Study On The Abandonment Effect Of Priority Compensation Right Of Construction Project Price

In order to solve the problem of wage arrears of workers,China established the priority of compensation for construction project price in the " Contract Law" in 1999.In real life,in order to protect their own interests,banks will require the contractor to give up the priority of compensation from the construction project price when the employer seeks loans.As to the effectiveness of giving up the priority of compensation from the construction project price,the theoretical circle in our country has not reached a consistent conclusion,and there are also cases of different judgments on the same case in judicial practice.In 2019,the Supreme People’s Court stipulates that waiving the priority of compensation from the project price is effective without harming the interests of construction workers.However,the judicial interpretation only makes a general provision on the effectiveness of abandonment,which is not clear and specific enough.This article analyzes the judicial practice and theoretical viewpoints of our country and makes reference to the relevant provisions of the extraterritorial laws in order to put forward its own suggestions for improving the waiver effect of the priority of compensation.This article mainly consists of five parts:The first part raises questions.This part summarizes three typical cases and the court’s views.It leads to three controversial situations: validity,invalidity and validity discrimination.Finally,it sums up the focus of the dispute,thus leading to the discussion on the issue of giving up the validity of the priority right to compensation of construction project price.The second part mainly discusses the disputes among the three theories of validity,invalidity and distinction of validity.The effective theory is mainly discussed from the following aspects: conforming to the principle of autonomy of the will and the principle of honesty and credit,and not in conflict with the guarantee of workers’ wages.The doctrine of invalidity is mainly discussed from the following aspects: violating the original intention of legislation,abusing the principle of autonomy of will,affecting social stability,etc.The validity distinction theory holds that the validity of waiving the priority of compensationcannot be generalized,and is valid only when the waiver has obtained the consent of construction workers,has reliable guarantee measures,and does not harm the interests of others.This paper holds that the theory of effectiveness differentiation not only takes into account the legislative purpose,but also fully respects the autonomy of the parties concerned and takes into account the interests of contractors,banks and construction workers.Therefore,the author supports the theory of effectiveness differentiation.The third part,from the perspective of comparative law,this paper sorts out the relevant provisions in Taiwan and the United States and other extraterritorial legislation,and puts forward several constitutive requirements for the waiver under the doctrine of effectiveness differentiation.Generally speaking,the specific conditions are as follows: First,waiver shall not harm the interests of third parties including laborers,subcontractors,etc.;Second,rights must not be waived before labor,services or materials are provided.Third,the abandonment must conform to the legal form,such as the abandonment must be notarized,signed a written waiver,and registered for abandonment.Fourth,there are already certain guarantee measures to ensure the effective implementation of the contractor’s project funds.Through the analysis of extraterritorial legislation,it can provide reference for the construction of the theory of distinguishing the effectiveness of renunciation in China.The fourth part,the proof of the validity distinction theory,mainly discusses from two aspects of social background and legal basis.Regarding social reasons,due to the fact that China’s construction industry is still not optimistic about defaulting on the wages of migrant workers,the adoption of the theory of effective differentiation ensures the wage claims of construction personnel,thus reducing the occurrence of social conflicts.As for the legal basis,The system of priority of compensation for construction project price gives workers the priority of compensation for construction project price,which plays an important role in protecting the basic survival interests of vulnerable groups and realizing substantial fairness.Allowing to give up the priority of compensation under certain conditions does not violate substantive fairness,implements the principle of autonomy of will and good faith,and does not violate the original intention of legislation.The fifth part is the development of the theory of distinguishing the waiver effect of the priority compensation right of construction project price.First of all,it elaborates the principle of judging the effectiveness of abandonment: whether it damages the interests of the third party and the public interest.If giving up the right of priority compensation causes damage to workers’ wage claims,the waiver shall be deemed invalid.Secondly,it stipulates the invalid situation of giving up the priority of compensation: giving up the priority of compensation in advance and giving up the priority of compensation is invalid when there is no substitute guarantee.A registration system shall be established,and a written notification procedure shall be established.Subcontractors and laborers shall be notified in writing of the waiver of the priority of compensation.Finally,it is clear that the legal consequence of giving up the priority right of repayment of construction project price is to change the order of repayment of creditor’s rights,without reducing the priority of compensation from the construction project price to ordinary creditor’s rights.