Subcontract Analysis On Construction Contract Dispute Case

Without qualification or beyond qualification, borrowing others’ qualificationsigning construction contracts is in violation of the "construction law" about theprohibited provisions about construction quality in construction law, however, thesupreme court interpreted that if the construction is accepted but the contract isinvalid, the contract price shall be paid in terms of construction contract, if theessence is null and void, the contract is treated effective, it will avoid the legislativepurpose of the" construction law" about the construction quality,which will causeconstruction market disorder and the lack of unity in legal application. The case onHotel construction contract dispute of Feng Dunjing v. Kun Lun, the trial court andthe court of second instance identified that the contract was invalid but the verdict isdifferent, the first instance court found that the contract is invalid emphasizing thecontractor was not qualified, but it avoided the reason that whether anchored orsubcontract problems lead to be invalid, after project quality was accepted, the firstinstance court denied the priority right to be repaid of the contractor and liquidateddamages which the contractor demanded the party awarding the contract because ofthe deferred payment, the second instance court found that signing the constructioncontract taking the method of " anchored" is null and void, but after the projectquality was accepted, the process of handling the problems of the priority right andthe liquidated damages had avoided the validity of the contract,and it is actually avalid contract. The issues of this case are as follows: first, the identification andtreatment on the contract of without qualification or beyond qualification. Second, theevidence identification of and the allocation of the burden of proof in the project pricesettlement. Construction is through labor making materials into the object, after theanalysis,the treatment of invalid construction contract should be:it is followed thebasic principles of the valid contract,combining the construction characteristics,adhering to the property returns in accordance with the cost accounting, determiningthe bear of obligation in accordance with the principle of fault, banning illegalprofit and so on, which unified the judicial application. The another key point is thatis it binding when the contract is invalid in which the provision about settlement bookwhich interprets that no any objection to the settlement book or no reply to it will bedeemed validity of the settlement book. At the same time, it is the key point to differ the verdicts of the first instance court and the second instance court. It is obvious thatthe court has large discretion in the judgment of the allocation of the burden of proofand evidence certificate dint. In the construction market which dominated by the partyawarding the contract, contractor will have the legal risks in the construction andperformance of the contract process, and should pay attention to informationcollection and preservation of evidence, and seek legal relief when the right isinfringed.