Once a contract has been signed, we sometimes conclude supplementary agreements based on changes. When the main contract is inconsistent with the supplementary agreement, how can the supplementary agreement have the same legal effect?
In our work, we often make changes to the contracts that are being executed, depending on the actual situation. Since it is a change to the main contract, it means that the supplementary agreement will be different from the main contract. If there is a conflict between the two, how will the FA deal with it? How can we agree to ensure the legal validity of the supplementary agreement?
Which of the supplementary agreements and the main contract should prevail, a FA court judgment gives us the answer. The case number is: (2015) Min Yi Zhong Zi No. 374.
In August 2011, Ningxia Yingu Company entrusted Jiangsu SUZHONG Company to construct and construct, and the two parties signed the Construction Contract. Article 37 of the construction contract stipulates that in the event of a contract dispute between the two parties, they may settle in accordance with the law, and if the settlement fails, the two parties shall reach an arbitration agreement and apply to the Yinchuan Arbitration Commission for arbitration.
In July 2013, the parties signed a supplementary agreement to the construction contract. Article 5 of the Supplemental Agreement stipulates that the Supplemental Agreement shall have the same legal effect as the Main Contract, and in the event of any conflict between the Supplemental Agreement and the Main Contract, the Supplemental Agreement shall prevail. Article 6 of the Supplementary Agreement stipulates that in the event of a dispute between the main contract and the Supplementary Agreement during the performance of the Supplementary Agreement, if the negotiation fails, either party shall file a lawsuit with the People's Court with jurisdiction over the place where the project is located.
Due to the contract dispute, Jiangsu Suzhong Company filed a lawsuit with the Ningxia High FA Court in August 2015, demanding the termination of the construction contract and requiring Ningxia Yingu Company to pay the project price and liquidated damages.
The silver gu company raised a jurisdictional objection during the defense. They argued that according to the construction contract, the FA had no jurisdiction. Although the supplementary agreement stipulates that the dispute shall be resolved through litigation by the FA court, the main contract construction contract stipulates that the parties shall resolve the dispute through arbitration. Therefore, the company believes that the dispute between the parties should be resolved by the arbitration committee.
In the face of two conflicting agreements, what will the local high court and the Supreme Court decide?
The parties agreed in the supplementary agreement that the supplementary agreement has the same legal effect as the main contract; In the event of a conflict between the Supplemental Agreement and the Main Contract, the Supplemental Agreement shall prevail.
Therefore, the FA Court held that the provisions of the supplementary agreement were a change in the dispute resolution method in the main contract "Construction Contract" by the parties, which was an expression of the true intention of the parties and did not violate the provisions of the law. Therefore, the FA court ruled that the SU Chinese company filed a lawsuit with the FA court to resolve the dispute in accordance with the provisions of the supplementary agreement.
When we manage contracts, we often use the last-date supplemental agreement as the basis for the execution of the contract. Through the judgment of the FA court, we know that in order to clarify the role of the supplementary agreement, we also need to add such a sentence, that is, "this agreement has the same legal effect as the main contract, and if there is a conflict between this agreement and the main contract, this agreement shall prevail". This sentence is a sentence that we often see in supplementary agreements, and through this sentence, the FA Court will judge whether the parties have made a new agreement.
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