Research On The Law Applicable To Contracts Of Invalid Construction Project

Driven by speeding infrastructure development, building industryis entering an era of unprecedented prosperity, and is now playing animportant role in Chinese national economy. Because of high profitreturns and growing demand, construction market is attracting a largenumber of enterprises. While significant achievements have been madein the building industry, many problems resulting from the violationof legal procedures cannot be ignored: circumvent and shill bidding,jobbery and maliciously underselling; loaning qualifications,subcontracting and illegal subcontracting becoming more common.Moreover, huge construction spending, long construction period anddemanding technical expertise, all add up to a large number ofdisputes over the validity of the contract. Behind these acts mightexit some so-called hidden rules that can degrade social conduct, increase unreasonable expenditure and bring potential risks to thequality and safety of the project.According to Article1and Article4set forth in <Interpretationof the Supreme People’s Court on issues concerning the understandingand application of construction contract>(Hereinafter refer to as<Judicial interpretation>), five types of construction contracts areinvalid. The purpose of this article is to analysis the validity ofconstruction contract, and to summarize the study and application ofjudicial theory and practice, therefore, provides some basics fortheir further applications.This article starts from five types of invalid constructioncontracts, to give analysis of prohibitions, improvements and legalregulations; to elucidate the cognizance and Law Application forinvalid confirmation of construction contract according to judicialpractice; finally, based on the <Judicial interpretation>, to supplyjudicial interpretation of the invalid content of the contract and tosuggest improvement.