Discuss On The Integrity Pacts Related To Underlying Transactions

The transaction-related type of Integrity Pacts refer to an agreement signed by an equal subject of civil and commercial transactions in connection with the underlying transactions being carried out or to be carried out by the parties,its content generally includes the provisions of the obligation of integrity and the liability for breach of the integrity obligation.In China,this type of Integrity Pacts was first seen in the field of construction project contracting,then gradually expanded to apply to other areas of trade in goods and services,and developed into two basic types in practice.One is the contracting-related Integrity Agreement which is mainly applicable to the contracting stage,such as the bidding stage.The other one is the performance-associated Integrity Agreement which is primarily applicable to the performance phase and sometimes includes the post-contract phase.Around the property and effectiveness of the aforementioned agreement,a number of dispute arose in practice,and the court decisions are also not uniform.In terms of properties,the agreement on the relationship between the civil rights and obligations of the two parties,which is agreed by the equal subject of public and commercial transactions on the basis of free consultation,should belong to a kind of civil contract and should be adjusted by the contract law of our country.In practice,contracting related integrity agreements generally signed when the parties sign a bidding agreement,while the performance-related integrity agreement generally signed when the parties sign a basic transaction contract.The integrity agreement related to the bidding agreement and the basic transaction contract signed by both parties shall have certain subordination and relative independence.As far as its attributes are concerned,its most direct embodiment is that if there is no transaction relationship between the two parties,that is,there is no underlying legal relationship arising from the bidding agreement or the underlying transaction contract signed by the parties.Then the integrity agreement has no value at all.As far as its independence is concerned,its most direct embodiment is that in the case of a contracting relationship,if the bidding agreement has been terminated for that the bidder has signed a formal contract with the tenderer,the termination will not necessarily lead to the termination of the relevant integrity agreement.If the fact that the two sides have violated the integrity agreement in the bidding process was found afterwards,the two sides still need to bear the corresponding responsibility under the agreement.In the case of a performance-related type,if one partyterminated the underlying transaction contract because the other one breach the contract,the dissolution of the agreement shall not affect the obligation of the breaching party to pursue,of course,the validity of such an agreement may be extended until the completion of the contract,in this moment,the integrity agreement signed by both parties will likewise not be ineffective as a result of the termination of the underlying contractual relationship.In terms of the effectiveness,the most controversial thing in practice is the validity of the legal liability for breach of the duty of integrity.First of all,from the validity of the monetary liability,contracting related agreement is mainly manifested as security deposit,the performance-related agreement is mainly manifested as liquidated damages.The relevant law in our country has made provisions for margin guarantee and the scope of it in the application is quite a wide range,as a new concrete form developed with practice,the margin guarantee of integrity has a legal effect.In addition,the integrity obligation guaranteed has the nature of the accompanying obligation,and both parties have a breach of contract when the margin guarantee was confiscated or withheld.In this analogy with the relevant provisions of the bid margin,define the amount of the integrity margin as the estimated price of the tender project 1% is reasonable.And,as a kind of agreed penalty,the integrity penalty can satisfy the creditors' lost that can not be filled according to the rules.Based on the accompanying nature of the integrity obligation and the fact that the two sides' default,the amount of the clean penalty will be determined as10% of the contract price by reference to 20% in the deposit rule.In that way,it can be able to carry out reasonable control over the amount of liquidated damages under the condition of unilateral pursuit of responsibility.Secondly,judging from the effect of the termination liability of the cooperation rights,although its concrete performance in the contracting relation type and the performance correlation type is different,but the determination of its validity can be the same argument,that is,under the principle of freedom of contract,it is affirmed that the parties have the right to decide independently on the choice of contracting parties,decisions in the contents and form of the contract and even contracting or not.