1、 Interpretation of the Law by the Hunan High Court and the Supreme Court Chenzhou Intermediate People’s Court of Hunan Province (the court of first instance) decided that the actual constructor (Zhang Xinping) should give his contract to Anren County ×× Buildings A and B of the building enjoy the priority of compensation for the project discount or auction price within the scope of project price.
The court upheld the judgment of the first instance that Zhang Xinping had priority in paying the project discount or auction price.
It is correct that the judgment of the first instance finds that the construction contract involved in the case is invalid.
This point of view is only for readers’ criticism and reference.
Source: Supreme case, legal circle of construction real estate; Author: Chen Minghe, Lv Kedi Editor’s Note: On September 27, 2022, “China Judicial Documents Network” released the civil judgment of “Supreme Farming No.
The Supreme Court ruled that Zhang Xinping, the actual constructor, has the priority to be compensated for the civil engineering project involved in the construction within the scope of the project price.
This paper argues that this judgment of the Supreme Court has no legal basis, is contrary to the mainstream view, and violates the relevant laws and regulations, which should be a mistake.
The price of the construction project shall be paid in priority by the project discount or auction price”, Zhang Xinping shall enjoy the priority of compensation from the project discount or auction price involved in the case.
2、 Determination of Zhang Xinping as the actual constructor of the case Hunan High Court (the court of second instance) determined in the case that the case involved the civil engineering general contracting project, and three Hunan Construction Project Construction Contracts were signed in the case, among which Zhang Xinping and the employer Luo Chenghu were the contractors of the construction contract on October 29, 2016, and Xinjing and the employer Chenghu were the contractors of the construction contract on March 18, 2016 and April 1, 2017.
(2) an unqualified actual constructor borrows the name of a qualified construction enterprise;……”, The case involves three Hunan Construction Project Construction Contracts, which shall be deemed invalid according to law because they are contracted by unqualified individuals in the name of qualified construction enterprises.
Zhang Xinping has signed the Internal Contract Agreement with Xinjing Company after his construction contract, but he has no legal labor relationship with Xinjing Company, and he is not a project manager or official employee of Xinjing Company.
The employer, the contractor and the actual constructor had no objection to this, and the court upheld it.
It can be seen that the project involved in the case was actually Zhang Xinping’s obligation to undertake the project, and Xinjing Company did not perform the corresponding obligations according to the contract.
In the second instance of the case, Zhang Xinping admitted that the purpose of signing the Internal Contracting Agreement was to build with the qualification of Xinjing Company, which was recognized by Chenghu Company.
According to Article 26 of the Construction Law of the People’s Republic of China, “construction enterprises are prohibited from contracting projects in any form in the name of other construction enterprises.
Construction enterprises are prohibited from allowing other units or individuals to use their qualification certificates and business licenses in any form to contract projects in the name of their own enterprises”; Article 1 of the original Interpretation of the Supreme People’s Court on the Application of Law in the Trial of Disputes over Construction Contracts for Construction Projects stipulates that “a construction contract for construction projects shall be deemed invalid in accordance with the provisions of Article 52 (5) of the Contract Law if it is under any of the following circumstances:……
Although the construction contract in this case is invalid, based on the fact that the priority of compensation lies in the guarantee of the subject matter of the completed project price, which arises simultaneously with the payment obligation of the Employer, the invalidity of the contract does not affect the Contractor’s right to claim the project funds from the Employer according to the construction contract, and therefore does not affect the enjoyment and exercise of the Contractor’s priority of compensation.
The Supreme Court (retrial court) held that Zhang Xinping, the actual constructor, had the priority to be compensated for the project discount or auction price involved in the case within the scope of the project price owed by Chenghu Company, the employer.
Hunan High Court (the court of second instance) believed that the actual constructor Zhang Xinping had directly signed a construction contract with the employer Chenghu Company for the project involved in the contract, which directly formed a relationship of rights and obligations between the two parties.
The Hunan High Court ruled that Zhang Xinping, the actual constructor, has the priority of compensation for the civil engineering project involved in the construction within the scope of the project price.
In the aforementioned construction contract with Zhang Xinping as the contractor, it is agreed that when Zhang Xinping advances funds for construction until the project houses are delivered for use, in the two construction contracts with Xinjing as the contractor, it is agreed that the progress payment shall be paid in accordance with the agreement on the same period of measurement and the same period of measurement.
According to the judgment, the Supreme Court has no objection to the fact that the Employer (Chenghu Company), the Contractor (Xinjing Company) and the actual constructor (Zhang Xinping) have the priority to be compensated for the project discount or auction price within the scope of the project price owed by the Employer, The actual constructor will be judged to enjoy the priority of compensation for the project involved within the scope of the project price.
The current construction project has passed the acceptance, According to Article 286 of the original Contract Law of the People’s Republic of China “If the contract letting party fails to pay the price as agreed, the contractor may urge the contract letting party to pay the price within a reasonable period of time.
If the contract letting party fails to pay the price within the time limit, the contractor may negotiate with the contract letting party to discount the project, or apply to the people’s court to auction the project according to law, except that it is not suitable to discount or auction the project according to the nature of the project.
Therefore, Zhang Xinping, as the actual constructor of the case, is an unqualified individual who borrows the name of a qualified construction enterprise to contract for construction..
and Other Construction Projects”, the date of which is September 15, 2022.
168″, namely, “Civil Retrial Civil Judgment on Construction Contract Disputes of Zhang Xinping, Anren Chenghu Shanglian Real Estate Development Co., Ltd.
