is the countersigning attorney, or the person acting in his stead in some phase of the countersignature, who must explain the contents of the document to such a party or his representative” (ibid.), and the fact of the explanation may be recorded either in the main text of the document or in the wording of the countersignature. The commentary thus regards the countersigning attorney himself as the person who must provide the explanation — that is, as an attesting person.
It must be emphasised that the use of transaction witnesses alongside the countersignature is not a statutory requirement. Section 6:7(4) of the Civil Code lists the forms attesting the genuineness of the signature in the alternative: the document is valid if the signature of the declaring party on it is authenticated by a court or a notary public, “or on which an attorney by countersignature or two witnesses by their signatures attest” the genuineness of the signature. The law thus sets up the attorney’s countersignature and signature before two witnesses not as forms to be cumulated, but as forms substituting for one another; the connection between them is a disjunctive “or,” not a conjunctive “and.” The same structure is reflected in Section 325(1) of the Code of Civil Procedure, where signature before two witnesses (point (b)) and the attorney’s countersignature (point (e)) are separate facts of equal rank, each independently giving rise to full probative force. Finally, the explanation requirement is likewise alternative: it may be fulfilled by “one of the witnesses or the attesting person.” On a countersigned document, therefore — on which, according to the commentary cited above, typically no witnesses appear — the explanation is given by the countersigning attorney himself as attesting person; parallel witnessing alongside the countersignature is a statutory requisite neither of full probative force nor of the explanation requirement applicable in the case of a party who does not understand the language of the document.
IV. The Case Law
The case law decides the question — although rarely in the form of an expressly formulated point of principle — consistently in accordance with the position taken here.
The clearest guidance is provided by decision of principle No. EBH2001. 431. According to the point of principle, it is a validity requirement of a private document with full probative force that the terms of the contract be explained to the illiterate party by “a person independent of the parties and disinterested in the conclusion of the transaction, one of the witnesses or the attesting person.” In the given case, the contract was read aloud to the illiterate sellers by one of the contracting parties, the buyer, which did not satisfy the requirement. At the same time, the Supreme Court — in distinguishing the case from a parallel case relied on in the petition for review — expressly recorded that in that other case “the contents of the contract were explained to the parties by the attorney who drafted the document, and thus the document satisfied the cumulative conditions required by Section 196(1) and (3) of the Code of Civil Procedure” (EBH2001. 431., Supreme Court, Pfv. IX. 22.404/2000/3.). The Supreme Court thus recognised the explanation given by the document-drafting attorney as participation satisfying the statutory condition; the decisive criterion is not notarial status, but independence from the parties and disinterestedness in the transaction.
The same interpretation is reflected in judgment No. Pfv.VI.21.819/2009/3. of the Supreme Court. In that case, clause 16 of a contract granting a purchase option, prepared and countersigned by an attorney and signed also by a usufructuary incapable of reading, stated that the contents of the contract had been explained to the parties by the acting attorney. The court of second instance denied the full probative force of the document on account of the countersigning attorney’s interest in the transaction (his marriage to one of the contracting parties) — that is, not because an attorney could not be an attesting person, but because the particular attorney was not disinterested. The Supreme Court went even further: it held that the contract granting the purchase option qualified as a private document with full probative force, and decided the dispute on the plane of counter-evidence — by examining whether the explanation had in fact taken place, extending also to the statement of waiver. The tacit but unequivocal premise of the judgment is that the explanation by the countersigning attorney recorded in the document formally satisfies the requirement of Section 196(3) of the former Code of Civil Procedure.
The question was also addressed, in the application of the Civil Code currently in force, by judgment No. 1.G.40.094/2020/19. of the Zalaegerszeg Regional Court. In that case, a buyer represented by a managing director who did not understand Hungarian concluded a Hungarian-language real estate sale and purchase agreement countersigned by an attorney, without the use of witnesses. Interpreting Section 6:7(4) of the Civil Code, the regional court held: since the contract was countersigned by an attorney, “the attorney countersigning the document is to be regarded as the attesting person,” and therefore, for the sake of validity — in the absence of witnesses — the document should have stated that the countersigning attorney, as attesting person, had explained the contents of the document to the buyer’s managing director (1.G.40.094/2020/19., para. [25]). The court thus found the contract formally invalid not because an attorney could not be an attesting person, but proceeding precisely from the premise that the countersigning attorney is the attesting person, whose explanation the document should have attested — this, however, was missing from the contract in question, and, in the court’s view, this strict formal requirement was not satisfied by recording that the parties had jointly interpreted the contract in their mother tongue and that a Russian translation had been available to them. The Pécs Regional Court of Appeal, in its judgment No. Gf.V.40.025/2021/4., agreed with the first-instance court’s decision on the merits and with its legal reasoning, recording that what matters is not whether the person making the legal statement knows the contents of the contract, but whether the contract complies with the formal requirement under Section 6:7(4) of the Civil Code (Gf.V.40.025/2021/4., para. [15]). These decisions confirm the thesis of this article in the most direct manner possible: the case law expressly designates the countersigning attorney as the attesting person.
V. Refutation of the Financial Institutions’ Position
The banks’ argument — according to which only a notary public (or possibly a judge) can be an attesting person — is untenable for several reasons in the light of the foregoing.
First: it is contrary to grammatical and systematic interpretation. The first sentence of Section 6:7(4) of the Civil Code names three private-document forms of equal rank: judicial or notarial authentication of the signature, the attorney’s countersignature, and signature before two witnesses. The phrase “one of the witnesses or the attesting person” in the second sentence corresponds to these three forms: in the case of a witnessed document, one of the witnesses gives the explanation; in the case of a document made with attesting participation — including a countersigned document — the given attesting participant does so. The restrictive interpretation would lead to the result that the countersigned document form expressly permitted in the first sentence could never, by itself, satisfy the condition of the second sentence — a result manifestly contrary to the legislature’s intention and devoid of sense. Purposive interpretation under Article 28 of the Fundamental Law — invoked by the Curia also in the context of interpreting Section 6:7(4) of the Civil Code (Curia, Gfv.VII.30.404/2022/6.) — supports the same conclusion: the purpose of the rule is that the party in a vulnerable position should learn the contents of the contract from a person independent of him and of the other party, disinterested, and bearing legal responsibility. The countersigning attorney fully satisfies this purpose.
Second: the banks’ position loses sight of the legal nature of the countersignature. The countersignature is an attesting act under point (e) of Section 325(1) of the Code of Civil Procedure, giving rise to full probative force, which the procedural commentary literature expressly discusses as “authentication by an attorney or in-house legal counsel,” and which the commentary on the Attorneys Act qualifies as an activity of the character of places of authentication. The countersigning attorney participates subject to requirements considerably stricter than those applying to witnesses — the duty of identification, certification of legality, supervision by the Bar, and disciplinary and civil liability. The banks’ interpretation therefore offends against the logical-interpretative principle of a minori ad maius: if the explanation of a transaction witness offering fewer guarantees — against whom the law imposes no additional requirement of professional qualification or liability — satisfies the statute, then the same must apply all the more to the explanation of the countersigning attorney, who acts under stricter conditions and with enhanced liability. There is no interpretative consideration that could justify reversing this conclusion.
Third: the case law has settled the question. Decision of principle No. EBH2001. 431. recognised the explanation of the document-drafting attorney as satisfying the statutory conditions; judgment No. Pfv.VI.21.819/2009/3. qualified the countersigned document containing the clause “the acting attorney explained” as a private document with full probative force; and the judgment of the Zalaegerszeg Regional Court No. 1.G.40.094/2020/19. — upheld by the Pécs Regional Court of Appeal in its judgment No. Gf.V.40.025/2021/4. — expressly held, in the application of the Civil Code in force, that in the absence of witnesses the attorney countersigning the document is to be regarded as the attesting person. The sole additional requirement imposed by the case law on the person giving the explanation is independence from the parties and disinterestedness in the transaction, which the countersigning attorney acting in due course — by virtue of the conflict-of-interest rules — satisfies by definition.
VI. Conclusions
The countersigning attorney is an attesting person for the purposes of Section 6:7(4) of the Civil Code and Section 325(2) of the Code of Civil Procedure. This follows from the content of the concept of “attesting person” reaching back to Section 317 of Act I of 1911 and adapting to the circle of attesting participants as it stands from time to time; from the elevation of the attorney’s countersignature, by Act LXXII of 1997, among the facts giving rise to full probative force; from the provisions of Sections 43–44 of the Attorneys Act regulating countersignature as certification of a public-trust, attesting-office character; from the unanimous position of the commentary literature; and from the case law, which is uniform from the Supreme Court’s decision of principle to the judgments rendered under the Civil Code in force that expressly designate the countersigning attorney as the attesting person. The practice of financial institutions that treats the explanatory clause recorded in the document by the countersigning attorney as a formal deficiency lacks any statutory basis, and unjustifiably burdens the parties with additional costs — notarial proceedings or the unnecessary use of witnesses.
At the same time, the stricter legal consequence under the Civil Code in force enhances the importance of diligence in document drafting: according to the published practice of the Curia, breach of the formal conditions specified in Section 6:7(4) of the Civil Code now results in the invalidity of the contract, and the requirement of explanation is not satisfied by such general formulas as the statement that the parties signed the document “after reading and interpreting it” (Curia, Pfv.VI.20.113/2021/6., Gfv.VII.30.404/2022/6.); it is likewise insufficient to record that the parties jointly interpreted the contract in their mother tongue (Zalaegerszeg Regional Court, 1.G.40.094/2020/19.). For practice, the conclusion therefore follows that, in the case of an affected party, the clause should expressly record — in the main text of the document or in the countersignature, following the wording of the statute — that the contents of the document were explained to the declaring party by the countersigning attorney as attesting person, where necessary in a language understood by that party. A document so drafted satisfies both the requirement of substantive-law validity and that of full probative force; there is no lawful ground for its rejection by a bank.
Sources: Act V of 2013, Section 6:7; Act CXXX of 2016, Sections 325–326; Act III of 1952, Section 196; Act I of 1911, Section 317; Act LXXII of 1997, Section 15; Act LXXVIII of 2017, Sections 43–44; Vékás–Gárdos (eds.): Grand Commentary on Act V of 2013 on the Civil Code (Section 6:7); Bánáti–Baranyi (eds.): Grand Commentary on Act LXXVIII of 2017 on Attorneys’ Activities (Sections 43–44); Wopera (ed.): Grand Commentary on Act CXXX of 2016 on the Code of Civil Procedure (Section 325); Völcsey (ed.): Compact Commentary on Act CXXX of 2016 on the Code of Civil Procedure (Section 325); Kiss–Németh (eds.): Grand Commentary on Act III of 1952 on the Code of Civil Procedure (Section 196); EBH2001. 431.; BH1992. 241.; Supreme Court Pfv.VI.21.819/2009/3.; Supreme Court Pfv.VI.21.817/2008.; Curia Pfv.VI.20.113/2021/6.; Curia Gfv.VII.30.404/2022/6.; Curia Gfv.I.30.064/2024/5.; Zalaegerszeg Regional Court 1.G.40.094/2020/19.; Pécs Regional Court of Appeal Gf.V.40.025/2021/4.
