The Study Of Legal Strategies On The Project Payment Default

Construction industry is the foundational industry in our country, which takes a key effect in the whole economic development. However, the default on construction payment has been a common problem in project industry for a long time, which has affected the development of construction industry seriously, and hindered the economic development also.The paper is based on deep investigation, a large amount of information finding, and others' researching achievements. It also follows a basic process of proposing problems, analyzing problems and solving problems. The study starts from theoretical principles, practices and laws. Firstly, project payment default is defined in legislative category. The project can be classified as public project and non-public project. Then, the characteristics of current situations on the problem is demonstrated, especially in Hubei province: complicated debt chains, with wide range and long periods. The essential problem of project payment default is violations and even illegal activities. Secondly, the paper tries to discover the reasons of project payment default on the basis of Informational Economics and Game Theory. The reasons include internal relations between parties of contact of constructive project. For example, the lacking of repeat game mechanism, the time lag of the formation of the project and the payment of it, lack of law consciousness of construction industry enterprise. There are some external reasons, such as the problems of law and mechanism, the lack of contract credit in construction industry, the lack of punishment for fraud, disequilibrium of relation between market supply and demand in construction industry, and the omission of government supervision.Lastly, the paper puts forward some relevant settlements. Firstly, learning from the overseas advanced experiences, to set up Employer Payment Guarantee System in order to balance the status on contract definition phase. In the phase of obligation of contract, to master the skills of using the counterplea right and subrogation right. When breaches of contract happened, the contractor should seek redress in the law courts. When the party issuing contract fail to pay, the last remedy is using the priority to receive payment on construction work. Additionally, for the unique feature of public project, the advice is perfecting the Agent Construction system, then perfecting the reform of management system of public project, and settling the problems of project payment default. Finally, for improving the level of enterprise management and enhancing the credit environment of construction, several measures are proposed in this paper.