Professional research: the legal nature of the entrusted construction contract and the subject of payment responsibility
【Zhuhai lawyer, Zhuhai legal consultation, Zhuhai law firm, Jingshi law firm, Jingshi Zhuhai law firm】
Author: Tian Jiale
First, the entrusted construction system was generated
The agency system first originated from the construction manager system (CM system) in the United States, which refers to the project management model in which the construction manager is entrusted by the owner to be responsible for the whole process management of the project, and then collects the management fee for the construction agency. The entrusted construction system first appeared in the "Decision of the State Council on the Reform of the Investment System" (Guo Fa [2004] No. 20) document, which proposed that in order to improve the government investment system and standardize the government investment behavior, the implementation of the "agency system" should be accelerated for non-operating government investment projects, that is, through bidding and other means, a professional project management unit should be selected to be responsible for the construction and implementation, and the project investment, quality and construction period should be strictly controlled, and the project should be handed over to the user after completion and acceptance.
In practice, there are many disputes in the settlement of disputes over entrusted construction contracts due to the characteristics of entrusted construction projects, such as the fact that they often involve multiple parties, complex legal relationships, and difficult to clarify the boundaries of rights and obligations, as well as the lack of sound existing relevant laws and regulations.
2. The legal nature of the entrusted construction contract
Since the Civil Code does not yet stipulate the entrustment contract as a typical contract, there are many controversies in the characterization of such contract disputes in practice.
(1) The entrusted construction contract is a real estate development and operation contract
According to this view, in the Provisions on Civil Causes of Action, "entrustment contract disputes" is a secondary cause of action for "real estate development and operation contract disputes", rather than entrustment contract disputes.
Supporting Case 1: In the (2021) Zui Gao Fa Min Shen No. 1212 Civil Ruling, the Supreme People's Court held that: "According to the provisions of the Entrusted Renovation Contract and the Supplementary Agreement involved in the case, the Sericulture Station, as the construction party, provided land and construction funds, entrusted Lichengdong Company, which has development qualifications, to build houses on behalf of it, carry out relevant construction activities on its behalf, and pay it a remuneration. Therefore, the contract involved in the case has the nature of real estate development and operation, which is different from the general entrustment contract, and if the sericulture station is allowed to arbitrarily terminate the contract, it will affect the transaction order and safety of the entire project involved in the case, and the second-instance judgment held that the provisions of Article 410 of the original Contract Law of the People's Republic of China did not apply to this case, and it was not improper. ”
Supporting Case 2: In the (2022) Shaanxi Min Zhong No. 229 Civil Judgment, the Shaanxi Provincial High People's Court held that: "From the perspective of the arrangement system of civil causes of action, in the Provisions of the Supreme People's Court on the Causes of Action in Civil Cases, the dispute over the entrusted construction contract is the fourth-level cause of action under the real estate development and operation contract dispute, and the entrustment contract dispute and the real estate development and operation contract are listed as the third-level cause of action under the contract dispute. Therefore, although the agent construction party is also entrusted by the construction party to carry out the project construction act in the entrusted construction relationship, the nature of the civil legal relationship involved in the entrusted construction contract and the entrusted contract is not the same, and the general provisions of the entrusted contract should not be directly applied to the entrusted construction contract. ”
(2) The essence of the entrusted construction contract is an entrustment contract
According to this view, according to Article 919 of the Civil Code, "an entrustment contract is a contract in which the principal and the trustee agree that the trustee will handle the affairs of the principal." "The salient feature of the agency construction of the project is that the construction unit does not personally participate in the project construction management, but entrusts the construction agent to perform the management responsibilities of the project construction, so the entrusted construction contract obviously has the legal characteristics of the entrustment contract in actual operation.
Supporting Case: In the (2020) Zui Gao Fa Min Zhong No. 848 Civil Judgment, the Supreme People's Court held that: "Shenhua Company and Longrun Company signed an entrustment agreement on behalf of the company, Shenhua Company is the entrusting party, Longrun Company is the agent construction party, and Longrun Company, as the agent construction party, discloses the client's information to Wuye Company, and in accordance with Article 403 of the Contract Law of the People's Republic of China, Wuye Company can choose the agent construction party or the entrusting party as the counterparty to claim its rights." Moreover, the four contracts actually performed in this case all stipulated that Longrun Company would pay the project money to Wuye Company, and in the actual performance, Longrun Company would also pay the progress payment to Wuye Company. ”
In practice, there are other viewpoints, such as the theory of anonymous contract, the theory of contract relationship, and the theory of mixed contract relationship, which are not listed here.
3. Determination of the entity responsible for the payment of the entrusted construction project
Regarding the identification of the payment subject of the entrusted construction project, the controversial views in current judicial practice are as follows:
(1) According to the principle of relativity of the construction contract, the construction agency shall be solely responsible for paying the project price to the contractor, and the entrusting party shall not be liable.
Supporting Case: In the (2022) Shaanxi Min Zhong No. 253 Civil Judgment, the Shaanxi Provincial High People's Court held that: " The contract between the Second Construction Group and Xi'an Construction General Manager did not bind Xi'an High School, but the agreement on the rights and obligations of the Second Construction Group and Xi'an Construction Group, and the object of the binding was the Second Construction Group and Xi'an Construction General Manager, and there was no evidence in this case to prove that Xi'an High School paid the project money to Xi'an Construction General School or promised to pay the project price, so it should be determined that the relationship between Xi'an High School and the Second Construction Group was an entrustment contract relationship, and the relationship between the Second Construction Group and Xi'an Construction Group was a construction project construction contract relationship. The Second Construction Group only relied on the fact that Xi'an High School stamped and confirmed a small number of documents, that it asserted that Xi'an High School was the employer, and that it was the anonymous agent in the legal relationship of entrustment and agency, that is, that Xi'an High School should bear the obligation to pay the project money to Xi'an Construction General Manager, which was not supported because of insufficient basis. ”
(2) The contractor may claim the project payment for either the construction unit or the construction agency of any choice.
Supporting Case: In the (2021) Shaanxi Min Zhong No. 949 Civil Judgment, the Shaanxi Provincial High People's Court held that: "Hancheng Chengtou and Zanthoxylum Industry Co., Ltd. signed the "Hancheng Zanthoxylum Industrial Park Construction Project (Phase I) Entrustment Contract" and "Hancheng Zanthoxylum Industrial Park Construction Project (Phase II) Entrustment Contract", the construction unit of the construction project of Hancheng Zanthoxylum Industrial Park is Hancheng Chengtou, and Zanthoxylum Industrial Company is responsible for all construction management as the trustee, and the two parties are in an entrustment relationship. After accepting the entrustment, the pepper industry company entered into a construction contract with the aerospace company in its own name within the scope of the authorization of Hancheng Urban Investment. During the construction process, the project money was transferred from Hancheng Chengtou to the Sichuan Pepper Industry Company and paid in full to the plaintiff Aerospace Company, and the Sichuan Pepper Industry Company did not pay the project money with its own property. At the same time, Hancheng Chengtou also entrusted a third party to carry out the final accounts for the completion of the project involved in the case, and after Hancheng Chengtou was unable to pay the project money to the aerospace company due to the reasons of Hancheng Chengtou, the pepper industry company provided the aerospace company with the Han Jiao Tou Zi [2019] No. 3 "Hancheng Pepper Industrial Park Investment and Construction Co., Ltd.'s Request for Settlement of the Project Fee of the National Hancheng Pepper Industrial Park". Paragraph 2 of Article 403 of the Contract Law of the People's Republic of China stipulates that: "If the Trustee fails to perform its obligations to a third party due to reasons attributable to the Principal, the Trustee shall disclose the Principal to the third party, and the third party may therefore choose the Trustee or the Principal as the counterparty to assert its rights, but the third party shall not change the selected counterparty." Therefore, the plaintiff aerospace company has the right to choose to claim rights against the defendant Hancheng Chengtou or the third party Huajiao Industry Company, and the plaintiff aerospace company's choice to claim rights against the defendant Hancheng Chengtou is in accordance with the law, and the defendant Hancheng Chengtou should be liable for the unpaid project money and liquidated damages. ”
(3) The entrusting party and the construction agent shall be jointly and severally liable for the payment of the project money
According to this view, according to the provisions of Articles 925 and 926 of the Civil Code, when the construction party signs a contract with the construction agent, if it is aware of the principal-agent relationship between the entrusting party and the construction agent, the contract constitutes indirect agency or anonymous agency, and it is also legally binding on the entrusting party. At the same time, the entrusting party is also the bearer of the rights and obligations of the EPC contract, and should also be liable in the factual state.
(4) Current mainstream views
The Sixth Circuit Court of the Supreme People's Court, in the Adjudication Rules of the Sixth Circuit Court of the Supreme People's Court, answered the question of "how to determine the subject of payment responsibility for the entrusted construction relationship". The views of the Sixth Circuit are mainly reflected in the following aspects:
1. If the entrusted construction mode is adopted for project development and construction, under normal circumstances, the payment subject of the project payment shall be determined according to the agreement of the construction contract. The internal agreement of the client (construction unit), the agent builder and the user in the agency construction contract on the obligor of the project price payment shall not be binding on the contractor unless the contractor agrees.
2. If there is no agreement on the payment of the project price in the legal relationship of the construction agent, and the client (construction unit), the agent builder and the user jointly sign the construction project contract with the contractor as the employer, the client (construction unit), the agent builder, If the client (construction unit) or the user pays part or all of the project price to the contractor, but the agent fails to pay the corresponding project price to the contractor, the client (construction unit) or the user cannot be exempted from the payment liability.
3. Even if the client (construction unit) or the user does not sign a construction project contract with the contractor as the contract issuer, if the client (construction unit) or the user actually intervenes in the performance of the construction contract, such as: directly paying the project price to the contractor, changing the construction plan or increasing or decreasing the project quantity, and directly instructing the contractor, participating in the construction site management, etc., the client (construction unit) or the user and the construction agent shall jointly bear the obligation to pay the project price.
4. Where a construction contract is concluded between the agent builder and the contractor in its own name and within the scope of the client's authorization, and the contractor is aware of the agency construction relationship between the agent builder and the client at the time of conclusion of the contract, the construction contract shall directly bind the client and the contractor in accordance with the provisions of Article 925 of the Civil Code, unless there is conclusive evidence to prove that the contract only binds the agent builder and the contractor.
5. The contractor has the right to file a subrogation lawsuit. If the contractor believes that the contractor's negligence in exercising the creditor's right affects its claim for the due project price, and initiates a subrogation lawsuit in accordance with Article 535 of the Civil Code, the people's court shall accept it and make a corresponding judgment after ascertaining the facts of the relevant case.
To sum up, according to the Q&A opinions of the Sixth Circuit Court of the Supreme People's Court, at present, in the handling of disputes over entrusted construction contracts, it is more inclined to protect the interests of the contractor, and the contractor can directly invoke the relevant legal provisions of the entrustment agency to claim the project payment from the entrusting party if certain conditions are met.
Lawyer Profile
Lawyer Tian Jiale
Jingshi lawyer
Areas of expertise: civil and commercial contract dispute resolution, special legal services for construction projects and real estate, perennial legal counsel services for individuals/enterprises