Research On Legal Issues Of Invalid Construction Contract

With the rapid development of China’s economy,the construction industry is becoming more and more prosperous.However,there are some illegal acts in China’s construction industry that leads to a large number of invalid construction contract disputes.Construction contract disputes often involve a huge amount of money,and the legal relationship between the subjects is complex and the performance period is long.Therefore,dealing with such disputes faces great challenges.In order to better solve the disputes caused by invalid construction contracts,China’s legislative organs,administrative organs and judicial organs have issued corresponding laws,administrative regulations and judicial,with a view to providing legal basis for the settlement of disputes over invalid construction contracts.However,there are various difficult and complicated cases in judicial practice.Due to certain ambiguities and loopholes in the existing regulations,such disputes can not be well resolved,which leads to different opinions of the same case in local courts,and there is an appearance of distinct judgments in the similarity case,which not only challenges the judicatory authority,but also makes the people lose faith in the law and is difficult to maintain the stability of market trading order.In order to further regulate the operation of China’s construction market,safeguard the interests of the parties to the contract and reduce the occurrence of disputes,this paper researches the types and legal consequences of ineffective construction in order to provide theoretical reference for the handling of such disputes.For the introduction,this paper includes four parts,which are as follows:The first part summarizes the basic problems of invalid construction contract,summarizes the legislative and judicial status of ineffective construction agreements in China from the definition of ineffective construction contract,and further analyzes the social roots of invalid construction contract that lays a theoretical basis to the following problem analysis and solutions.The second part discusses several typical classifications of ineffective construction agreements,namely,contracts concluded in violation of building qualification management,contracts concluded in violation of bidding procedures,illegal subcontracting and subcontracted agreements,and analyzes the troubles existing in the invalid construction agreements,and points out the shortcomings in the identification of ineffective construction contracts in China.The third part analyzes the legal result of invalid construction contract from three aspects:validity determination,project payment settlement and the actual constructor’s priority right to compensation.Regarding the determination of the validity of invalid construction contracts,this paper mainly concentrates on the inconsistency of the determination of the validity of contracts under the condition of "affiliated" and the ambiguity of the determination of the validity of "black and white contracts".The settlement of project funds mainly focuses on the validity of the project settlement agreement and which one should be settled when there are several contracts,and analyzes the nature of the interest generated accordingly.With regard to the enjoyment of the priority right of the actual constructor,this paper mainly analyzes the main scope of the actual constructor and the necessity of protecting his interests,and points out that there is controversy on whether the actual constructor enjoys the priority right of the project price in theory and practice.The fourth part,on account of the study of the first three parts,brings up corresponding suggestions for the related problems of invalid construction contracts put forward in the second and third parts.Including defining the criteria for determining the validity of "black-and-white contract" and judging the internal contract,perfecting the criteria for project payment settlement,determining the settlement basis of several invalid contracts and the applicable criteria for interest,and making it clear that the actual constructor has the priority to be compensated for the project price because of the factual contractual relationship between the actual constructor and the employer and according to the principle of unity of rights and obligations.