Claims under the construction contract may be transferred in accordance with law

Claims under the construction contract may be transferred in accordance with law

Article 79 of the Contract Law of the People's Republic of China (hereinafter referred to as the Contract Law) stipulates three types of contractual rights that are not negotiable: (1) they may not be transferred according to the nature of the contract; (2) they may not be transferred according to the agreement of the parties; and (3) they may not be transferred according to the provisions of law. The current laws, regulations and judicial interpretations do not clearly stipulate whether the claims under the construction contract (including the claims for the construction funds) can be transferred, resulting in the transfer of the claims under the construction contract to a third party by one party to the construction contract, and the other party will often raise objections to the validity of the assignment of the claims under the construction contract. Whether the creditor's rights under the construction contract can be transferred and whether the transferee of the creditor's rights under the construction contract has the right to claim rights and initiate a lawsuit in its own name shall be analyzed and determined in accordance with articles 79 and 80 of the Contract Law of China. The judicial documents formulated by some local courts clearly stipulate that claims under construction contracts can be transferred according to law. In the relevant Guiding Cases, the Supreme People's Court also clarified that creditor's rights under construction contracts may be transferred in accordance with law.

Editor-in-Chief: Zhu Shuying

Source: Integration of Views of the Courts in The Trial of Construction Project Cases, p. 8

Publication date: 2015.06.01

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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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