Setting Force Majeure Terms Of Engineering Project In Perspective Of Contract Efficiency Improvement

At this stage,the impact of force majeure on the construction project should not be underestimated.Once the event of force majeure happened,it will result in obstacles to the performance of the contract,and reduce contract efficiency.Efficient contractual terms often lead to a return from an inefficient path to an efficient path.Force majeure terms can reduce the obstacles to implementation of the contract caused by force majeure.For the vagueness and incompleteness of the force majeure terms at present,if both sides of the contractor invoked the force majeure terms causing the contract dispute,this kind of situation further caused the disputes and affected the contract efficiency.In view of this,this paper take improving the efficiency of the contract as the main line,making study on force majeure terms.First of all,this paper argues the realization of contract fairness can effectively promote the contract efficiency and achieve Pareto efficiency improvement.Based on this view,this paper insist the principle that bearing their own losses caused by force majeure,and improved the risk-sharing terms of force majeure in the 13 th edition of the Contract Model in order to reduce ambiguities in contract terms and inconsistencies with other documents.This paper proposed a view that those who default will not get the benefits and drawing up a contract according to regulations is a choice adapt to the Chinese market environment at present.Secondly,this paper establish the improvement path to optimize contract terms,according to one basic idea that reducing the transaction cost is to improve the efficiency of the contract.Through the study of force majeure terms,this paper clarified the intension and extension of force majeure,established a risk library of force majeure to reduce dispute;Through setting non-force majeure terms and restricting force majeure notification to supplementary contract gap and reduce transaction costs.Finally,this paper proposed when the purpose of the contract cannot be achieved because the contract is frustrated by force majeure,the termination of the contract is the best choice to the parties to the contract.Once the force majeure causes the contractor to lose seriously and chose to breach the contract,in order to prompt the contractor to continue the contract and saving their own cost and the community resource,the Employer will make moral compensation to the Contractor,in this way could also achieve Kaldor-Hicks efficiency and further improving contract efficiency and social efficiency.This paper introduces the theory of transaction cost and contract efficiency to research the improvement of force majeure terms,from the realization of Pareto efficiency improvement to promoting the Kaldor-Hicks efficiency,this paper provides a reference for enhance the efficiency of setting terms of contract.