Legal Analysis Of "formal And Substantial Contracts" In Construction Projects

The phenomenon of"Formal and Substantial Contracts"exists intensively in China's construction projects market where the law of compulsory bidding must be followed. As a method to avoid the restriction by laws and administration supervison, it is the result of game between both parties. Opinions often conflict in judicial practice concerning the validity and settlement of"Formal and Substantial Contracts".The thesis begins from the definition of"Formal and Substantial Contracts"by explaining the definition,features, causes, harm and forms of the"Formal and Substantial Contracts". Further more, validity of"Formal and Substantial Contracts"is analyzed through category and comparison. Conclusion is also made on the legal provision of settlement of dispute related to"Formal and Substantial Contracts". Finally, this thesis accomplishes the systemic research on"Formal and Substantial Contracts".The thesis composes of four chapters.Chapter One is the overview to clarify the definition of"Formal and Substantial Contracts". In persuit of unjustified enrichment from compulsory construction project bidding, the parties enter into one or more sets of contract for the same project which major contract terms such as project cost are inconsistent with the previously signed contract awarded. This is also known as the"Black and White contracts"or"Recorded ond Non-recorded Contracts". The defination, features of"Formal and Substantial Contracts"is discussed. Moreover, the causes of"Formal and Substantial Contracts"is set forth from both subjective and objective sides, conveiling the risks and harm. Chartper One ends with the different forms of"Formal and Substantial Contracts"defined by the time node of successful bid.Chapter Two undertakes to discuss the validity of"Formal and Substantial Contracts". Following the principle of establishment and effectiveness of contract, validity of"Formal and Substantial Contracts"is analyzed respectfully if malicious collusion between the parties exists.Chapter Three analyzes the difference tween"Formal and Substantial Contracts"and contract alternation. This has been a difficulty in judicial practice all along.Chapter Four explains the formality of Article 21th of"Judicial Inerpretation of Supreme Court on Construction Project Contract"by recalling the legislation history of"Formal and Substantial Contracts". The position and value of Article 21th is evaluated from three aspects such as"Not to decide the validity","regarded as the basis of settlement"and the positive impact on judicial practice.