Guiding Opinions on Issues Concerning the Application of Law in the Trial of Cases of Disputes over Construction Contracts

Guiding Opinions of the Anhui Provincial High People's Court on Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Construction Contracts

Issuing Authority: Anhui Provincial High People's Court

Date of issue: 2009-05-04

In order to correctly hear construction contract dispute cases, these Opinions are formulated in accordance with the provisions of laws and judicial interpretations such as the General Principles of the Civil Law of the People's Republic of China, the Contract Law of the People's Republic of China, the Bidding and Bidding Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China, and the Interpretation of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Construction Contract Dispute Cases, and in light of the actual civil trial conditions in this province.

1. Determination of the subject of litigation for construction contract disputes

1. In the event of a dispute arising from subcontracting or subcontracting of a construction project, and the actual constructor sues the contractor for the project payment, the employer shall generally not be added as a party to the case, but the people's court may add the employer as a third party in order to ascertain the facts of the case.

In the event of a dispute over the quality of a construction project, where the employer sues only the contractor or only the actual constructor, the people's court may, upon the application of the parties, add the actual constructor or the contractor as co-defendants.

2. If the actual constructor signs a construction contract in the name of the affiliated unit, and the actual constructor or the affiliated unit sues the employer separately for the project payment, the employer may apply to the people's court to add the affiliated unit or the actual constructor as a party to the case; Where the employer sues the actual contractor or the affiliated unit, the people's court may, upon the application of the affiliated unit or the actual contractor, add the affiliated unit or the actual contractor as a party to the case.

3. The unregistered engineering project department is not a qualified subject of litigation, and the legal person or branch of the legal person who established the project department shall be the party.

2. Determination of the validity of the construction contract of the construction project

4. If the following circumstances are met at the same time, it shall be deemed to be affiliated with the operation, and the construction contract signed by the construction project shall be invalid:

(1) The actual constructor has not obtained the qualification of the construction enterprise or exceeds the qualification level;

(2) The actual constructor carries out business activities in the form of branches, construction teams or project departments of the construction enterprise, but there is no property right connection with the construction enterprise, no unified financial management, and no standardized personnel appointment, dismissal, transfer or employment procedures;

(3) The actual constructor raises funds and organizes the construction by himself, and the construction enterprise only collects management fees, does not participate in the construction and management of the project, and does not bear technical, quality and economic responsibilities.

5. If one of the following circumstances is met, it shall be deemed to be illegal subcontracting, and the construction contract signed shall be invalid:

(1) The contractor subcontracts the construction of the main structure of the construction project to others for completion;

(2) The subcontractor does not have the corresponding qualifications;

(3) The subcontract is not approved by the construction unit;

(4) The subcontractor subcontracts the project contracted by the subcontractor.

6. If the following circumstances are met at the same time, it shall be deemed to be labor subcontracting, and the signed contract shall be valid:

(1) The actual constructor has the construction qualifications of one or more projects specified in the qualification level standards of labor subcontracting enterprises, and the contracted construction task is only one or several processes of the entire project, rather than the entire set of processes of the project;

(2) The way of contracting is to provide labor services, rather than contracting labor and materials.

7. If the employer signs a construction contract with the contractor without obtaining a construction project planning permit, the contract shall be deemed invalid, but if the construction project planning permit is obtained before filing a lawsuit, the contract shall be deemed valid.

If the construction project is carried out on an overscale basis in violation of the provisions of the construction project planning permit, the construction contract signed shall be invalid, but if the formalities are completed before the lawsuit is filed, the contract shall be deemed valid.

3. Determination of the price of the construction project

8. If the price agreed in the record contract is inconsistent with the winning bid, if the project is a project that must be tendered, the project price shall be determined according to the winning bid; If the project is not a project that must be tendered, and the parties provide evidence to prove that the record contract is a contract that is the true intention of both parties or the actual performance of the contract, the agreement of the record contract may be filed to determine the project price.

9. If the contractor undertakes to make a substantial concession on the project price for the bidding project, it is a substantial change in the project price and shall be deemed invalid; If there is no evidence to prove that the project price after the concession is lower than the construction cost, the contractor may be deemed valid and settle the project price according to the commitment.

10. If the construction contract stipulates that the employer shall reply within a certain period of time after the contractor submits the settlement documents, but it is not agreed that failure to reply within the time limit shall be deemed to be the approval of the completion settlement documents, the contractor's request to determine the project price according to the settlement documents shall not be supported.

11. If the construction contract of the construction project is invalid, but the project is qualified after completion and acceptance, the project price shall be determined with reference to the contract.

12. If the construction contract of the construction project is terminated and the project is not completed but the quality is qualified, the project price shall be determined with reference to the contract.

13. In the case of illegal subcontracting or illegal subcontracting of a construction project, if the actual constructor and the contractor agree that the settlement price between the contractor and the employer shall be used as the basis for settlement between the two parties, the project price due to the actual constructor shall be determined in accordance with the agreement; Where the actual constructor adduces evidence to prove that the settlement between the contractor and the employer harmed its lawful rights and interests, the people's court may, on the basis of the application of the actual constructor, determine the project price due to the actual constructor on the basis of the contract between the contractor and the employer and relevant visas.

14. If the construction contract of a construction project is invalid, but the project is accepted upon completion and delivered to the employer for use, the contractor shall bear the corresponding project warranty obligations and responsibilities, and the employer may withhold a certain proportion of the project payment as the project quality warranty money with reference to the contract.

4. Determination of liability for breach of contract

15. Where the contractor asserts the right to extend the construction period on the ground that the employer has not paid the progress payment as agreed in the contract, and the employer argues that the contractor has not applied for the extension visa in accordance with the contract, the contractor's claim may be supported if the contractor adduces evidence to prove that it has requested the employer to extend the construction period within the time limit for applying for the extension of the construction period agreed in the contract, or if the employer provides evidence to prove that the progress of the project has been seriously affected by the employer's delay in paying the progress payment.

If it is determined that the contractor has the right to extend the construction period due to the employer's delay in paying the progress payment, the extension period shall be from the date on which the employer defaults on the progress payment to the date on which the progress payment is paid.

5. Protection of the right of priority to be compensated for the project price

16. The contractor of the decoration project may support the claim of the priority right to be compensated for the project price; The claim of the engineering surveyor or designer for the priority of compensation for the engineering survey or design fee shall not be supported.

17. If the construction contract of a construction project is invalid, but the project passes the completion acceptance, the contractor's claim for priority to be compensated for the project price may be supported.

18. If the subcontractor or the actual contractor has completed the construction obligations agreed in the contract and the quality of the project is qualified, if the general contractor or the illegal subcontractor neglects to claim the priority right to be compensated for the project price, the claim for the priority right to be compensated for the project price within the scope of the project price owed by the employer may be supported.

19. These Guiding Opinions shall come into force on the date of issuance.

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