If the construction contract is invalid due to the Contractor’s reason, should compensation be made for the loss of shutdown and slowdown due to the employer’s reason? The party at fault shall bear the losses caused by the invalidity of the contract.
Where there is loss, there is relief.
Even if the construction contract is invalid due to the Contractor’s fault, the Contractor’s shutdown is caused by the employer, and the shutdown loss has nothing to do with the effectiveness of the contract, the responsibility should be borne by the employer, the fault party causing the actual loss.
In some cases, it is difficult to prove the actual loss.
6.
For an invalid contract signed for contracting a construction project without or beyond the qualification, the fault party is mainly the contractor, and the employer is also at fault for neglecting to review the qualification and failing to follow up and supervise the project in time.
The legal liability for compensation losses arising from the invalidity of the contract belongs to the liability for contracting fault in legal nature, rather than the liability for breach of contract or tort.
(3) Loss caused by project quality.
Scope of loss compensation claimed by the contractor to the employer due to invalid contract (1) actual expenditure loss.
So, For the losses caused by the Contractor’s overdue completion to the employer, the compensation for the delay losses claimed by the employer shall be based on the principles of fairness and good faith, and the scope of compensation shall be limited to the actual losses.
It is difficult to determine the loss of available interests.
agreed in the contract.
Actual loss expenses such as expenses for handling bidding procedures, expenses for contract filing, expenses for signing the contract, expenses for performing the contract other than the project price, etc.
Main conditions for the employer to bear quality responsibility: ① there are defects in the employer’s technical documents, which should not be found by the contractor; ② The materials provided by Party A have defects, which can not be found by the Contractor through inspection; ③ The employer dismembers the employer; The employer directly designates the subcontractor, and the contractor has performed the responsibilities of the general contractor in accordance with the contract; ④ The employer changes the design scheme without authorization.
When both parties sign the construction contract, the agreed contents on project pricing, measurement, project payment proportion, payment time, project quality, construction period, settlement procedures, retention of quality assurance deposit, etc.
If the employer is at fault for unqualified quality, it shall also bear corresponding responsibilities.
If the construction project planning permit is not handled, the employer shall bear the responsibility (if the contractor is indeed at fault, it shall bear the corresponding responsibility).
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If it is handled in strict accordance with the rule that the proof cannot be given, it will be unfair to the party suffering the loss and easily lead to the imbalance of interests.
“The treatment of invalid contracts is based on the principle of restitution, so the scope of compensation is limited to actual losses and should not compensate for expected interests”.
The interpretation contents of the following articles are summarized, sorted out and excerpted from the book judicial interpretation (I) understanding and application of the construction contract of new construction project of the Supreme People’s court compiled by the first civil trial division of the Supreme People’s court.
The loss caused by the invalidity of the construction project contract must be caused by the illegal act of the employer or the contractor that leads to the invalidity of the contract, that is, there is a causal relationship between the loss and the fault that leads to the invalidity of the contract.
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(2) Construction period claim.
If the employer still fails to perform within the time limit, the people’s court may, depending on the circumstances of breach of contract, rely on it Article 259 and article 283 of the contract law stipulate that the judge shall postpone the construction period and shall have the right to claim compensation for the loss of suspension (nest work).
Circumstances where the employer and the contractor jointly bear the quality responsibility: ① there are defects in the employer’s technical documents, which the contractor should have found but did not find; ② The materials provided by Party A are defective and the Contractor fails to inspect them; ③ The employer directly appoints the subcontractor, and the Contractor fails to perform the responsibility of the general contractor; ④ The contractor will not refuse the employer’s request to reduce the quality standard.
If a construction project that must be tendered according to law is not tendered and an invalid contract is concluded, the fault party is mainly the employer, and the Contractor shall bear secondary fault liability.
Scope of loss compensation claimed by the Employer from the contractor due to invalid contract (1) actual expenses.
However, the contractor has the obligation to avoid the expansion of losses.
The judge can only exercise his discretion freely.
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thirty-three If the employer fails to perform the cooperative obligations such as informing the changed construction scheme, construction technical disclosure and improving construction conditions, resulting in the Contractor’s suspension (nest) work, so that it is difficult to complete the construction of the project, the Contractor shall urge the employer to perform within a reasonable time limit.
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From the perspective of balancing the interests of both parties to the contract, on the premise that the construction contract is invalid and the parties have a clear agreement on the standard of compensation for losses in the contract, they can compensate for losses with reference to the contract.
[interpretation] 1.
If the size of the loss cannot be determined, and one party requests to determine the size of the loss with reference to the quality standard, construction period, project price payment time and other contents agreed in the contract, the people’s court may make a judgment in combination with the degree of fault of both parties, the causal relationship between fault and loss and other factors.
This article is about the burden of proof for compensation for losses when the construction contract of the construction project is invalid, and the provisions that the size of losses can be determined by referring to the quality standard, construction period, project price payment time, etc.
Minutes of the Eighth National Court Civil and commercial trial Conference (civil part) of the Supreme People’s court 32 If the employer fails to provide raw materials, equipment, site, funds and technical data as agreed, the contractor has notified the employer for inspection before concealment of concealed works, and the employer fails to timely inspect the works, resulting in stoppage or delay in construction, the employer shall compensate the contractor for the losses caused by stoppage (nest work), including labor costs of stoppage (nest work) personnel Mechanical equipment idling cost and equipment rental cost caused by idling.
are the true expression of intention of both parties and the decision made by both parties after careful consideration of the core content of the construction contract, The contract shall not be invalid because it violates the relevant provisions of the State Administration, only the pricing and measurement terms shall be selectively applied, and other payment terms shall be completely denied.
The construction contract of the construction project is invalid, and the duration clauses and breach clauses agreed in the contract are invalid, which does not mean that the contractor will no longer bear the responsibility for construction delay.
If the contractor is exempted from the compensation liability for construction delay due to the invalidity of the contract, it will lead to the imbalance of interests between the employer and the contractor.
Therefore, the actual loss can be determined by referring to the contents of the above contract, so as to avoid that the parties cannot obtain additional benefits than the effectiveness of the contract due to the invalidity of the contract.
06 Article 6 If the construction contract of a construction project is invalid and one party requests the other party to compensate for the losses, it shall bear the burden of proof on the other party’s fault, the size of the loss and the causal relationship between the fault and the loss.
(2) Loss of work stoppage and slowdown.
Actual losses incurred due to handling bidding procedures, contract filing, contract conclusion, preparation or actual performance of the contract, etc.
If it is included in the scope of loss compensation, it is easy to lead to interest imbalance.
