Discussion on the code packet of the released version of the actual constructor to bear the responsibility of the project payment arrears

Introduction/Introduction

Article 43 of the Interpretation of the Supreme People's Court on the Application of Law in the Trial of Cases of Disputes over Construction Contracts for Construction Projects (1) stipulates that if the actual construction person brings a lawsuit against a subcontractor or an illegal subcontractor as the defendant, the people's court shall accept it according to law.

Where the actual constructor claims rights for the defendant in a code packet of the released version, the people's court shall add the subcontractor or the illegal subcontractor as the third person in the case, and after ascertaining the amount of the construction project price owed by the code packet of the released version to the subcontractor or the illegal subcontractor, judge that the code packet of the released version shall bear responsibility for the actual constructor within the scope of the construction project price owed.

According to the provisions of this article, from the understanding of the actual construction person, whether the actual construction person with qualifications can claim the responsibility for the payment of the project price to the code packet of the released version, the scope of the code packet of the released version, the responsibility of the code packet of the released version, the procedural problems of the third person who has not added the subcontractor or the illegal subcontractor, and the fact that the code packet of the released version has not been found The provisions of this article are briefly discussed from the perspective of the amount of the project price owed by the subcontractor or the illegal subcontractor.

The first paragraph of this article is an advocacy clause. The actual construction person and the subcontractor, or the illegal subcontractor, have the relativity of the contract and can of course sue. The second paragraph is to prevent the subcontractor, the illegal subcontractor from going missing, going bankrupt, deteriorating credit status and other reasons that cause the wage interests of migrant workers and other construction workers to be not guaranteed, and to give the actual construction person the right to break through the relativity of the contract and conditionally claim the responsibility for the payment of the project price to the code packet of the released version.

This article makes two points clear: 1. When the actual construction person sues the code packet of the released version for payment of the project price, the people's court shall add the subcontractor or illegal subcontractor as the third person in the case to facilitate the identification of the basic facts of the case. 2. The people's court shall find out the amount of the code packet of the released version that the person owes the subcontractor or the illegal subcontractor the project price, and the code packet of the released version person shall only bear the responsibility for payment to the actual construction person within the scope of the arrears.

After the code packet of the released version pays the project price to the actual construction person, the corresponding rights and obligations between the code packet of the released version person, subcontractor or illegal subcontractor, and the actual construction person shall be terminated.

1

The understanding of the actual construction personnel

According to common understanding, the actual construction person refers to the construction person who has invalidated the construction contract due to subcontracting, illegal subcontracting and qualification affiliation, and finally invested funds, labor, materials and machinery and equipment to actually carry out the construction of the project. Articles 7, 9 and 11 of the "Administrative Measures for the Identification and Punishment of Illegal Contracts in Construction Engineering Construction Code Packet of the released version" stipulate that subcontracting refers to the contracting unit's failure to perform the responsibilities and obligations stipulated in the contract after contracting the project, and transfers all the projects it contracts or all the projects it contracts to other units or individuals for construction in the name of subcontracting.

Affiliated refers to the act of undertaking a project by a unit or individual in the name of other qualified construction units. Illegal subcontracting refers to the act of subcontracting a unit project or a sub-project to other units or individuals for construction in violation of laws and regulations after contracting a project. It should be noted that: 1. The actual construction person corresponds to an invalid construction project construction contract, and the contractor corresponding to a valid construction project construction contract shall not be identified as the actual construction person.

Subcontracting includes legal subcontracting and illegal subcontracting. The contractor who is legally subcontracted cannot be identified as the actual construction person. 2. The actual construction person has no contractual relationship with the code packet of the released version, and does not have the relativity of the contract. The implication of "actual" is that it has no contractual relationship with the code packet of the released version, but it is actually the unit or individual carrying out the project construction.

III. The actual construction person in this article refers only to the actual construction person in the subcontracting relationship and illegal subcontracting relationship, excluding the actual construction person in the qualification affiliation relationship. The reasons are discussed in detail below.

2

On the qualification of the actual construction personnel linked to the code packet of the released version of the project price to claim responsibility

According to the textual interpretation, this interpretation only applies to the actual construction person corresponding to subcontracting and illegal subcontracting, and does not apply to the actual construction person with qualification affiliation. Because the actual construction person with qualification affiliation has a legal relationship with the code packet of the released version in the name of the person to be affixed, and has a contractual relationship with the code packet of the released version. Therefore, there is no problem of breaking through the relativity of the contract to claim the responsibility for the payment of the project price to the code packet of the released version.

In the case of qualification affiliation, the actual constructor can claim rights to the code packet of the released version according to Article 793 of the Civil Code on "The construction contract of the construction project is invalid, but if the construction project passes the acceptance inspection, the contractor may be compensated at a discount according to the contract on the project price...".

In addition, the qualification of affiliated behavior and subcontracting behavior is easy to confuse, according to the construction code packet of the released version and the contract violations identified investigation and punishment of the provisions of Article 8, there is evidence to prove that it is affiliated or other illegal acts, not identified as subcontracting. In other words, there is no evidence to prove that it is affiliated or other illegal acts, it is identified as subcontracting.

Subcontracting behavior may be subject to the provisions of this interpretation. Under normal circumstances, the qualification-linked behavior occurs before the project is contracted, and the subcontracting behavior occurs after the project is contracted, which can be comprehensively determined by the participation in bidding and the decision on the conclusion of the contract.

3

The scope of the released version of the code packet

The second paragraph of the interpretation of this article stipulates that if the actual construction person claims the rights of the defendant with the code packet of the released version, the people's court shall, after ascertaining the amount of the code packet of the released version that the person owes the subcontractor or the illegal subcontractor the project price, judge that the code packet of the released version shall be liable to the actual construction person within the scope of the unpaid project price. The author believes that the code packet of the released version here is limited to the construction unit, excluding the non-construction unit code packet of the released version in the multi-hand circulation (there are two or more parties to the main body between the construction unit and the actual construction person, the same below).

The main reasons are as follows: 1. The code packet of the released version used in this interpretation refers to the construction unit. For example, the provisions of Article 3 of this Interpretation on the obligation of the code packet of the released version to handle the planning approval procedures such as the construction project planning license, such as Article 35 of this Interpretation on the Contractor who enters into a construction project construction contract with the code packet of the released version enjoys the right of priority to compensation.

Second, the construction unit is the final beneficiary of the construction project, let it bear the responsibility of the actual construction person's project price arrears, and the rights and obligations are relatively reasonable. The main body of the non-construction unit code packet of the released version in the multi-hand circulation generally only charges management fees, intermediate fees and other non-project price fees, and makes it bear the responsibility of the non-contract counterparty's project price payment, and the rights and obligations are not equal.

III. The actual constructor's claim to the code packet of the released version of the project price arrears has violated the basic legal principle of the relativity of the contract, and should no longer expand the interpretation of the code packet of the released version. With the continuous reduction of subcontractors, illegal subcontractors, missing persons, bankruptcy, deterioration of credit status, etc., and the continuous increase of the wage protection methods for migrant workers and other construction workers, the provisions of the actual constructor's claim to contract rights should return to the basic legal principle of contract relativity.

The view that the code packet of the released version includes the main body of the non-construction unit code packet of the released version in multi-hand circulation is suspected of expanding the interpretation of the code packet of the released version. In practical cases, if the actual construction person interprets the second paragraph of this article according to the provisions of this article, breaks through the relativity of the contract, and claims the responsibility for the payment of the project price to the main body of the code packet of the released version of the non-construction unit, the people's court mostly rejects the corresponding litigation request of the actual construction person on the grounds that the code packet of the released version is not the construction unit.

The code packet of the released version only refers to the construction unit's viewpoint. The inadequacy is that the actual construction person uses the code packet of the released version to owe the next project price on the grounds that the code packet of the released version is required to bear the non-code packet of the released version. The creditor's debt is even more insufficient in law. Because the code packet of the released version of the main reason for the liability is that the subcontractor or illegal subcontractor is its creditor, but also the actual construction of the debtor, drawing on the basic system of subrogation litigation, code packet of the released version of the person to pay the actual construction of the project price, with the subcontractor or illegal subcontractor, the actual construction of the corresponding rights and obligations between the termination.

4

Responsibility of the released version of the code packet

The second paragraph of the interpretation of this article stipulates that after the people's court finds out the amount of the code packet of the released version that the subcontractor or illegal subcontractor owes the project price, the judgment code packet of the released version shall bear responsibility for the actual construction person within the scope of the unpaid project price. It makes two points clear: First, only when the code packet of the released version owes the subcontractor or illegal subcontractor the project price, it needs to bear responsibility for the actual construction person.

If the code packet of the released version of the non-project price items such as interest, liquidated damages, damages, etc., it is not necessary to bear responsibility for the actual construction person. Regarding the project price, it is divided from the perspective of the components of the cost, including labor costs, material costs, construction equipment use fees, enterprise management fees, profits, fees and taxes.

The scope of responsibility of the released version of the code packet to the actual construction person is the amount of the project price owed by the subcontractor or illegal subcontractor, not the amount of the project price owed by the subcontractor or illegal subcontractor to the actual construction person.

5

Regarding the procedural issues regarding the failure to add a subcontractor or the illegal subcontractor as a third party in the case

Article 177, Paragraph 1, Item 4 of the Civil Procedure Law provides that if the original judgment omits the parties or violates the legal procedures by default, the original judgment shall be revoked and remanded to the original people's court for retrial. Paragraph 2 of the Interpretation of this Article clearly stipulates that if the actual construction person claims the rights of the defendant with the code packet of the released version, the people's court shall add the subcontractor or the illegal subcontractor as the third person in the case.

In the case of the actual construction person suing the code packet of the released version, the subcontractor or the illegal subcontractor is not added as the third person in the case according to law, which is suspected of procedural violations. There are also contrary views that the additional subcontractor or the illegal subcontractor is the third person in the case, in order to find out the amount of the project price owed by the code packet of the released version to the subcontractor or the illegal subcontractor.

In the case that the code packet of the released version can be ascertained that the person owes the subcontractor or the illegal subcontractor the amount of the project price, the failure to add the subcontractor or the illegal subcontractor as the third party in the case does not constitute a procedural violation.

6

On the fact that the unidentified code packet of the released version of the person owed the subcontractor or illegal subcontractor the amount of the project price

Article 177, Paragraph 1, Paragraph 3 of the Civil Procedure Law provides that if the basic facts found in the original judgment are unclear, the original judgment shall be revoked and sent back to the original people's court for retrial, or the judgment shall be revised after ascertaining the facts. If the code packet of the released version is not ascertained according to law, the amount of the project price owed to the subcontractor or the illegal subcontractor is suspected of being unclear in the basic facts.

The people's court shall add the subcontractor or the illegal subcontractor as the third party in the case, and after ascertaining the amount of the project price owed by the code packet of the released version to the subcontractor or the illegal subcontractor, the judgment code packet of the released version shall bear responsibility for the actual construction person within the scope of the unpaid project price. Regarding the method of investigation, in addition to the statements of the code packet of the released version person and the subcontractor or the illegal subcontractor, it also includes the appraisal of the project cost, settlement materials, and the judgment of another case. The burden of proof rests on the actual construction person.

There is a contrary view that the code packet of the released version should bear the burden of proof for not owing the subcontractor or illegal subcontractor the project price. The author believes that this view is debatable. Taking a step back, even if the code packet of the released version owes the subcontractor or illegal subcontractor the project price is clear, but the specific amount is not clear, nor should the code packet of the released version be judged in accordance with the provisions of this interpretation to bear the responsibility for payment, otherwise it will lead to problems that cannot be executed later, and it does not comply with the provisions of this interpretation on the amount of the code packet of the released version owed to the subcontractor or illegal subcontractor.

7

When applying this article, the following points should be noted

The actual construction person claims the responsibility for the payment of the project price to the code packet of the released version, and the code packet of the released version shall be settled or shall be settled after the code packet of the released version is settled with the subcontractor or the illegal subcontractor. If the time for the code packet of the released version to pay the project price to the subcontractor or the illegal subcontractor has not yet started, there will be no arrears, and the actual construction person's appeal will be rejected accordingly due to the failure of the project price payment conditions.

The contractor who legally subcontracts the project does not belong to the actual construction person, and cannot claim rights to the code packet of the released version according to this article. Breaking through the relativity of the contract must be clearly stipulated by law. There are also contrary views that the contractor who violates the contract can break through the relativity of the contract and claim the responsibility for the payment of the project price to the code packet of the released version. The contractor who legally subcontracts should enjoy this right.

The interpretation of this article only stipulates that the actual constructor can break through the relativity of the contract and claim the responsibility for the payment of the project price to the code packet of the released version, but it does not stipulate that the actual constructor enjoys the right of priority compensation. According to the provisions of Article 35 of this Interpretation, the subject who enjoys the right of priority compensation must have a contractual relationship with the code packet of the released version.

The actual constructor claims rights to the code packet of the released version, and is not bound by the arbitration jurisdiction clause between the code packet of the released version and the subcontractor or illegal subcontractor. The arbitration jurisdiction clause is concluded between the code packet of the released version and the subcontractor or illegal subcontractor, and is not binding on the actual constructor. Taking a step back, even if the actual constructor applies for arbitration, the case cannot be accepted because there is no arbitration agreement.

There are also contrary views that the code packet of the released version of the subcontractor or illegal subcontractor's procedural defense, can be claimed to the actual construction person, including arbitration agreement.

Disclaimer: The views in this article are for exchange and discussion only, not as a basis for handling cases. Please criticize and correct the deficiencies in this article.

About the Author

Shi Wenhui Lawyer

Deputy Director of Zhiheng Haikou Management Committee

Zhiheng Haikou Equity Senior Partner

Director of Zhiheng Haikou Construction Engineering Department

Commercial mediator of Hainan Free Trade Port

Hainan Lawyers Association Construction Engineering and Real Estate

Deputy Director of Professional Committee

Contact number: 18689665886

Unit Address: Binhai Avenue, Longhua District, Haikou City

17th Floor, Block B, Baifang Plaza, No. 105

ZHIHENG

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