Priority Of Compensation Of Construction Project Contractor

The system of priority of compensation of construction project contractor was established by Section 286 of Contract Law of the People's Republic of China enacted on October 1st,1999.The Official Reply on Issues of Priority of Compensation of Construction Project Price and the Judicial Interpretation on Issues of Applying Laws to Cases of Contractual Disputes of Construction Project published by the supreme court respectively on June 20^th,2002 and October 25^th,2004 made clear the several problems related to the people's court applying Section 286 of the Contract Law while determining priority of compensation of construction project contractor and accounted for how to apply laws to cases of contractual disputes of construction project,however,they are only partial regulations and achieve neither to specify the decided system of priority of compensation of project contractor from all aspects nor to fully clarify such many problems occurring in practice,in particular,they fails to give definite regulations about legal nature,scope and procedures of exercising of the priority of compensation.All these defects result in lack of operability of the Section and difficulty of enforcing the right in judicial practice and give rise to extensive disputes.In this essay,based on analysis of the legal nature of priority of construction project contractor,â… will try to comprehend the problems of commencement time of priority of contraction project contractor and such problems involved in exercise of the right as subject of right,scope of subject matters,scope of compensation and ways of exercising the fight as well as the problems of determining the rank of compensation where the priority of compensation of construction project contractor conflicts with claim secured by mortgage or the right of forward purchaser of marketable housing and make a study of how to perfect the system of priority of compensation of construction project contractor.Guided by the above-mentioned consideration,â… arrange this essay into five parts as follows:(1) Legal nature of priority of compensation of construction project contractor.In this part,â… present the point that priority of compensation of construction project contractor belongs to legal priority in nature after comparing and analyzing the major existing academic viewpoint.(2) The time for priority of compensation of construction project contractor to come into effect.Priority of compensation of construction project contractor is a kind of secondary right to secure enforcement of principle credit of project price,therefore priority of compensation of construction project contractor commences simultaneously with commencement of the project contract.It comes into effect when the construction project contract is concluded and takes effect. (3) Exercising of priority of compensation of construction project contractor.After comparing and analyzing relevant problems being extensively disputed in academies,â… draw the conclusion that only the contractor of construction project contract enjoys such priority,including sub-contractor of the project.In practice,the contractor's advance consolidated into the project should be concluded into contract price and be the subject matter of priority of compensation.If the owner fails to pay contract price under agreement,the contractor may exercise its priority and apply with the court for auctioning the project.(4) Determination of rank if priority of compensation of construction project contractor conflicts with other rights.â… mainly discuss the cases that priority of compensation of construction project contractor conflicts with claim secured by mortgage or with rights of forward purchaser of marketable housing.â… am of the opinion that,on one hand,priority of compensation of contraction project contractor ranks ahead of claim secured by mortgage,but it is necessary to introduce a registration system for supplement to balance the relationship between the two kinds of priority,on the other hand,the conflict between priority of compensation of construction project contractor and rights of forward purchaser of marketable housing should be determined according to various circumstances,but the right of consumers should be protected in priority.(5) Consideration about how to perfect the system of priority of compensation of construction project contractor.â… will advance proposal of perfecting the system of priority of compensation of construction project contractor.During the process of composing this essay,â… mainly study the issues related to priority of compensation of construction project contractor by the method of comparative analysis.Omission,error and unadvisable points are inevitable owing to limitation of my knowledge,of materials and of time,â… sincerely welcome all your comment and correction.