Chapter 16: Contracts For Construction Projects

Article 269     A construction project contract refers to a contract whereby the contractor undertakes the construction of the project and the contract letting party pays the cost and remuneration.

Construction project contracts include project survey contracts, project design contracts and project construction contracts.

Article 270     Construction project contracts shall be in written form.

Article 271     The invitation and submission of tenders to a construction project shall be proceeded openly, equally and fairly according to the provisions of relevant laws.

Article 272     The contract letting party may enter into a construction project contract with a general contractor, or enter into a survey contract, design contract or construction contract with a surveyor , designer or constructor respectively.

The contract letting party may not divide the construction project that should be fulfilled by one contractor into several parts so as to be finished by several contractors.

With the consent of the contract letting party, the general contractor or the contractors for survey, design or construction may assign part of the contracted work to a third party. The third party shall assume joint and several liability to the contract letting party together with the general contractor or the contractors for survey, design or construction in respect of its work achievements. A contractor may not assign the whole contracted project to a third party or divide the whole contracted construction project into several parts and assign them respectively to third parties in the name of subletting.

The contractors are forbidden to sublet the project to any unit not having corresponding qualifications. The sub-contractor is forbidden to sublet its contracted work once again. The construction of the main body of the construction project must be completed by the general contractor.

Article 273     Contracts for major construction projects of the State shall be concluded in accordance with the procedures prescribed by the State and the investment plans, feasibility study reports and other documents approved by the State.

Article 274     The contents of a survey or design contract shall contain such clauses as the time limit for submission of the relevant basic materials and documents (including estimated budgets ), the quality requirements, the expenses and other terms for cooperation.

Article 275     The contents of a construction contract shall contain such clauses as the scope of the construction, time period for the construction, the time for beginning and completing the intermediate construction projects, the quality of the construction, the cost of the construction, the time for submission of technical data, the responsibility for supply of materials and equipment, the allocation of funds and settlement of accounts, the inspection and acceptance of the project upon completion, the scope for guaranteed maintenance and repair and the quality guaranty period, the mutual cooperation of the two parties.

Article 276     Where supervision is practised in respect of a construction project, the contract letting party shall enter into a written supervision commission contract with a supervisor. The rights, obligations and legal liabilities of the contract letting party and the supervisor shall be in accordance with the provisions on commission contracts of this Law and other relevant laws and administrative regulations.

Article 277     The contract letting party may inspect the operation progress and quality at any time provided it does not hamper the contractor from normal operation.

Article 278     Before covering a project which needs to be covered, the contractor shall notify the contract letting party to inspect the project. If the contract letting party fails to inspect it in time, the contractor may prolong the construction period, and shall have the right to request the contract letting party for compensation for losses caused by work stoppages and idling of the labour force, etc

Article 279     Upon completion of a construction project, the contract letting party shall inspect and accept the projects in time according to the construction drawings and specifications as well as the construction inspection rules and quality standards issued by the State. If qualified, the contract letting party shall pay the costs and remuneration and accept the construction project according to the terms of the contract. A construction project may not be delivered for use until it is qualified through inspection and acceptance. A construction project may not be delivered for use without inspection and acceptance or proved to be unqualified through inspection and acceptance.

Article 280     Where the quality of survey or design work is not in conformity with the requirements, or the survey or design documents are not submitted in due time, thus delaying the construction period and causing losses to the contract letting party, the surveyor or designer shall continue to complete the survey or design,

reduce or do not charge the survey and design fees, and make compensation for the losses.

Article 281     If, due to the causes of the constructor, the construction quality does not conform to the terms of the contract, the contract letting party shall have the right to request the constructor to repair or reconstruct within a reasonable time limit free of charge. If such repair or reconstruction results in overdue delivery of the project, the constructor shall be liable for the breach of contract.

Article 282     If, due to the causes of the contractor, personal injury and property losses have occurred within the period of reasonable use of the construction project, the contractor shall be liable for damages.

Article 283     If the contract letting party has not supplied the raw materials, equipment, sites, funds or technical data according to the agreed time and requirements in the contract, the contractor may prolong the construction period and shall have the right to request for compensation for the losses caused by work stoppages and idling of the labour force, etc

Article 284     If, due to the causes of the contract letting party, a construction project pauses or is postponed in the course, the contract letting party shall adopt measures to offset or reduce the losses and compensate the contractor for losses and actual expenses incurred as a result of work stoppages, idling of the labour force, changes in transportation, transfer and move of machinery and equipment, overstocking of materials and components , etc

Article 285     If, due to modification of the plan, or inaccuracy of the data supplied or a failure in providing the necessary conditions for survey and design work according to the time limit by the contract letting party, the survey and design work has to be redone or stopped , or the design revised, the contract letting party shall pay additional expenses for the amount of work actually rendered by the surveyor or designer.

Article 286     If the contract letting party fails to pay the costs and remuneration in accordance with the terms of the contract, the contractor may urge the contract letting party to pay the money within a reasonable time limit. If the contract letting party fails to pay within the time limit, except that it is not appropriate to convert the construction project into money or auction it due to its characters , the contractor may consult with the contract letting party to convert the project into money, or apply to the people's court to auction the project according to law. The costs and remuneration of the construction project shall be compensated in priority by the money derived from the conversion or auction.

Article 287 Matters not addressed in this chapter shall apply the relevant provisions on contracts for work.