On The Priority Of Contractor's Consideration

In nature,the rule of priority of contractor's consideration provided by PRC Contract Law and judicial interpretation is a kind of statutory priority,which have retrospective effect,but non-publicity-procedure.That kind of privilege began from Roman Law,however,ancient priority rule is incompatible with China's current real right for security,as a result of its retrospectivity,creditor can ask to be paid firstly from the debtor's particular immovable property,which damages real right for security credit.For some reason,the Supreme People's Court enacted judicial interpretation to specify and revise the rule of priority of contractor's consideration,these regulations restrict the opposition to the subject,the effective period for enforcement.However,whether it is authorization or power limitation,the rule-makers only focus on the needs of society,neglecting the systemic and basic theories of the law,leading to the confusion of the standards of legal application in judicial practice.That is why academic explanation is necessary,for it can reconcile them.Comparative law generally shows the trend of reducing the confidentiality and retroactivity of legal real estate priority,adding requirement of registration to public the right to the world,moreover,some country have converted it into a statutory mortgage,depriving its retroactivity.However,under the new rule,the purpose of protecting contractor's consideration right almost could not achieve,for its complicated registration procedure or non-retroactivity,to some extent,they have become meaningless clauses.For what,this paper would not recommend China revise its priority of contractor's consideration regulations according to comparative law,which means this paper believe keep the statutory priority prototype's character(non-publicity and retrospectivity)in Roman law is significant to protect contractor and construction workers.However,the statutory priority has negative external effects,it brings disadvantages to the debtor and other creditors(including the mortgagee).In order to balance the interests of all parties,it could be reasonable means to appropriately reduce its negative external effects by regulations.For keeping the equality of the creditor and the debtor,this paper suggests that Article 286 of the Contract Law emphasize a reminder procedure,which is a ‘must-have' procedure.It means before enforces the priority of contractor's consideration,the contractor is required to send out the reminder to the debtor as soon as the liquidation period expires,before the priority of contractor's consideration.Reminder information including requirement of the original contraction consideration,and most importantly,the contractor have to notice that,it is possible for him to enforce statutory priority.For other,in terms of legal effects,this paper insist that we have to strictly distinguish the statutory six-month enforcement period from the guarantee period.Enforcement period means contractor have to request to be paid off by the project's value within six-month,otherwise his suits would not be approved by People's Court.The two enforcement methods specified in Article 286 of the Law.Restrictive provisions do reduce the negative external effects of the priority of contractor's consideration.However,in the perspective of the current judicial practice,the internal legal effects,the protection of the interests of contractors and construction workers,are damaged.In Judicial Interpretation II,the beginning of statutory sixmonth enforcement period was revised,the validity to waive the priority rights was illustrated,which is considered as a measure,in this paper,to make up the damages mention in the last sentence.The revised period beginning(when the consideration should be paid)is consistent with the period beginning theories in civil law as well as the legislative purpose.Besides,in this way,disadvantages caused by period commits to the debtor.But the drawback is that the new beginning is easily to be changed according to interested parties' will.weakening or depriving restrictive effect of the statutory period.In order to make up for this deficiency,this paper suggests that “the day when the consideration should be paid” should be defined as the settlement date of the project price initially agreed by the parties,and neither the party can change the payment date arbitrarily after the completion settlement,nor does it include the period given by reminder.In this way,we can exclude the interference of the interested parties' will to the beginning of the statutory period,thus protecting the strictive effect of the statutory priority and the legality of the rule.In order to show its purpose,to protect special groups' interest,Judicial Interpretation II specified that if contractor waived the statutory right which damaged the interests of construction workers,it is invalid.In order to achieve its purposes,this paper insists that when the law is applicable,it is reasonable to adopt the pre-adjustment method and the presumption principle,to presume that generally abandonment behavior is harmless to construction workers,only when the debtor can prove the construction workers salary has been paid off or guarantee measure has been provided,the behavior of waive the statutory right could valid.In summary,for understanding China's current regulation of priority of contractor's consideration,two perspectives are needed,empowerment and power limitation.From the perspective of empowerment,rules aiming to safeguarding the interests of contractors,basing on the lessons of comparative law,we could affirm that the current provisions of China are reasonable,keeping the retrospectivity and requiring nonpublicity-procedure,making it enforceable and effective,rather than a dormant clause;From the perspective of limitation,reducing negative external effects requires strictly explain of some regulations,to regulate its enforcement procedures,methods and statutory period.In a certain extent,under the premise of jurisprudence theory,interested-parties right could be balanced,statutory priority and China's current security interest system could be more compatible as well.