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Legal risks and preventive measures in the signing stage of construction project contract
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  • Categories:Technological
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  • Time of issue:2021-09-01 20:58
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(Summary description)

Legal risks and preventive measures in the signing stage of construction project contract
Top

(Summary description)

  • Categories:Technological
  • Author:
  • Origin:
  • Time of issue:2021-09-01 20:58
  • Views:
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Legal risks and preventive measures in the signing stage of construction project contract

The legal risk in the signing stage of construction project contract is mainly reflected in two aspects: one is the risk formed by signing the contract, that is, signing the contract that should not be signed; The second is the risk formed by the contract terms, that is, the risk formed due to the imprecise, incomplete, unequal and uncontrollable terms. Then do a good job in risk prevention. From the perspective of construction enterprises, we can pay attention to the following nine aspects:

1、 Risk and prevention of invalid contract

[risk point] the signing subject does not have corresponding qualification, which makes the signed construction contract invalid, has no binding force on both parties, and cannot be investigated for breach of contract. In case of affiliation, subcontracting, illegal subcontracting or undertaking projects beyond their own qualifications, they will face administrative penalties from the competent administrative department.

[preventive measures] as a construction enterprise, it shall try to avoid undertaking projects without qualification, exceeding qualification or borrowing qualification. We should fully understand the legal consequences of invalid contract, actively take measures to correct the effectiveness of the contract and control risks.

2、 Risk and prevention of the employer's insufficient performance ability or bad reputation

[risk point] the employer's insufficient performance capacity will lead to the failure of the normal performance of the contract, and even the incomplete completion of the project due to the difficulty in paying the project fund, resulting in serious losses and reputation damage to the construction enterprise.

[preventive measures] review whether the funds required by the employer for construction have been or may be implemented, and whether the performance guarantee has been provided; Query the operation of the employer through the national enterprise credit information publicity system to find out whether there is a bad credit record. Through qixinbao, China judicial documents network, China execution information disclosure network and other platforms, query their litigation and execution, and whether they are listed as dishonest Executees.

3、 Risk and prevention of unclear agreement on project contracting scope

[risk point] the agreement on the scope and content of the contract is unclear, which leads to disputes in the process of contract performance, and even makes the contract impossible to perform.

[preventive measures] the scope and content of the contract shall be jointly defined by the designers, technicians and cost personnel; The contract scope and content shall be agreed in combination with drawings and bidding documents.

4、 Risk and prevention of unclear or non-standard project quality agreement

[risk point] the non-existent excellent quality standard is agreed as the acceptance standard, and the award applied by the construction unit is agreed as the acceptance standard, resulting in the failure to pass the completion acceptance after the completion of the project, resulting in disputes over quality breach of contract or settlement of project funds.

[preventive measures] the quality standards shall be clearly agreed, and the specific national, local and industrial quality standards shall be agreed as the quality acceptance standards as far as possible, so as to avoid agreeing on unclear or other non-standard award standards.

5、 Risk and prevention of unclear agreement on price terms and price risk range

[risk point] the pricing basis and pricing method are unclear, so it is difficult to determine the settlement basis of project funds; The contract price risk scope is unclear, or although it is agreed, the specific adjustment method is not clear, which affects the project fund income of the construction enterprise and is prone to disputes.

[preventive measures] the price form shall be clearly agreed as far as possible in the "special conditions of contract". Whether unit price contract or total price contract is adopted, the risk range included in the price and the calculation method of risk fee shall be agreed, and the adjustment method of contract price beyond the risk range shall be agreed. The adjustment caused by market price fluctuation and the adjustment caused by changes in laws and policies shall be clearly agreed.

6、 Risk and prevention of unclear agreement on project payment terms

[risk point] the project progress payment is usually paid monthly or according to the project progress, but there is often a lack of agreement on how to apply for appropriation, what documents to submit, how to review and confirm the appropriation amount, and how to deal with the inconsistency between the two parties on the appropriation amount of progress payment, resulting in disputes and affecting the construction of the project.

[preventive measures] 1. Specify the calculation standard and payment time of progress payment and the liability for breach of contract if the employer fails to pay as agreed. 2. The review procedure of progress payment application form shall be agreed, and the time for the employer to approve or raise objections and the legal consequences of failing to complete the review and raise objections within the time limit shall be specified.

7、 Risk and prevention of unclear agreement on project acceptance and settlement

[risk point] disputes arising from unclear project acceptance and settlement agreements or chaotic procedures; In the construction contract, the reply time limit after the submission of the project settlement report was not specifically agreed, resulting in the delay of settlement.

[preventive measures] 1. Specify the time limit, procedures and acceptance data requirements for completion acceptance, and specify the settlement time limit, method and settlement amount confirmation after acceptance; 2. Specify the reply period after the submission of the project settlement report; 3. Further clarify the legal consequences of overdue reply; 4. In the special terms, it is clearly agreed that failure to reply beyond the reply period shall be deemed as acceptance of the price specified in the project settlement report.

8、 Risk and prevention of unclear or excessive agreement on liability for breach of contract

[risk point] the contract does not stipulate the specific amount of liquidated damages or the calculation method of loss compensation caused by breach of contract. In case of breach of contract, there is no clear standard for the application of the terms of breach of contract, which is prone to disputes and is not conducive to protecting the interests of the observant party; If the liquidated damages are too high and there is no agreed maximum limit, the breaching party may bear too high liquidated damages.

[preventive measures] 1. First, specify the specific liability of the employer for breach of advance payment, project progress payment and completion settlement; 2. The specific amount or calculation method of liquidated damages and compensation shall be specified; 3. For its own liability for breach of contract, agree on a reasonable amount of liquidated damages and set the clause of maximum amount of liquidated damages; 4. Avoid repeatedly setting two or more liabilities for breach of contract for the same act or fact.

9、 Risks and precautions of unclear or invalid dispute resolution clauses

[risk point] improper agreement of dispute terms may lead to invalid agreement, even increase litigation cost, extension of dispute resolution period and other adverse consequences.

[preventive measures] 1. It shall be clearly agreed to choose the dispute settlement method of arbitration or litigation, so as to avoid agreeing on two methods at the same time; 2. If arbitration is selected, it shall be in writing and the name of the arbitration institution shall be accurately agreed; 3. If litigation is selected, it can only be under the exclusive jurisdiction of the court where the project is located. (legal department)

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