Explore The Construction Project Loan Preference

To solve the problem, the project arrears frequently arising in the construction sections, The Article 286 of Contract Law endows project fund with preferential right of payment. In practice, because of the imperfectness of the legal regulations, there exist many puzzles involving the nature of preferential right of project payment, and the payment sequence from when the right conflicts with other rights. To solve these problems practically, I will thoroughly discuss the preferential right of project payment in the aspect of legal regulation's fairness & justness.The paper includes three main parts. The first one precisely defines the connotation of project fund, followed by distinguishing the two kinds of project fund respectively subjected to the preferential right of project payment and Construction Industry. After that, it confines the contractor's legal mortgage to project final account of its completion within the conception of project fund. Based on disclosing the bad situation on project fund, it probes into the law ground on which the project fund can preferably accept the compensation, emphasizes that preferential right of project payment possesses the legal mortgage's characteristics but is not thought as a kind of mortgage, and further list out ways to removing the obstacles stemming from the misunderstanding, after that provide the evidence including lien in preferential right of project payment and also preferential right's characters.The second part primarily makes sure that project fund is provided with priority to accepting compensation, with that centers on debating series of problems since declaring the preferential right of project payment because of law regulations' imperfectness, as follows: Firstly, by analyzing cases in details, the phenomenon of declaring preferential right of project payment has bring about huge strikes to bank industry not because of preferential right of project payment of itself, and because of the imperfectness of law regulations about it. Secondly, the paper interprets the conflicts occurred or possibly occurring, ordinarily existing among the contractor's legal mortgage and obligatory right with commonweal nature something like customers' right to obtain houses, bankruptcy enterprises' employee wages, points outthe imperfectness aspects of our law regulations, and further provides a guidance for law regulations' development and institutional framework.The third part mainly involves making the plans about effectively forming the institution of preferential right of project payment, based on the contents of two parts above. At the beginning, it suggests introducing the system of advanced register into the field of preferential right of project payment. The advanced register possesses the property of real right, not obligatory right. Without mixing up the boundary, whether registers or not, between legal mortgage and negotiated mortgage, the use of advanced register system different from regular register can maintain the principle of real right change's publicity. Meanwhile, advanced register's role uniquely confines to ruling out the request of other stakeholders, that is, it is not necessary for project payment to take effect. Next, the paper points out the unreasonable aspects in law regulations which currently permit the use of advances in preferential right of project payment, by analyzing the advances at length concludes that it is unfit for the contractor's legal mortgage and provide some advice for overcoming these advances that occur frequently in practice. Finally, it analyzes the important aspect neglected in preferential right of project payment, and insists that it should give place to special obligatory rights when conflicts occur between them, aiming at making relevant laws sound more and more.