In practice, the reason why there is a dispute about how to calculate the discount compensation when the construction contract of the construction project is invalid but the project is completed and delivered for use is that the provisions of the first paragraph of Article 793 of the Civil Code are not accurately understood.
Under the premise of ensuring the quality of the construction project, this method can ensure that both parties can not obtain benefits beyond the validity of the contract from the invalid contract, which is in line with the reasonable expectations of the parties and the reality of the construction market in China, and can ensure the social effect of the case judgment.
The main reason is that the first paragraph of Article 793 of the Civil Code of the People’s Republic of China (hereinafter referred to as the Civil Code) stipulates: “If the construction contract of the construction project is invalid, but the construction project has passed the acceptance, the contractor can be compensated at a discount according to the agreement on the project price in the contract.” According to the above provisions, the construction contract of the construction project is invalid, but the project is completed and delivered for use, The contractor shall calculate the discount compensation according to the contract agreement on the project price.
1、 If the construction contract of a construction project is invalid but the project is completed and delivered for use, the discount compensation shall be calculated according to the agreement on the project price in the contract (Minutes of the 22nd meeting of professional judges of the First Civil Court of the Supreme People’s Court in 2022).
2、 The contractor does not enjoy the priority right to be paid for the construction project price for the illegal construction (Minutes of the 21st Professional Judges’ Meeting of the First Civil Court of the Supreme People’s Court in 2021) Legal issues: Does the contractor enjoy the priority right to be paid for the construction project price for the illegal construction? The judges’ meeting held that the system of priority right of payment of construction project price is to pay off the construction project price creditor’s rights enjoyed by the contractor in priority with the construction project discount or auction price, so the premise for the contractor to enjoy the priority right of payment of construction project price is that the completed construction project can be circulated according to law.
3、 The actual constructor does not enjoy the priority right to be paid for the construction project price (Minutes of the 21st Professional Judges’ Meeting of the First Civil Court of the Supreme People’s Court in 2021) Legal issues: Does the actual constructor enjoy the priority right to be paid for the construction project price? According to the opinion of the judge’s meeting, the actual constructor does not have the priority to be paid for the construction project price.
Because the illegal buildings are not suitable for discount and auction, the contractor does not enjoy the priority right to pay the construction project price for the illegal buildings.
The agreement between the two parties in the contract to a certain extent represents the reasonable expectations of the two parties for the signing and performance of the contract and the pre-arrangement of the relevant contract risks.
According to the provisions of 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 Applicable Legal Issues in the Trial of Disputes over Construction Contracts of Construction Projects (I), only the contractors who have concluded construction contracts with the Employer can enjoy the priority of compensation for the construction project price.
The actual constructor does not belong to the “contractor who has concluded a construction contract with the Employer”, and does not enjoy the priority of compensation for the construction project price.
.
Legal issues.
In the case that the construction contract of the construction project is invalid and there is no more scientific, reasonable, simple and effective discount compensation standard, It is quite reasonable to compensate the contractor at a discount according to the agreement on the project price in the construction contract of the construction project.
If the acceptance is qualified, the Employer shall pay the price and accept the construction project as agreed.
The main reason is that according to the provisions of Article 807 of the Civil Code of the People’s Republic of China, the condition for the contractor to enjoy the priority of compensation for the construction project price is that the construction project should be discounted and auctioned.
If the construction contract of a construction project is invalid but the project is completed and delivered for use, what standard shall be used to calculate the discount compensation? The judge’s meeting held that the construction contract of the construction project is a contract that the contractor carries out the project construction, delivers the work results, that is, the construction project, and the contract letting party pays the price.
The main reason is that the priority right to be paid for the construction project price refers to the right of the contractor to negotiate with the contract letting party to discount the project or request the people’s court to auction the project according to law, and to have priority to be paid for the project price or auction price when the contract letting party fails to pay the project price within a reasonable period after being urged by the contractor to pay the project price.
After the completion of the construction project, the Employer shall carry out the acceptance in accordance with the contract and the construction acceptance specifications and quality inspection standards issued by the State.
The construction of the construction project has certain periodicity and complexity.
Although the first paragraph of Article 793 of the Civil Code uses the expression “can be referred to”, if there is no large-scale design change in the project construction, or there is no serious violation of the true meaning of the parties in the contract, the people’s court should not arbitrarily interpret “can be referred to” as can be referred to or can not be referred to in the specific judgment.
If the Employer does not organize acceptance in accordance with the contract and the corresponding specifications or standards, but accepts the construction project, the construction project shall be deemed to be qualified according to the provisions of Article 9 and Article 14 of the Interpretation of the Supreme People’s Court on the Legal Issues Applicable to the Trial of Construction Contract Disputes (I).
