Construction project debt joined
1. Identification criteria
【Applicable Laws】
1. Criteria for determining debt entry
Debt adjournment is a type of debt assumption, which in a broad sense includes two situations: a third party replacing the debtor to bear the debtor's position and the relationship between the third party joining the debt and the original debtor sharing a debt of the same content. The former is called exonerated debt assumption and the latter is called concurrent debt assumption. Exempted debt assumption, that is, debt transfer, refers to the assumption of all debts by a third party in place of the original debtor, thereby disengaging the original debtor from the debt relationship. The so-called concurrent debt assumption, that is, debt accession, refers to the debt assumption method in which the third party reaches a tripartite agreement with the creditor or the debtor, or the third party reaches a two-party agreement with the creditor or the third party unilaterally promises the creditor that the third party will perform the debtor's obligations, but at the same time does not discharge the debtor from performing its obligations54. At this time, a joint and several relationship is formed between the debtor and the third party, and they are jointly and severally responsible.
Debt incorporation has the following legal characteristics: (1) it presupposes the effective existence of the original debt; (2) the third party and the original debtor bear debts of the same content; (3) the third party and the original debtor bear joint and several liability; (4) the third party enjoys the defense of the creditor enjoyed by the original debtor, but the third party may not use its relationship with the debtor as a reason (the reason for the assumption of the debt) against the creditor.
There are three scenarios for debt entry:
(1) Tripartite agreement: The creditor, the debtor and the third party reach an agreement on debt accession, which is a typical way of debt accession, this method is more standardized, it can be clear that between the three parties in the debt plus 54, see Article 17 of the Minutes of Discussion of the Jiangsu Provincial Higher People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (I) stipulates: "Debt accession refers to the participation of a third party and the creditor, The debtor enters into a tripartite agreement or a third party enters into a mutual agreement with the creditor or a third party undertakes unilaterally to the creditor that the debtor will perform the debtor's obligations, but at the same time does not relieve the debtor of the way of assuming the obligations. "Enter into the relationship of rights and obligations to avoid unnecessary disputes."
(2) Agreement between the two parties: First, an agreement is reached between the third party and the creditor on the participation of the debt; the second is that the agreement between the third party and the debtor on the joining of the debt should be reached, and it should be noted that article 64 of the Contract Law stipulates: "If the parties agree that the debtor will perform the debt to the third party, the debtor shall bear the liability for breach of contract to the creditor if the debtor fails to perform the debt to the third party or the performance of the debt is not in accordance with the agreement." "Since the creditor is not a party to the debt accession agreement between the third party and the debtor, according to article 64 of the Contract Law and the principle of contractual relativity, when the third party fails to perform the obligation of debt joining, the third party is liable for breach of contract to the debtor, rather than to the creditor, and the creditor cannot directly rely on the debt accession agreement between the third party and the debtor to require the third party to perform the debt or bear the liability for breach of contract, but the third party agrees, this is not the case." Third, when a consensus is reached between the creditor and the debtor on the participation of the debt, it should be noted that article 65 of the Contract Law stipulates: "If the parties agree that a third party will perform the debt to the creditor, and the third party does not perform the obligation or the performance of the debt does not conform to the agreement, the debtor shall bear the liability for breach of contract to the creditor." "Since the essence of debt accession is to create obligations to a third party, a debt accession agreement without the consent of the third party is a contract whose validity is pending, and if it is recognized by a third party, it is valid, and if it is not recognized by a third party, it is invalid." When a third party fails to perform its obligation to join the debt, the debt entry shall be performed by the creditor or bear the liability for breach of contract, and the creditor cannot directly require the third party to perform the debt or bear the liability for breach of contract directly according to the debt accession agreement between the creditor and the debtor, but the third party agrees, this is not the case.
3. Third party unilateral commitment: A unilateral commitment made by a third party to the creditor to join the debt. In practice, after a third party makes an expression of intent to assume a debt to a creditor (including through a tripartite agreement, an agreement between the two parties, or a unilateral commitment), the legal nature of the expression of intent to assume the debt made by the third party is often an issue that the parties dispute. Among them, it is easier to confuse the distinction and determination between debt accession and debt transfer, debt accession and guarantee. Article 84 of the Contract Law stipulates that "where the debtor transfers all or part of the obligations under the contract to a third party, it shall obtain the consent of the creditor." "The main difference between debt transfer and debt accession is that debt accession does not relieve the original debtor of its obligation to perform its obligations, and the original debtor does not detach from the original debt relationship; In practice, when a third party expresses its intention to assume a debt, if the parties do not expressly agree on whether the original debtor withdraws from the original debt relationship, the original debtor will often proceed from the perspective of safeguarding its own interests and claim that the debt has been transferred to the third party, that it has withdrawn from the original debt relationship, and no longer bears the obligation to perform the original debt. In this regard, it should be determined in accordance with the provisions of article 84 of the Contract Law, the transfer of debts must be agreed by the creditor, if the creditor does not explicitly consent to the original debtor's withdrawal from the original debt relationship and no longer undertakes to perform the obligation to perform the debt, it should be determined that the expression of intention to bear the debt made by the third party constitutes debt joining, not debt transfer. Of course, this limitation is not applicable if the parties have made an express agreement to discharge the original debtor from performance, or if the creditor has no objection to the discharge of the debtor's performance obligations.55 For example, the Supreme People's Court found in reference case 2: "Where a third party outside the contract undertakes to assume the obligations of the debtor to the creditor in the contract, if there is no sufficient evidence to prove that the creditor agrees to the transfer of the debt to the third party or the debtor withdraws from the contract55, see Article 18 of the Minutes of Discussion of the Jiangsu Provincial Higher People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (I) as provided: "If the third party and the creditor do not expressly agree in the contract to discharge the debtor from performing its obligations, Where a creditor requests the debtor to bear the responsibility for performance, the people's court shall support it. Except where the creditor has no objection to the discharge of the debtor from its obligations to perform. ”
Editor-in-Chief: Zhu Shuying
Source: Integration of Views of the Courts in The Trial of Construction Project Cases, pp. 68-70
Publication date: 2015.06.01
Legal Classification: Construction Contracts
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【Risk Lawyer】Mr. Xu Haifeng, who has been engaged in legal research and legal practice for more than 20 years, has published more than 20 legal works and represented many major difficult and complicated cases, especially civil and commercial cases of the Supreme People's Court and the Provincial High Court, which has aroused many social repercussions.
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