The Preliminary Study On Law Issues Of EPC Contrcat

EPC turnkey contract (referred as EPC contract thereafter) stands for Engineering, Procurement and Construction contract which is agreed between the owner and the contractor. Under an EPC contract, the contractor will fulfill its obligation on engineering design, procurement, construction and finally handover the subject matter of contract to owner; meanwhile the owner shall make the payment as stipulated in the contract. At present, the general trend of engineering contracts in China has shifted from separated investigation, design, construction contract to the EPC turnkey project pattern, as government promoted the EPC contract model, EPC contract is generally used in foreign-owned projects, joint venture projects and also some large domestic petrochemical projects. For the contract, "EPC/turnkey contract conditions" which is commonly called "silver paper" and published by Federation Internationale Des lngenieurs Conseils (FIDIC), is commonly used. In 2009, China Ministry of Housing and urban-rural construction also drafted a "Model Contracts for General Contracting" (Exposure Draft) according to such trend.As one of the Contracts for Construction Project, EPC contract has some common parts with other construction contracts, most provisions stipulated in Contract Law shall be applied. But as a lump-sum price contract of Engineering, Procurement and Construction, EPC contract also has some special legal characteristics. But the current laws on EPC contract are decentralized, Some stipulations in Contract Law and Construction law are not entirely suitable for the EPC contract and needed for further research and improvement. For this purpose, this paper studied from the basic legal issues during establishment and effectiveness, performance, change and assignment of EPC contract, then made more study on certain special legal issues of EPC contract, such as the issue of consortium as a contract party, the relations and liabilities between EPC contractor and its sub-contractors, any special provisions about project information in EPC contact, hoping it can bring some good suggestions for improvement of Contract Law and also any positive influences on promotion, practice and improvement of EPC contract.This paper includes three parts:ChapterⅠfocus on the basic legal issues of EPC contract. Based on the legal concepts of EPC contract, analyze the characteristics, legal relations and main contents, and introduce the provisions and applications at home and aboard, approach the basic legal system of EPC contract.ChapterⅡfocus on the basic legal issues during the practice of EPC contract, analyzing and giving some advices for special issues during the contract establishment and effectiveness, performance guarantee, remedy for breach of contract, the principle and recognization of contract change, and contract assignment of an EPC contract.ChapterⅢmainly focus on issues of consortium as an EPC contract party, joint and several liability, payment, sub-contract of major structure, and also the issue about project information, analyze on their legal basis, legal relationship and status, point out the existed problems and defects, then make some advice for improvement of relative laws.