Real estate perspective. The legality analysis of "introduction fee" in construction project -- from the perspective of inter-house contract.

Published:

2023-07-13

Introduction: In the current construction engineering market, the current situation of "more monks and less porridge" still exists. The specific information of the construction unit's project cannot be disclosed to all construction enterprises, and the ratio of information resources is seriously unbalanced, which also leads to intermediary behavior (introduction, information provision, etc.) still plays an important role in the process of signing construction engineering contracts. Generally speaking, after the intermediary obtains the project information, it will pass the information to the client, or directly promote business cooperation, and then receive a certain remuneration according to the prior agreement, which is generally reflected in the introduction fee, intermediary fee, information fee, labor fee, business consulting fee, etc. Although the form is different, but according to the service content and characteristics, essentially belong to the inter-house contract. The first part is the definition and characteristics of the inter-house contract. Article 424 of the original the People's Republic of China Contract Law defines an intermediary contract as follows: it refers to a contract in which the intermediary reports to the client the opportunity to conclude a contract or provides media services for concluding a contract, and the client pays remuneration; Article 961 of the the People's Republic of China Civil Code now refers to it as an intermediary contract: that is, a contract in which the intermediary reports to the client the opportunity to conclude a contract or provides media services for concluding a contract, and the client pays remuneration. Through the definition and description, the characteristics of the intermediary contract of construction project can be summarized as follows: 1. The intermediary contract is a paid contract, a promise contract and a double service contract. The client in the intermediary contract must pay remuneration to the intermediary, and the intermediary needs to report the opportunity to conclude the contract to the client or facilitate the conclusion of the contract; 2. The intermediary operates by receiving remuneration for engaging in intermediary activities. Does the client enter into a contract with a third party, it has nothing to do with the intermediary, who is not a party to the contract between the client and the third party; 3. The intermediary is only responsible for being entrusted by the client, reporting the opportunity to conclude the contract or looking for a third party who can conclude the contract with the client, mediating, conveying the true intention of both parties, providing opportunities and creating conditions for the client to conclude the contract. In practice, we encounter similar contracts need to correspond to the above definition and characteristics of the inter-house contract to make a comprehensive judgment, to determine whether it belongs to the legal relationship of the inter-house contract, the following author will interpret the case, the project inter-house contract legal relationship and "introduction fee" of the identification and effectiveness of the issue of analysis. The second part of the specific case analysis 1. the validity of the inter-house contract. Case one: Case No.:(2022) Su 0509 Min Chu No. 12809 Trial Court: People's Court of Wujiang District, Suzhou City, Jiangsu Province The focus of the dispute: the legal effect of the project intermediary contract involved in the case. The Court's view: The Court held that ...... China's law does not prohibit the construction of the contract of the intermediary, public bidding matters also exist to report to others bidding and contract opportunities. Bidding activities follow the principles of openness, fairness, fairness and good faith, but it is not that there is an intermediary act that violates the principle of bidding activities, but that the intermediary matters in bidding activities are different from other contractual intermediary matters. The object regulated by the the People's Republic of China Tendering and Bidding Law and other relevant laws is that the employer and the contractor sign the construction project contract through improper means, and the intermediary contract involved in the case is expressed as "introducing Party A and Pinda Company, the construction unit of the project, to negotiate directly, and facilitate the signing of the supplementary terms agreement of the project with the construction unit", the defendant Shuntong Company did not provide evidence to prove that the employer, the contractor and the intermediary violated the relevant laws and regulations such as the the People's Republic of China Tendering and Bidding Law. Therefore, the defendant shuntong company on the case involved in the "project inter-house contract" in violation of the legal prohibition provisions, is an invalid contract defense opinion, lack of facts and legal basis, the court will not adopt. The Project Intermediary Contract shall be legal and valid. Case two: Case No.:(2022) Zhejiang 06 Min Zhong No. 2275 Trial Court: Shaoxing Intermediate People's Court of Zhejiang Province The focus of the dispute: the validity of the inter-house contract involved. Court view: This court believes that this case is an intermediary contract dispute, the parties in the second instance of the dispute focus is how to determine the validity of the intermediary contract involved in the case. Zheng Xiaowei advocated that the contract facilitated by the inter-house contract in the case was a subcontract for the project, and that the subcontract should be found invalid because it violated the mandatory provisions of laws and regulations, so the inter-house contract involved in the case should also be found to be invalid. In this regard, the intermediary contract involved in the case is the true intention of both parties to the contract, and it does not violate the mandatory provisions of laws and regulations. Whether the internal contract of economic responsibility signed by Zheng Xiaowei and Hongxu Company is valid or not does not affect the validity of the intermediary contract involved in the case, and whether the contract is valid or not does not affect Zheng Xiaowei's right to settle the project funds with Hongxu Company. It is not inappropriate to evaluate the validity of the first instance. Now Zhao Hualong has completed the intermediary service, that is, to promote Zheng Xiaowei and Hongxu company signed an internal contract construction economic responsibility contract, Zheng Xiaowei should fulfill the corresponding consideration obligation, that is, to pay the intermediary service remuneration, the first instance judgment ordered Zheng Xiaowei to pay the remaining intermediary service remuneration is not improper. Summary: If the construction project intermediary contract is the true intention of both parties, and the content does not violate the mandatory provisions of laws and regulations, it should be valid in principle; the intermediary's collection of intermediary fees according to the agreement is also a legal act and should be protected by law. And the construction project inter-house contract has relative independence, the validity and performance of the construction project contract signed by it, etc., does not affect the validity of the inter-house contract. However, in view of the complexity and particularity of the construction project, and the numerous laws involved, once the mandatory provisions of the Civil Code, the Bidding Law, the Construction Law and other laws and regulations are violated, there is a risk that the inter-house contract will be found to be invalid. (An invalid contract is not legally binding from the beginning, and if the inter-house person has not yet obtained the inter-house fee, it shall not be protected by law; the inter-house fee collected shall be refunded). 2. common cases of invalidity of inter-house contracts. If the intermediary in the (I) construction project assists the bidder in the bid or collusion, the intermediary contract shall be null and void. Case three: Case No.:(2022) Beijing 02 Minzong No. 13676 Trial court: Beijing No. 2 Intermediate People's Court The focus of the dispute: the validity of the "inter-house agreement" involved in the case. The Court held that the provisions of Article 10, paragraph 2 of Article 32 of the the People's Republic of China Tendering and Bidding Law, and the first paragraph of Article 63 of the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings stipulate that the parties shall make a true and complete statement of the facts of the case. In this case, Jin Yuan Company, Chen Fushun and Dong Conghui, head of the project planning and contract department involved in the case of China Railway 21st Bureau, all agreed that the project involved in the case was an invitation to tender. Chen Fushun said in the court hearing that Tao Songlin wanted to contract the project. He gave it to the 21st Bureau of China Railway. After looking for the 21st Bureau of China Railway, he found three companies for internal bidding. Wang Zhian found Jinyuan Company and Jinluyuan Company, Chen Fushun found Taishida Company, and then he asked Jinyuan Company to win the bid. The parties have the obligation to make a truthful statement, and in accordance with Chen Fushun's statement on the bidding process, combined with the above-mentioned legal provisions, the Intermediary Agreement is an invalid contract. (II) the intermediary introduces and undertakes construction projects for units and individuals without construction qualifications, the intermediary contract shall be invalid, and the intermediary shall not support the request for payment of the intermediary fee. Case four: Case No.:(2023) Beijing 02 Minzong No. 3895 Trial court: Beijing No. 2 Intermediate People's Court The focus of the dispute: whether the project involved in the case was successful Court view: This court believes that China's law prohibits construction enterprises from exceeding the business scope permitted by the enterprise's qualification level or contracting projects in the name of other construction enterprises in any form. Construction enterprises are prohibited from allowing other units or individuals to use their qualification certificates and business licenses in any form to contract projects in the name of the enterprise. Knowing that the client is not qualified, the act of introducing the project to him violates the mandatory provisions of laws and administrative regulations and shall be invalid. In this case, Zhou Jiang knew that Guan Jinfa did not have the qualification for construction projects, and it was also in violation of the law to borrow or rely on the qualification to contract the project, so he still introduced the project involved in the case, so the act should be invalid. Zhou Jiang based on the invalid agreement to claim that Guan Jinfa to pay it, lack of basis, the court of first instance did not support and not improper, the court upheld the verdict. Case Five: Case No.:(2023) Su 09 Min Zhong No. 1488 Trial Court: Yancheng Intermediate People's Court of Jiangsu Province The focus of the dispute: how to determine the validity of the "inter-house contract" involved in the case. Court view: The court of first instance held that where an intermediary provides intermediary services to a client, the intermediary matter must be legal. In this case, judging from the content of the intermediary contract involved in the case, the purpose of the intermediary service provided by Huang Yi is to facilitate Liu Qing to obtain the contract for the construction of Zhangjiagang High-speed Railway New Town Project (January -3 billion) of China Communications Company. Because Liu Kui is a natural person and does not have the corresponding construction cross-examination certificate, he cannot contract construction projects. Huang Yiyi provides intermediary services for Liu Kui's illegal contracting projects, which not only violates the mandatory provisions of the law, but also undermines the normal order of the construction market and goes against public order and good customs. Therefore, the court of first instance found in accordance with the law that the "inter-house contract" signed by the two parties on December 15, 2021 was invalid. The court of second instance held that the parties should provide evidence to prove the facts on which their claims are based or the facts on which the other party's claims are based, and if the parties fail to provide evidence or the evidence is insufficient to prove their claims of fact, the parties who bear the burden of proof shall bear the adverse consequences. In this case, the entrustment matters agreed by both parties in the "Intermediary Contract" are that Huang Yi accepted Liu Qing's entrustment and was responsible for introducing some road earthworks of Liu Qing's subcontracted Zhangjiagang High-speed Railway New Town Project (January -3 billion) of China Communications Company, introducing Liu Qing to negotiate directly with the winning bidder of the project, and providing Liu Qing with important information about some projects, and finally led to Liu Qing and the winning unit to sign a professional contract construction contract for the project; If the project is bid according to the sub-bid section, the professional contract construction contract for the bid section signed by Liu Qing and the winning unit shall prevail. From the above content, the agreed entrustment is that Huang Yi facilitated Liu Qing to undertake the construction of the project. The agreement violated the relevant mandatory provisions of the the People's Republic of China Construction Law and the the People's Republic of China Tendering and Bidding Law, so the first-instance judgment determined that the case involved The "Intermediary Contract" is invalid and not improper. (III) the intermediary contract violates the mandatory provisions of the Tendering and Bidding Law, the Construction Law, etc., the contract is a legal form to cover up illegal purposes, the contract is invalid. Case six: Case No.:(2022) Chuan 11 Min Zhong No. 220 Trial Court: Leshan Intermediate People's Court of Sichuan Province The focus of the dispute: whether the inter-house contract involved in the case is valid, whether Zhou Wenming should pay Liu Xianming the intermediary service fee assigned to him. Court view: In practice, illegal subcontracting and illegal subcontracting of contractors on the one hand lead to irregular contracting and contracting behavior in the construction industry market, disorderly competition, and disrupt the normal operation of the construction industry market, on the other hand, it directly leads to quality defects in construction projects, safety accidents in construction projects, endangering people's lives and property safety, and disrupting social stability. The purpose of the aforementioned provisions is to regulate the construction market and ensure the quality of construction projects, safeguard the safety of people's lives and property. Article 52 of the the People's Republic of China contract Law stipulates: "the contract shall be invalid under any of the following circumstances: (1) one party enters into a contract by means of fraud or coercion, harming the interests of the state; (II) malicious collusion, harming the interests of the state, the collective or the third party; (III) concealing illegal purposes in a legal form; (IV) harming the public interest; (V) violating the mandatory provisions of laws and administrative regulations". In this case, although the "Intermediary Labor Fee Payment Agreement" signed by Zhou Wenming and Feng Jun conforms to the basic requirements and contents of the intermediary contract in form, the content of its intermediary service is to introduce Zhou Wenming's signing of the "Project Construction Management Responsibility Letter" with Yinhe Company to borrow the construction qualification of Yinhe Company for construction, because the act of borrowing the qualification to build the project itself has violated the legal prohibition, the inter-house contract concluded between Feng Jun and Zhou Wenming for this purpose also violated the prohibitive provisions of the law and was invalid. Therefore, the invalidity of the contract is not binding on both parties, Feng Jun to Zhou civilization does not enjoy the payment of intermediary labor costs of the claim, Liu Xianming can not be based on the transfer of claims to obtain the right of claim to Zhou civilization. In addition, other illegal acts in the process of performing the intermediary contract, such as the project introduced by the intermediary is subject to bidding, and the two parties to the project contract fail to perform the formal bidding procedures and sign the construction contract; The intermediary who matches the construction party and the tenderer to conduct substantive negotiations, etc., may lead to the invalidation of the intermediary contract. 3. the inter-house contract is invalid, the inter-house person may still receive part of the remuneration (although the court considers the inter-house contract invalid, the court, in its discretion, upholds the remuneration because both parties are at fault and the inter-house person has performed part of the inter-house act) Case 7: Case No.:(2022) E 02 Min Zhong No. 2139 Trial Court: Huangshi Intermediate People's Court of Hubei Province The focus of the dispute: whether the service fees charged by Lu Cailin should be returned after the "Project Intermediary Contract" in the case is invalid. Court view: The court of first instance held that in this case, Shu Guangwei and Lu Cailin knew that Shu Guangwei, as a natural person, did not obtain the relevant qualifications for construction projects. Article 153 and Article 26 of the the People's Republic of China Construction Law shall be an invalid contract. The court of second instance agreed with this. Regarding whether the service fees collected by Lu cailin should be returned after the contract was invalid, the court of second instance held that in this case, Lu cailin mainly paid for human resources and labor services after the signing of the "project intermediary contract". Shu guangwei's intermediary behavior with Lu cailin actually contracted the civil engineering 2. of the workshop of the complete equipment production base of the credit industry environmental protection engineering through affiliation with Hubei haodu construction engineering co., ltd. and has entered the 1., ltd, the benefits were obtained from it, and Lu Cailin also paid labor and resources for this. The labor and resources already paid cannot be returned and should be compensated at a discount. Besides, Shu Guangwei, knowing that he did not have the qualification for construction, signed a contract with Lu Cailin and voluntarily paid Lu Cailin's intermediary fee of 50000 yuan, which is "payment for illegal reasons" and belongs to natural debt, I .e. he cannot rely on litigation to enforce performance, but the debtor

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