A compulsory bidding project. In January 2016, after the signing of the agreement between the two parties, the contractor entered the construction site, and agreed that the contractor would advance the full amount of the funds, and also agreed on an 8% interest on the advance. In July 2017, the construction of the project was completed and handed over for trial operation, and the project approval was passed later, and the bidding work and construction agreement were signed in March 2018.
Is the agreement signed before the bid valid?If it is invalid, is the agreement on the advance independent and valid?If the statutory advance interest is claimed, how to determine the amount and start and end time of each period in the absence of a monthly confirmation of completion of the project quantity?
Keywords: contract nullity
A: The first question is about the validity of the contract signed before the bid. Article 43 of the Tendering and Bidding Law: "Before determining the winning bidder, the tenderer shall not negotiate with the bidder on the substantive content of the bidding ** and the bidding plan. Therefore, if both parties have signed the contract and started construction before the bidding procedure begins, the contract signed before the bid is in violation of the mandatory provisions of the law and is invalid.
The second question, whether the advance clause is valid after the contract is invalid, is a highly debated issue in the theoretical circles. Guangzhou Arbitration Commission's "How to Determine the "Advance Clause" in Construction Contract Disputes?The article talks about the determination of the advance clause after the construction contract is invalid: "When encountering the invalidity of the construction contract, there are two views on how to treat the validity of the advance clause: one is that the advance clause can be understood as the borrowing behavior of the project, and the agreement is relatively independent and can be determined separately from the construction project, and the invalidity of the construction contract does not naturally affect the validity of the clause;Another view is that the construction contract is invalid, and the advance clause agreed in the contract is also invalid. When the SPC explained the judicial interpretation, it also mentioned that 'if the contract is confirmed to be invalid, the issue of advancing funds should also be treated as invalid.' The advance capital is the content of the return of property, and the interest can be treated as a loss of invalid contract and is treated according to the principle of fault'. Therefore, the construction contract is invalid, and the provisions on the advance clause are also invalid, and the employer may be required to return the advance money, and the interest on the advance can no longer be applied, but the interest on the project payment is regarded as the legal fruit, and the contractor can still claim against the employer. ”
In the Supreme People's Court (2015) Min Shen Zi No. 152 Judgment, the Supreme People's Court held that: "Since Qionghua Company did not have the corresponding construction qualifications, the second-instance judgment was correct in determining that the construction contract involved in the case was invalid in accordance with the provisions of Article 1, Paragraph 1 of the Interpretation of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Construction Contracts. According to Article 17 of the above-mentioned judicial interpretation, if the parties have agreed on the standard for calculating and paying interest on the unpaid project price, it shall be handled in accordance with the agreement;If there is no agreement, the interest shall be calculated according to the interest rate of the same type of loan issued by the People's Bank of China for the same period. In the case that the construction contract involved in the case was found to be invalid in accordance with the law, the second-instance judgment found that the two parties had not agreed on the payment of interest on the outstanding construction money, and ordered Lingao County** to pay the corresponding interest in accordance with the standard of the one-year general working capital loan benchmark interest rate for the same period stipulated by the People's Bank of China, which was in line with the adjudication principles determined by the above-mentioned judicial interpretation, and was not improper. The interest on the unpaid project money lacked factual and legal basis, and the grounds for the retrial of the application could not be established. ”
Therefore, there is no accurate answer in practice as to whether the advance clause is valid or invalid after the contract is invalid.
The third question is how to determine the amount and start and end time of each advance in the absence of a monthly confirmation of completion of the project quantity?There is no statutory time for this, and it may be necessary to first appraise the entire project quantity through the method of cost appraisal, and then prove it through the construction organization schedule submitted by the contractor during the construction process, the construction group approved by the employer or other evidentiary materials.
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