Study On Invalid Construction Contract

Based on the practical cases in the identification and handling of invalid construction contracts,this paper studies the application of the contract invalidation system in the field of construction contract.From the perspective of the relevant legal norms,rules and the variation tendency of theories,this paper leads a systematic study of invalid construction contracts,and further proposes practical and effective institutional recommendations which to resolve the contradictions in judicial practice and maintain the construction market order to promote the healthy development of the business.The main points of this paper are as follows.First,in our country's current social and legal environment,to maintain the stability of the contract and transaction efficiency,guarantee the autonomy of the parties,reasonable balance social and public interests and the rights and obligations in the relationship between the parties to a contract,the people's court should follow the guidance of proportional principle when identifying whether a construction contract is void,and establish contract effectiveness value judgment standards as the construction engineering quality and safety as well as construction market fair competition order and social public interests,to further limit the scope of invalid construction contracts.When identifying the validity of a construction contract,we should take the invalidation system of legal ACTS as the theoretical guidance,form a unified judicial judgment rule,prevent the phenomenon of "different judgment in similar cases" which damaging the judicial credibility,and guide the correct behavior of the contract subjects.Second,under "project payment settled with reference to the contract " processing rules in the ”Judicial Interpretation of Construction Project(1)” on invalid construction contracts,the nature of the project price which as settlement reference is the "value" of discount compensation in the invalid contract,rather than the contract consideration in accordance with effective contract.Losses caused by fault in the performance of an invalid construction contract by both parties should be deemed as the "impairment" of the discount compensation value(in the case of the contractor's fault)or the exemption of the other party's liability(in the case of the developer's fault),and should be deducted with reference to the contract.Third,the exercise of priority compensation for the construction project price stipulated in the contract law should be based on the validity of the construction contract,and the contractor of the invalid construction contract should not enjoy the priority of the project.Fourthly,as the construction subject who has no direct contractual relationship with the developer,the actual builder can take the subrogation system as the legal basis for his right of action against the developer and exercising the project priority.In addition to the introduction and conclusion,this paper consists of five chapters as following:The introductory part firstly raises the problem and analyzed current situation of construction engineering in China,under which a large number of construction contracts are deemed to be invalid.This situation is inconsistent with the principle of private law autonomy,and is not conducive to protecting the rights and interests of stakeholders and the public interest,and even hindering the development of the construction industry.Secondly,the innovation points are summarized by analyzing the academic and practical value of this paper.Thirdly,the writing ideas and plans are discussed in this part based on current research status of both domestic and overseas.Finally,this part briefly explains the research methods and the advantages in well studying key topics of this paper.The first chapter is the analysis of the causes and the judicial dilemma of the invalid construction contract.Beginning with definition of the connotation and extension of construction contract to clarify the research contents,it also interprets the reasons for using the concept of invalid construction contract in this paper.At the same time,this chapter further points out the particularity of the invalid construction contract in the identification and treatment.Based on this,the causes of the invalid construction contract are analyzed,which are rooted in the inadequacy of relevant legislation,the effects of the mixture of public and private law,the lack of administrative functions and the confusion of the contract management system.Finally,it points out the difficulties faced by the judiciary in identifying and handling invalid construction contracts.The second chapter is one of the key points,which mainly studies the general identification rules of invalid construction contracts.This chapter focuses on constructing the theoretical paradigm for determining the invalidity of the construction contracts.Based on the relevant theories of the effectiveness of civil juristic acts,combined with study and judgment of the existing rules in the comparative law,a comparative analysis of the evolution of the relevant rules for the invalidity of the construction contract in China is bring up and points with universality are summarized.Seeking the theoretical support for the conflicts and issues existing in current identification rules of contract invalidity in China is also mentioned.Finally,combined with the origin of China's construction law,the main factors of invalid construction contracts are investigated,and the types of invalid construction contracts are explained.The third chapter analyzes and summarizes the issues related to the validity of some construction contracts with great disputes from the perspective of practice.The promulgation of the “Judicial Interpretation of Construction Project(1)” classifies the invalid construction contract,which facilitates the judge's identification of the invalid construction contract and has achieved good results.However,there are still many problems in the application of judicial interpretation,such as lack of written form,contracted projects at price below cost,twin-contracts,“affiliated”,the judgement of effectiveness for those construction contracts concluded without building permits,All of which still troubles judicial officers and becomes the focus and difficulty in the trial of construction contract disputes.Based on the general rules proposed in Chapter 2,this paper interprets and responds one by one,and proposes a unified and operational specific rules.The fourth chapter studies the legal consequences of invalid construction contract from the combination of theory and practice.Under the guidance of current contract invalidation theory,this chapter summarizes,abstracts and analyzes the numerous judgment rules established by judicial organs in the handling of invalid construction contracts.Comprehensively evaluating the application of rules from the overall perspective of development,and proposing more reasonable and effective rule system are the features of this chapter.With the rules established in the “Judicial Interpretation of Construction Project(1)”,which calculating the discount compensation by the “reference contract”,the policy orientation and judicial concept embodied by the judicial organs are clarified,and suggestions for judgment rules are proposed on how to apply the loss compensation system in invalid contracts.The fifth chapter studying the special system in the invalid construction contracts,consists of two parts:One of them is to analyze whether the priority of construction projects should be affected by the effectiveness of the contract,based on the study of the nature and function of the article 286 in contract law.In second part,it well studies the “actual builder” in the actual builder system proposed in the “Judicial Interpretation of Construction Project(1)”,in order to seek the legal basis for the actual builder's right to appeal to the developer and how to apply priority of construction projects.The final part is the conclusion,which makes a review and summary for the maincontents and key points of view.In this chapter,it puts forward some suggestions on the improvement of the judicial application regarding the identification and handling of invalid construction contracts.Specifically,at first,facing continuous development of construction industry policy,relevant construction legislation should be actively responded and adjusted.Secondly,the judicial authorities should not go beyond legislation when judging the effectiveness of construction contracts.Their focus should be on both judicial technology and deep understanding of relevant legal principle.Thirdly,due to the far-reaching influence of judicial procedures on the rights and interests of entities,it is also an important issue that cannot be avoided how to achieve the connection between judicial power and engineering appraisal system in the pre-judgment of the effectiveness of construction contracts,and how to achieve the connection between execution procedures and substantive judgment.