The dispute between Jiangsu XX Construction Group Co., Ltd. (the appellee) and the appellee over the construction contract of the construction project of the people's Procuratorate of XX District, Shenyang City
[Key words] construction project, project funds, cancellation
[introduction to the lawyer of this case] Liu Hong is the founding partner and senior partner of Liaoning Tongfang law firm. He once served as a judge of the economic trial division of the Liaoning Provincial Higher People's court. He participated in the organization and research of some difficult economic dispute cases in the province and gave guidance to the economic trial of lower courts. He was in charge of the economic trial guidance of the intermediate courts in southern Liaoning (Dalian, Yingkou, Anshan and Liaoyang). In 1997, the case of whether non transferable bills of exchange can be pledged, which was tried by Liu Hong, was selected by the Supreme People's court.
[main points of judgment] first, whether the dissolution agreement involved in the case can no longer be performed; Second, whether the appellee should pay all the remaining project funds at one time; Third, whether the 3% quality assurance deposit should be returned;
[basic case] on May 18, 2012, the appellant and the appellee signed the construction contract of construction project. After the contract was signed, the appellant entered the site for construction. After completing the main structure and part of the installation works, the appellee requested to terminate the contract due to the over area of the appellee's office building. On October 29, 2013, the appellee signed an agreement with the appellant on the construction scope of Jiangsu XX District Procuratorate's new case handling room and professional technology room project, requiring the appellant to formally deliver all the completed works to the appellee. Thereafter, on November 20, 2013, both parties signed the agreement on termination of construction contract of construction project. After the termination of the contract, the appellant, the appellee and the audit company signed the final form of project cost settlement review, and jointly confirmed that the total project settlement cost was 63341077.89 yuan. The appellee has paid the appellant 53 million yuan of project funds and the remaining 9 million yuan of project funds.
[judgment result] in the second instance, the Shenyang intermediate people's court basically supported the appellant's claim and revoked item 3 of the civil judgment (2018) Liao 0103 min Chu No. 412 of Shenyang Shenhe District People's court, Change the first paragraph "the people's Procuratorate of XX District of Shenyang city shall pay a lump sum of RMB 1231434.94 to Jiangsu Nantong Second Construction Group Co., Ltd. within ten days from the date of the legal effect of this judgment" to "the people's Procuratorate of XX District of Shenyang city shall pay a lump sum of RMB 3783235.73 to Jiangsu XX Construction Group Co., Ltd. within ten days from the date of the legal effect of this judgment".
[reason for judgment] the court held that the project involved had been stopped when the parties signed the termination agreement, so the Appellant was aware of the uncertainty of the performance conditions agreed in the agreement that "the whole project shall be paid to 97% of the total price of the completed project after acceptance". As the project involved has been transferred by the appellee, the work has been suspended for more than 5 years, which is far longer than the expected time when the two parties signed this clause, and the XX procuratorate is unable to explain the time limit for the resumption and acceptance of the project involved. Therefore, both parties have no possibility to continue to perform the above terms.
[legal basis] according to Item 2, paragraph 1, Article 170 of the Civil Procedure Law of the people's Republic of China.
[lawyer's opinion] in this case, the appellee is a special state procuratorial organ. There are many considerations in the court's judgment. On the basis of the fact finding error in the first instance judgment, the second instance judgment can be corrected and changed. The case has established the judicial credibility and is of typical significance.
[Key words] construction project, project funds, cancellation
[introduction to the lawyer of this case] Liu Hong is the founding partner and senior partner of Liaoning Tongfang law firm. He once served as a judge of the economic trial division of the Liaoning Provincial Higher People's court. He participated in the organization and research of some difficult economic dispute cases in the province and gave guidance to the economic trial of lower courts. He was in charge of the economic trial guidance of the intermediate courts in southern Liaoning (Dalian, Yingkou, Anshan and Liaoyang). In 1997, the case of whether non transferable bills of exchange can be pledged, which was tried by Liu Hong, was selected by the Supreme People's court.
[main points of judgment] first, whether the dissolution agreement involved in the case can no longer be performed; Second, whether the appellee should pay all the remaining project funds at one time; Third, whether the 3% quality assurance deposit should be returned;
[basic case] on May 18, 2012, the appellant and the appellee signed the construction contract of construction project. After the contract was signed, the appellant entered the site for construction. After completing the main structure and part of the installation works, the appellee requested to terminate the contract due to the over area of the appellee's office building. On October 29, 2013, the appellee signed an agreement with the appellant on the construction scope of Jiangsu XX District Procuratorate's new case handling room and professional technology room project, requiring the appellant to formally deliver all the completed works to the appellee. Thereafter, on November 20, 2013, both parties signed the agreement on termination of construction contract of construction project. After the termination of the contract, the appellant, the appellee and the audit company signed the final form of project cost settlement review, and jointly confirmed that the total project settlement cost was 63341077.89 yuan. The appellee has paid the appellant 53 million yuan of project funds and the remaining 9 million yuan of project funds.
[judgment result] in the second instance, the Shenyang intermediate people's court basically supported the appellant's claim and revoked item 3 of the civil judgment (2018) Liao 0103 min Chu No. 412 of Shenyang Shenhe District People's court, Change the first paragraph "the people's Procuratorate of XX District of Shenyang city shall pay a lump sum of RMB 1231434.94 to Jiangsu Nantong Second Construction Group Co., Ltd. within ten days from the date of the legal effect of this judgment" to "the people's Procuratorate of XX District of Shenyang city shall pay a lump sum of RMB 3783235.73 to Jiangsu XX Construction Group Co., Ltd. within ten days from the date of the legal effect of this judgment".
[reason for judgment] the court held that the project involved had been stopped when the parties signed the termination agreement, so the Appellant was aware of the uncertainty of the performance conditions agreed in the agreement that "the whole project shall be paid to 97% of the total price of the completed project after acceptance". As the project involved has been transferred by the appellee, the work has been suspended for more than 5 years, which is far longer than the expected time when the two parties signed this clause, and the XX procuratorate is unable to explain the time limit for the resumption and acceptance of the project involved. Therefore, both parties have no possibility to continue to perform the above terms.
[legal basis] according to Item 2, paragraph 1, Article 170 of the Civil Procedure Law of the people's Republic of China.
[lawyer's opinion] in this case, the appellee is a special state procuratorial organ. There are many considerations in the court's judgment. On the basis of the fact finding error in the first instance judgment, the second instance judgment can be corrected and changed. The case has established the judicial credibility and is of typical significance.
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