Study On The Settlement Problem Of Invalid Construction Contract Of The Reference

The Supreme People's Court on interpretation Construction Contract Disputes of legal issues Article 2: "Construction Contract is invalid,but the construction project after the final acceptance,the Contractor requests payment under the contract reference price should be supported." This clause aims to solve the problem of contractor's payment when the construction contract is invalid.However,due to the fact that the clause is not specific enough and there are often changes in the construction process,the clause is not grasped correctly and its application is confused in the process of judicature.Therefore,this paper intends to combine the provisions of the Contract Law on the treatment of general invalid contracts,and clarify the legal application ideas for paying the project costs in “reference to the contract”when the construction contract is invalid.The paper is mainly composed of five parts.The first part proposes the defects of the clause from multiple angles: the preconditions of the reference are unclear,making the application doubtful;the contract determination as the reference object is controversial;the scope of the agreed terms that can be referred to is unclear,leading to the determination of the contractor's project amount unstable.The second part draws the rationality and nature of the provision by sorting out the legislative process of “contracting the contractual agreement” to settle the terms of the project,that is,a relatively better discount compensation method after measuring the benefits when considering the actual construction situation.The third part points out the applicable conditions for the payment of the project cost in“reference to the contract” from three aspects.First of all,the entity that has the right to request application is not limited to the contractor,but also includes the actual constructor and the contractor;secondly,the "completion acceptance" should be strictly grasped,and the contractor can also apply the clause without authorization;finally,the exceptions that the actual constructor and the contract letting party reached a settlement agreement directly or actual settlement,and the actual settlement cannot be applied to the reference settlement is determined.The fourth part clarifies the objects of the settlement project cost in “reference to thecontract”.The determination of the reference object shall be based on the construction contract or settlement agreement signed by the contractor and the contractor;the contract actually performed by the party shall be used as the reference object when there are multiple invalid construction contracts;if the actual construction contractor and the employer have no clear agreement on the project payment or both parties agree to refer to the construction contract signed by the contractor and the employer to settle the project payment,the construction contract signed by the contractor and the employer shall be taken as the reference object.The fifth part analyzes the scope of referable terms and the composition of the contractor's project cost when the “reference to the contract” is settled.First of all,the payment conditions,payment method,liquidated damages,profit and other provisions in the contract cannot be referred to,but the reference terms are limited to the provisions on the valuation method and standard.Secondly,in the contract,only the agreement on the construction cost can be referred to and applied,which is the trade-in compensation when the contract is invalid in nature;finally,the agreement on interest,profit,work stoppage loss,and“management fee” in the contract cannot be used as a reference for settlement of construction costs.The contracting fault liability should be introduced to analyze the contractor's losses.When the construction contract is invalid,the contractor's typical damage compensation is expressed as interest,profit and lock-up losses.The three types of losses should be determined according to the calculation principle of contracting damages;if the contractor has a management action for the "management fee" as an illegal income,the corresponding "management fee" shall be paid,but the "management fee" shall be finally collected by the construction administrative department.