If the employer fails to pay within the time limit, the contractor may, in addition to the fact that the nature of the construction project is not suitable for conversion or auction, negotiate with the employer to convert the project into price, or request the people’s court to auction the project according to law.
Article 35 of the interpretation of the Supreme People’s Court on the application of law in the trial of disputes over construction contracts of construction projects (I) if a contractor who has entered into a construction contract with a contract letting party requests that the price of its construction project be paid preferentially in accordance with the provisions of article 807 of the civil code, the people’s court shall support it.
If the employer fails to pay the price as agreed in article 807 of the civil code of the people’s Republic of China, the contractor may urge the employer to pay the price within a reasonable period.
The price of the construction project shall be paid in priority from the price converted or auctioned by the project.
The actual constructor does not belong to the “contractor who has concluded a construction contract with the employer” and does not have the priority to be compensated for the construction project price.
The right of priority to be compensated for the construction project price refers to the right enjoyed by the contractor to negotiate with the employer to convert the project into price or request the people’s court to auction the project according to law, and to have priority to be compensated for the project converted into price or auction price when the employer fails to pay the project price within a reasonable period after being urged by the contractor to pay the project price.
According to Article 807 of the civil code of the people’s Republic of China and Article 35 of the interpretation of the Supreme People’s Court on the application of law to the trial of disputes over construction contracts of construction projects (I), only the contractor who has entered into a construction contract for construction projects with the employer shall have the priority to be compensated for the construction project price.
The 21st judges’ meeting of the first civil division of the Supreme Court in 2021 held that the actual constructor does not have the priority to be compensated for the construction project price.
In the trial practice, there are different understandings about whether the actual constructor has the priority to be compensated for the construction project price.
Source: for more professional legal advice from the first civil division of the Supreme Court, please call konglingkang’s lawyer at 13518725183 [disclaimer]: konglingkang, a criminal defense lawyer in Kunming, Yunnan.
