Contract Review Before Signing: Don’t Leave it Unread! – Lessons from Two Precedent-Setting Recent Court Rulings

Why Is a Thorough Contract Review Important? Most of us are already aware that we must read documents before signing them – but do we always follow this advice? While we often skim through terms and conditions when shopping online, employment-related documents, especially when in an employer position, are always carefully reviewed. Below, we present two recent court rulings that illustrate the serious consequences of failing to exercise proper caution.

In the first case, the employer sought to terminate an employment contract by mutual agreement and offered the employee 5,500 euros if the contract was ended jointly. The employee felt the amount was insufficient and asked the employer to send the draft agreement in writing. The employer complied and sent a bilingual draft the following day. However, the employee modified the amount from 5,500 euros to 25,500 euros, highlighting the change in bold letters. The employee returned the signed document to the employer. Without Contract Review, the employer signed it, considering the agreement with the new amount valid. Later, the employer tried to invalidate the agreement by citing deception, but the court rejected the claim, emphasizing that the employer should have been aware of the modification, as they should have read the document before signing it. The ruling also highlighted that both the employer and employee have an obligation to inform each other of the essential terms of the contract, but this does not exempt them from reviewing the contract themselves.

In the second case, due to an administrative error, the employer “gifted” nearly 1.3 million forints to a former employee. The HR manager used a sample termination agreement but failed to correct the amount left in the document, which the employee signed without Contract Review. When the employee later demanded the mistakenly listed amount, the employer cited the administrative error and tried not to pay the amount. The case was eventually brought to court, and the Supreme Court ordered the employer to pay the amount. The appellate court also emphasized that a party cannot invoke deception if they did not read the contract before signing it.

Summary Before making a court ruling, it is extremely important for both employers and employees to be aware of their contractual obligations. Reading the contract before signing it is essential to avoid future legal consequences. If the validity of the contract is not considered when terminating an employment relationship, the court’s decision can have serious consequences. Both employers and employees must adhere to their duty to inform each other and avoid the possibility of deception, which can lead to legal disputes.

The first court decision shows that both parties must read the termination agreement before signing. The employer failed to fulfill their contractual obligation by not reviewing the document containing the modified amount, thus violating the employee’s rights. According to the court’s decision, the employer should have been aware of the modification, and due to the contract’s validity, the employer could not invoke deception. The clarification of the employee’s rights and the termination agreement before signing is the responsibility of both parties.

In the second case, an administrative error caused the employer to pay an amount they should not have. The employee signed the document with the incorrect amount, and later legal disputes arose. The Supreme Court’s decision clearly stated that the employer could not cite the administrative error, and the employee had the right to demand the incorrectly listed amount. Such errors could have been avoided if both parties had carefully reviewed the contract before signing it. The legal consequences of the contract’s validity highlight the importance of the court’s role in resolving legal disputes concerning employment termination.

Employers and employees are warned that failing to read contracts can have serious consequences. Such errors could be avoided if everyone carefully reviewed the documents before signing them.

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Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)

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