Chapter XVI Construction Project Contracts

Article 269 A "construction project contract" is a contract whereby the contractor carries out the construction of the project and the contract-offering party pays the price therefor.

Construction project contracts include contracts for project prospecting, designing and construction.

Article 270 Construction project contracts shall be made in written form.

Article 271 Bidding for construction projects shall be carried out in an open, fair and impartial manner in accordance with the provisions of relevant laws.

Article 272 The contract-offering party may enter into a construction project contract with a general contractor, and may also enter into separate contracts for prospecting, designing and construction with the prospecting, designing and construction parties separately. The contract-offering party may not break up one construction project that should be completed by one contractor into several parts and offer them to several contractors.

The general contractor or the prospecting, designing or construction contractor may, subject to consent by the contract-offering party, entrusts the completion of part of its contracted work to a third party. The third party shall assume joint and several liabilities together with the general contractor or the prospecting, engineering or construction contractor to the contract-offering party over the work results of the third party. A contractor may not assign the whole of its contracted construction project to a third party or break up the whole of its contracted construction project into several parts and assign them separately to third parties in the name of subcontracting.

It is forbidden for a contractor to subcontract its projects to a unit without corresponding qualifications. It is forbidden for a subcontractor to re-subcontract its contracted project. The main structure of the construction project must be completed by the contractor itself.

Article 273 Contracts for State key construction projects shall be entered into in accordance with the procedures set forth by the State and such documents as investment plans and feasibility study reports approved by the State.

Article 274 A prospecting or designing contract contains such clauses as the time limit for delivery of relevant basic materials and documents (including budgetary estimates), quality requirements, expenses and other cooperative conditions.

Article 275 A construction contract contains such clauses as the project scope, period for construction, time of commencement and completion of the projects to be delivered in mid course, project quality, costs, delivery time of technical materials, responsibility for the supply of materials and equipment, fund allocation and settlement, project inspection and acceptance upon its completion, range of quality guarantee, quality warranty period, and cooperation between the parties.

Article 276 For any construction projects in which the superintendence system is to be applied, the contract-offering party shall conclude an entrustment contract of superintendence in written form with the entrusted supervisor. The rights and obligations as well as legal responsibilities of the contract-offering party and the supervisor shall be defined pursuant to the provisions on entrustment contracts of this Law as well as the relevant provisions of other laws and administrative regulations.

Article 277 The contract-offering party may, under the condition of not disturbing the normal operation of the contractor, inspect the progress and quality of the work at any time.

Article 278 Prior to the concealment of a concealed project, the contractor shall notify the contract-offering party for the latter's inspection. If the contract-offering party fails to conduct a prompt inspection, the contractor may extend correspondingly the period for the completion of the project, and may demand compensation for losses caused by work stoppage and workers' forced idleness.

Article 279 When a construction project is completed, the contract-offering party shall undertake promptly the inspection for acceptance in accordance with the construction drawings and descriptions, as well as the criteria for construction project inspection and acceptance and the quality inspection standards issued by the State. Where the project passes the inspection for acceptance, the contract-offering party shall pay the contracted prices and take over the construction project.

A construction project may be delivered and put into use only after it has passed the inspection for acceptance upon completion. Without the inspection for acceptance or failing to pass the inspection, the construction project may not be delivered and put into use.

Article 280 Where losses are caused to a contract-offering party due to the fact that the prospecting or designing does not conform to the quality requirements or that the prospecting or designing documents are not submitted as scheduled, thus delaying the period for construction, the prospecting or designing party shall go on perfecting the prospecting or designing, reduce or waive the prospecting or designing fees and make compensation for the losses.

Article 281 If the quality of a construction project fails to meet the contracted requirements due to reasons attributable to the construction party, the contract-offering party has the right to demand the repair, reworking or reconstruction free of charge by the construction party within a reasonable period of time. If delivery is delayed because of the repair or reworking and reconstruction, the construction party shall bear the liability for breach of contract.

Article 282 If a construction project causes personal injury and property losses due to reasons attributable to the contractor within a reasonable period of use of the project, the contractor shall hold the liability for losses.

Article 283 If the contract-offering party fails to provide raw materials, equipment, sites, funds or technical materials at the contracted time and pursuant to the contracted requirements, the contractor may extend correspondingly the period of construction and has the right to demand compensation for the losses caused by work stoppage and workers' forced idleness.

Article 284 If a construction project is stopped or suspended in mid course due to reasons attributable to the contract-offering party, the contract-offering party shall take measures to make up for the loss or reduce the loss, and compensate the contractor for any losses and actual expenses caused by work stoppage, workers' forced idleness, back transportation, transfer of machinery equipment and piling up of materials and structural components.

Article 285 Where the contract-offering party alters its plan, provides inaccurate materials or fails to provide as scheduled necessary working conditions for prospecting or designing, thus leading to the redoing or stoppage of the prospecting or designing work, or the revision of the design, the contract-offering party shall raise its payment of fees according to the amount of work actually undertaken by the prospecting or designing party.

Article 286 Where the contract-offering party fails to pay the prices as contracted, the contractor may urge the contract-offering party to effect the payment within a reasonable period of time. Where the contract-offering party still fails to effect the payment at the expiration of that period, the contractor may negotiate with the contract-offering party for converting the construction project into money or may apply to a people's court for the auction of the project according to law, unless the construction project concerned is by nature unsuitable for conversion into money or auction. The payment for the construction of the project shall be effected, in priority, out of the proceeds from the conversion into money or auction of the said project.

Article 287 For questions not regulated by this Chapter, the relevant provisions on work contracts shall apply.