Considering that the project involved is the steel grating project of the production workshop, and the main material required for the project is steel, the objective fact that the steel price has increased nearly twice by the commencement date agreed by both parties in the contract, and there is no evidence that the contractor deliberately fails to perform its obligations under the contract, combined with the provisions of the performance bond in the contract between both parties, The court of first instance decided that the contractor should compensate the employer for the default loss of 142000 yuan (offset by the performance security paid by the Contractor).
103 retrial Court: Jiangsu High Court (2020) Su minzai No.
(article 3.7 of the contract stipulates that the Contractor shall provide performance security in the form, amount and period of 10% of the total contract price.
Therefore, the Contractor’s argument on the change of situation is not accepted.
reconstituted stem verification production line construction project signed by the employer and the contractor on September 22, 2016; 2.
The contractor paid 142000 yuan of performance security to the employer.) 4.
2.
8 1.
8.
Terminate the construction contract of steel grating construction project of production workshop signed by both parties; 2.
Brief introduction of the case: due to the sharp rise in the price of main material steel, the contractor proposed to terminate the construction contract and refund part of the performance bond as appropriate.
If the Contractor fails to perform its obligations in accordance with the contract and is at fault, it shall bear the corresponding liability for breach of contract.
3.
The Contractor shall compensate the employer for the loss of 1850038.63 yuan (the price difference between the two tenders is 1691319.63 yuan, the construction delay is 70719 yuan, and the lawyer’s fee is 88000 yuan).
won the bid with a bid price of 3105698.34 yuan.
Rescind the construction contract of steel grating project of production workshop of Jiangsu Xin * tobacco flake Co., Ltd.
On May 25, 2017, Zhuozhou blue * Grid Co., Ltd.
6.
The contractor unilaterally terminates the contract.
The court of second instance held that the Contractor’s failure to perform its construction obligations as agreed in the contract constitutes a breach of contract and should bear the corresponding liability for breach of contract..
In the face of soaring material prices, should the construction party stick to the contract to continue construction or suggest a default stop loss? Conversely, if the price of materials plummets, should the employer stick to the contract or break the contract and make profits? The following real case may bring some thoughts.
The employer refuses to accept the judgment of first instance and appeals to the intermediate people’s Court of Huai’an City, Jiangsu Province.
According to the guide price of Huai’an construction engineering materials recorded in the magazine Huai’an engineering cost management published by Huai’an engineering cost management office, the overall price level of Huai’an steel was rising from August 2016 to April 2017, but the average monthly increase was relatively stable, which was a gradual rising process.
In 2016, the subcontracting unit invited external bidding for “steel grating project of production workshop of supporting engineering construction project of reconstituted stem verification production line”.
5.
7.
In the first instance judgment, the employer appealed to the people’s Court of qingjiangpu District, Huai’an City on August 31, 2017.
On March 21, 2017, the contractor sent a letter to the employer, saying that it was unable to perform the contract due to major changes in the market price of steel, and notified the employer to terminate the contract and return the deposit.
Due to the Contractor’s failure to perform the above contract, the employer again invited tenders for the project involved.
The Contractor shall compensate the employer for the default loss of 142000 yuan (offset by the performance bond).
Other losses claimed by the employer shall not be supported due to insufficient evidence.
Reject other litigation claims of the employer.
The pricing method of the project agreed in the contract is fixed unit price, and the rise of material price is the risk under the contract.
On March 19, 2017, the contractor sent a letter to the employer, saying that the market price of steel had increased more than twice as much as when the contract was signed, requiring the employer to adjust the contract price to 2957394.99 yuan, and then the contractor began to perform the contract.
7343 civil judgment second instance court: Huai’an intermediate people’s Court (2018) Su 08 Minzhong No.
The employer believes that there is no basis for terminating the contract on the grounds of rising material prices and requires continued construction.
On March 27, 2017, the contractor sent a letter to the employer requesting to terminate the construction contract and return part of the performance bond as appropriate.
Otherwise, the contract was terminated and the employer was required to return the deposit of 142000 yuan and was willing to accept a fine of 10000 yuan.
On September 22, 2016, the employer and the contractor signed a construction contract for the construction project, with the contract price of 1414378.71 yuan.
On March 24, 2017, the law firm sent another letter to the contractor, saying that the Contractor’s forced unilateral termination of the contract has constituted a serious breach of contract, and the employer is unable to return the performance bond, and reserves the right to investigate the losses of the employer caused by the breach of contract.
On August 29, 2016, the contractor bid and won the bid, and the bid winning price was 1414378.71 yuan.
Employer: Xin * company contractor: Chen * company first instance court: Huai’an qingjiangpu District People’s Court (2017) Su 0812 minchu No.
Judgment of the court of first instance: 1.
On March 22, 2017, the employer entrusted a law firm to send a letter to the contractor, saying that both parties must perform their contractual obligations according to the contract.
After the signing of the contract involved in this case, the steel price rose, but the rise is a gradual evolution process, not a sudden change process that caught the market subject off guard.
3.
The employer brings a lawsuit.
The court of first instance held that if a party fails to perform its contractual obligations or fails to perform its contractual obligations in accordance with the agreement, it shall bear the liability for breach of contract such as continuing to perform, taking remedial measures or compensating for losses.
After that, the two sides signed a construction contract for the project involved.
Claims: 1.
There is no basis for terminating the contract on the grounds of the rise of material price, and asked the contractor to ensure the construction on April 1, 2017.
