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Since the offset debt is not affected by the invalidity of the contract, the mortgage agreement should not be negatively evaluated in terms of effectiveness.
The first paragraph of article 793 of the Civil Code stipulates: “if the construction contract of a construction project is invalid, but the construction project passes the acceptance, the contractor may be compensated at a discount according to the agreement on the project price in the contract.” Article 38 of the interpretation of the Supreme People’s court on the application of law in the trial of construction contract disputes (I) also stipulates: “If the quality of the construction project is qualified and the contractor requests the price of the construction project to be repaid in priority with the price converted or auctioned by the project, the people’s court shall support it.” Therefore, even if the construction contract is invalid without legal bidding procedures, as long as the project is qualified, the employer has the obligation to pay the project price.
Secondly, the agreement on housing project payment as the parties’ agreement on the settlement of the unpaid project payment is in nature the liquidation of the existing creditor’s rights and debts between the employer and the contractor.
Whether the effectiveness of the mortgage agreement is affected by the invalidity of the construction contract should be comprehensively analyzed and determined according to the content of the agreement.
It is correct that we tend to the second view.
After the agreement was signed, the employer argued that the mortgage agreement signed by both parties should also be invalid on the grounds that the construction contract of the construction project did not go through the legal bidding procedures and violated the mandatory provisions of laws and administrative regulations.
[question] During the construction of the construction project, the employer and the contractor signed a house for the top agreement on the project funds already owed.
Compared with the construction contract, the agreement on housing project payment is relatively independent and is based on article 567 of the civil code (formerly Article 98 of the contract law, which has been repealed) The legislative spirit behind the provision that “the termination of the rights and obligations of the contract does not affect the effectiveness of the settlement and liquidation clauses in the contract” should be affirmed.
There are two different views on how to determine the effectiveness of the agreement: the first view is that paying debts with houses belongs to a part of the construction contract, the construction contract is invalid, and the agreement paying debts with houses is also invalid; The second view is that the payment of debt with housing belongs to the agreement of both parties, and its effectiveness should be recognized.
First of all, from the agreement of housing for the project payment, the parties agreed to use the house (usually the house under construction) to offset the project payment owed.
Later, because the construction contract of the construction project is invalid without legal bidding procedures, should the agreement between the employer and the contractor to offset the project payment with the house also be invalid? [answer] In practice, it is common for the employer and the contractor to sign an agreement on the project payment owed to the contractor (housing for debt).
