On The Legal Issues Of The Claiming Against Developer By Actual Constructor

Illegal subcontracting of the entire or part of construction project is very common in our country. Since there does not exist any contractual relationship between the actual constructor and the developer, the previous judicial practice did not have a uniform ruling with regard to whether the actual constructor has the right to sue against the developer while the developer fails to pay the contract price. Nonetheless, the current judicial opinion of the Supreme People's Court upholds that the actual constructor has the right to sue against the developer in such case. Hence, the existing of different understanding of this power gives rise to confusion about how to deal with such cases at present stage. This article is going to make it clear by way of jurisprudential analysis that the legal nature of the right by which the actual contractor can sue against the developer is the right of subrogation of the creditor and then further explores the legal issues in relation to the exercise of such right of subrogation. This article has three parts, i.e. foreword, main text and conclusions.The main text contains five chapters.The Chapter One gives a summary of the current judicial practice about the actual constructor suing against the developer and then comes to the conclusion through analyzing several opinions in this respect that it is the right of subrogation of the creditor that gives rise to the power by which the actual contractor can sue against the developer.The Chapter Two analyzes, based on the rationale of the right of subrogation and the distinctiveness of the construction contracts, the prime conditions on which the actual constructor exercises its right of subrogation and the scope of the right of subrogation. This chapter also explores the issues in relation to whether the priority of claims and the subrogation right could be subrogated and whether the migrant-worker has the power to sue against the developer.The Chapter Three discusses the issues regarding the procedure under which the actual constructor sues against the developer. It maintains that the lessor or illegal assigner of project shall act as the third party without independent claim or the plaintiff in accordance with the different circumstances; the action based on right of subrogation and the action based on the construction contract may be tried combined;and then it analyzes the relationship between the action of subrogation right and the arbitration, also other issues upon whether the litigation rights of the parties are special etc.The Chapter Four deals with the civil liabilities of the developer. Through the analysis of the obligations of the developer, it comes to the conclusions that the obligations of the developer shall be its own obligations rather than the substitute obligations and the developer and the lessor or illegal assigner of project shall not assume the joint and several liabilities among themselves and then it emphasizes that the obligations of the developer and those of the owner of the construction project shall be distinguished.The Chapter Five proposes that the system of the subrogation right of our country should be amended to an appropriate extent and in the meantime suggests that the judicial opinion of the Supreme People's Court shall clearly defines the nature of the right of the actual constructor suing against the developer and the restrictive conditions to do so as well.