Construction Engineering Environmental Capital Law Review (No. 20)-Analysis of the problem of the contractor's overdue application for the extension of the construction period from the perspective of the judicial interpretation (I) of the new construction project.

Published:

2021-09-08

Abstract: The parties to the construction contract of the construction project usually agree that the extension of the construction period shall be confirmed by the contractor or supervisor in the form of a construction period visa, and agree on the time limit for the contractor to apply for the extension of the construction period. There is a dispute as to whether the contractor's overdue application for the extension of the construction period should be supported, for this reason, the Supreme People's Court issued the "(I) of Interpretation on the Application of Law in the Trial of Construction Contract Disputes" (Interpretation No. 25 of the Law [2020]) (hereinafter referred to: "(I) for Judicial Interpretation of New Construction Projects") Article 10, paragraph 2, but the book stipulates two exceptional cases in which the contractor's late application for extension of the construction period should be supported. In view of the problem of the contractor's overdue application for construction period extension, this paper starts with the basic problem of construction period extension, introduces the construction period delay events that cannot be attributed to the contractor, analyzes the dispute over whether the contractor's overdue application for construction period extension loses its substantive rights, and analyzes the determination of the contractor's overdue application for construction period extension and the contractor's burden of proof for construction period extension, in order to benefit the practical operation of the construction period extension problem. Key words: time delay, overdue application, burden of proof Due to the non-standard construction market in China, the weak awareness of the rules of all parties, the contractor's legal risk prevention and control ability and management ability are not strong, and in practice, due to the non-cooperation of the contractor, the contractor's right to apply for the extension of the construction period is usually not supported. Especially on the issue of the contractor's overdue application for extension of the construction period, the contractor's legal rights are more vulnerable to infringement. To this end, this paper, based on the (I) of Judicial Interpretation of New Construction Projects, introduces in detail the problem of the contractor's overdue application for extension of the construction period, and puts forward corresponding suggestions. Basic Problems of 1. Period Extension Definition of (I) Duration Extension The extension of the construction period means that in the event of a delay in the construction period that cannot be attributed to the contractor, the contractor obtains the extension of the construction period in accordance with the contract or the legal provisions. The parties usually agree in the construction contract that the extension of the construction period shall be confirmed by the contractor or supervisor by visa, and shall apply for the extension of the construction period within a certain period of time. (II) delay events not attributable to the Contractor include 1. Delay of construction period caused by the Employer Article 803 of the Civil Code stipulates the employer's liability for breach of contract: "If the employer fails to provide raw materials, equipment, sites, funds and technical data in accordance with the agreed time and requirements, the contractor may postpone the date of the project and has the right to request compensation for losses such as work stoppage and work stoppage." Article 798 stipulates the acceptance of concealed works: "Before concealed works are concealed, the contractor shall notify the employer for inspection. If the employer fails to check in time, the contractor may postpone the project date and have the right to claim compensation for losses such as work stoppage and work stoppage." the general clause 7.5.1 of the construction contract (model text) (GF-2017-0201 text) (hereinafter referred to as the "model text") stipulates that the construction period is delayed due to the employer's reasons: "during the performance of the contract, the construction period is delayed and (or) the cost is increased due to the following circumstances, the Employer shall bear the delayed construction period and (or) increased expenses, and the Employer shall pay the Contractor reasonable profits:(1) the Employer fails to provide the drawings as agreed in the Contract or the drawings provided do not conform to the Contract;(2) the Employer fails to provide the construction site, construction conditions, basic data, permission, approval and other commencement conditions as agreed in the Contract;(3) There are errors or omissions in the measurement datum point, datum line and leveling point provided by the employer and their written data;(4) The employer fails to agree to issue the commencement notice within 7 days from the planned commencement date;(5) The employer fails to pay the advance payment, progress payment or completion settlement payment according to the date agreed in the contract;(6) The supervisor fails to issue instructions, approval and other documents as agreed in the contract;(7) Other circumstances as agreed in the terms of the special contract." In addition, Article 11 of the "(I) for Judicial Interpretation of New Construction Projects" stipulates that "before the completion of the construction project, the parties have a dispute over the quality of the project, and the quality of the project has been appraised, the appraisal period shall be the period of the extension of the construction period". The circumstances provided for in this provision are generally due to the contractor's challenge to the quality of the project, and can also be attributed to delays caused by the contractor. 2, according to the law or the contract should bear the adverse consequences of the event. It mainly refers to the occurrence of force majeure events or infectious diseases such as wars, abnormal weather, natural disasters that cannot be reasonably foreseen, and the need for protection of cultural relics found on site, which are not subject to construction will. General clause 17.1 of the model text states that "force majeure refers to natural disasters and social emergencies that are unforeseen by the parties to the contract at the time of signing the contract, inevitable and insurmountable in the course of the performance of the contract, such as earthquakes, tsunamis, plagues, riots, martial law, riots, wars and other situations stipulated in the special contract terms." Article 17.3.2 stipulates: "(4) If the force majeure affects the contractor's performance of the obligations stipulated in the contract, which has caused or will cause the delay of the construction period, the construction period shall be postponed, and the cost and loss of the contractor's shutdown shall be reasonably shared by the contractor and the contractor, and the wages of the workers that must be paid during the shutdown shall be borne by the contractor;" 3. Delays in construction period caused by changes proposed by the Employer or the Supervisor and changes proposed by the Contractor and agreed by the Employer During the performance of the construction contract of the construction project, if there is a design change that exceeds the scope of the original drawing, and the resulting change order, negotiation, change construction preparation, material procurement, mechanical equipment preparation, etc., the contractor has the right to claim to the contractor that the construction period for the increased work content be extended. The General Terms and Conditions of the Model Text 10.6 stipulate that if the construction period changes due to changes, the parties to the contract may request adjustment of the construction period of the contract. Disputes 2. whether the contractor loses the substantive right to apply for the extension of the construction period after the deadline. The construction contract for a construction project usually stipulates: "The contractor shall apply to the contractor or supervisor for an extension of the construction period within a certain time limit, and shall be confirmed by the contractor or supervisor's visa, and if the contractor fails to claim the extension of the construction period within the agreed time limit, it shall lose the right to request the extension of the construction period. Item (1) of Article 19.1 of the General Terms of the Model Text stipulates: "The contractor shall, within 28 days after knowing or should have known the occurrence of the claim, submit a notice of intention to claim to the supervisor and explain the cause of the claim; If the contractor fails to issue the notice of intention to claim within the aforementioned 28 days, it shall lose the right to request additional payment and (or) extension of the construction period." This article provides for a system of claim period, which requires the contractor to claim to the contractor within 28 days of the extension of the construction period, compensation for the increased costs and payment of reasonable profits for delays not caused by the contractor. Although the claim period stipulated in the Model Text can urge both parties to the contract to claim their rights in a timely manner, it has caused many disputes in practice. In practice, there are two views on whether the contractor loses the substantive right to apply for the extension of the construction period after the deadline: One view is that the failure of the contractor to apply for an extension of the construction period is not necessarily a loss of authority. The main reason is that the system of time limits for claims under the Model Text is not the same as the statute of limitations and the period of exclusion. First of all, the period of claim stipulated in the Model Text is agreed upon by the parties, while the limitation of action and the period of exclusion are the statutory system stipulated in the General Principles of Civil Law, and the overdue "right" agreed by the parties should not be recognized as the loss of substantive rights, and the elimination of substantive rights should be stipulated by the mandatory law. Secondly, from the actual effect, after the expiration of the statute of limitations, the obligor has the right to refuse to perform the defense, the right holder loses the right to win the case, and the contractor's late extension of the duration of the project has not been eliminated. The loss of rights in the Model Text refers to the loss of procedural rights, the failure of the contractor to claim an extension of the duration within the agreed time limit, and the loss of such procedural rights due to the failure to provide timely and effective evidence, not a direct loss of substantive rights. If the right holder has sufficient evidence to prove that his rights and interests have been damaged, he shall not be deprived of his right to claim compensation within the statute of limitations. If the authenticity of the relevant facts is unknown, the claimant shall bear the adverse consequences. Another view is that if the contractor applies for an extension of the construction period within the time limit, it will have the legal consequences of the elimination of the right to win in the proceedings. First of all, "the law does not protect those who sleep on their rights", the claim period in the Model Text is similar to the statute of limitations system in civil law, and if the contractor delays the time limit, the court should not protect its substantive rights before the arbitration body. In addition, from the principle of reciprocity of rights, the Model Text 19.2 stipulates: "(2) The contractor shall, within 28 days after the supervisor receives the claim report or further supporting materials related to the claim, the supervisor shall issue to the contractor the results of the claim processing signed by the contractor. If the contractor replies late, it shall be deemed to approve the contractor's claim;" Similarly, if the contractor applies for an extension of the construction period late, it shall be deemed that the construction period is not extended. 3. Determination of Contractor's Overdue Application for Extension of Construction Period from the Perspective of (I) for Judicial Interpretation of New Construction Projects In view of the great controversy in judicial practice about whether the contractor loses the substantive right to apply for the extension of the construction period after the deadline, the second paragraph of Article 10 of the (I) on Judicial Interpretation of New Construction Projects stipulates: "If the parties agree that the contractor fails to apply for the extension of the construction period within the agreed time limit, it shall be handled in accordance with the agreement, except that the employer agrees to extend the construction period after the agreed time limit or the contractor raises a reasonable defense." According to this provision, the (I) for Judicial Interpretation of New Construction Projects adopts the principle of respecting the autonomy of the parties, and there is an agreement to follow its agreement. In addition, the book provides two exceptions: that is, if the employer explicitly agrees to the extension of the construction period or if the contractor provides reasonable defense against the failure to apply within the agreed time limit, the people's court shall support the contractor's claim to extend the construction period. The provisions of the (I) for Judicial interpretation of New Construction projects not only reflect the principle that "the law does not protect people who sleep on their rights" and fully respect the autonomy of the parties, but at the same time, the two exceptions stipulated in the book require the court to examine the contractor's reasonable defense and evidence, and determine whether the construction period should be postponed according to the degree of proof. According to the provisions of the (I) of Judicial Interpretation of New Construction Projects, it can be seen that:(1) The court or arbitration institution shall judge the meaning of the parties according to the agreement of the construction contract and the actual performance of the parties. Although the Contractor fails to apply to the Employer for the extension of the construction period according to the agreed time limit, if the Employer indicates that it agrees to the extension of the construction period through relevant meeting minutes, correspondence, commitment letter, etc. after the agreed time limit, it shall be deemed that the Employer and the Contractor have changed the original contract agreement and the agreed time limit for claim shall no longer apply. (2) The contractor puts forward reasonable defense reasons. If the project is changed due to the employer, the project quantity is increased, the situation changes such as war, abnormal climate, natural disasters and force majeure events cause the project to stop, and the contractor gives a reasonable explanation to the fact that the construction period is delayed. At this time, the court shall also approve the extension of the construction period as appropriate. The judge should, according to the rule of thumb and in line with the concept of pursuing fairness and justice, examine the evidence more reasonably, determine the facts, and exercise discretion cautiously, and should not support the contractor's claim to postpone the construction period. In practice, another situation is that the contractor and the contractor have agreed on the time limit for applying for the extension of the construction period, but they have not agreed that the overdue claim for the extension of the construction period shall be regarded as the non-extension of the construction period or as a waiver of the right, and it cannot be directly determined that the contractor's overdue application for the extension of the construction period is a waiver of the right to claim the extension. 4. The Contractor shall bear the burden of proof for the extension of the construction period. If the contractor applies for the extension of the construction period within the time limit and requests the employer to compensate for the losses, in addition to giving a reasonable explanation to the fact of applying for the extension of the construction period within the time limit, the contractor shall also bear the burden of proof for the following facts, including:(1) the fact that the construction period is not attributable to the contractor;(2) the fact that the construction period can be extended for specific days and the calculation method;(3) Causality between the fact of construction period delay and the actual number of days of construction period delay (the measurement of causality is usually based on whether the influence of the fact on the construction acts on the key line). Proof of common construction period extension: 1. The Employer fails to provide raw materials, equipment, site, funds, technical data, drawings and commencement conditions in accordance with the agreed time and requirements. The above facts are caused by the Employer's breach of contract. In this case, if the Contractor claims to postpone the construction period and requests the Employer to compensate for the losses, it shall bear the burden of proof for the following facts: ① the fact that the Employer has breached the contract; ② the number of days that the construction period can be postponed and the calculation method; ③ the losses suffered by the Contractor due to the delay of the construction period and the specific amount. 2, according to the law or the contract should bear the adverse consequences of the event. What is mentioned here mainly refers to the occurrence of force majeure events such as wars, abnormal weather, natural disasters, etc. that cannot be reasonably foreseen, or infectious diseases, and the need to protect cultural relics found on site, which are not subject to the will of the contractor. The Contractor shall provide evidence of the following facts: ① evidence of the existence of the above-mentioned force majeure event or accident; ② the force majeure event or accident is sufficient to have a serious impact on the construction period. 3, due to the contractor or supervisor proposed changes, as well as by the contractor, and agreed by the contractor caused by the change delay or increase in the amount of work. The construction period delay includes critical line delay and non-critical line delay, and the causality is usually measured on the basis of whether the impact of the fact on the construction works on the critical line. The critical line is also called critical path, which is the route with the longest total working duration on the line, I .e. the route with the longest construction period. The total duration of all processes on the critical line is the total construction period of the project. Any delay of any process on the critical line will cause the delay of the total construction period of the project. Non-critical lines have a certain floating time. If the delay of the construction period is less than the floating time, it will not affect the total construction period. Therefore, in the case that there is a change or increase in the amount of work in the project, and the contractor and the contractor have not formed the construction period visa, meeting minutes and other supporting materials, it is necessary to judge whether the impact of the change or increase in the amount of work on the construction works on the key line. If the contractor claims to postpone the construction period or compensate for the loss due to the change proposed by the employer or the supervisor, as well as the change proposed by the contractor and agreed by the employer, the following facts shall be proved in addition to the fact that the design change or increase of the engineering quantity caused by the employer: ① there is a causal relationship between the design change or increase of the engineering quantity of the employer and the delay of the construction period, the impact of engineering changes or increases in the amount of work on the construction of key lines; ② specific costs incurred by the contractor due to design changes or increases in the amount of work. In addition, it should be noted that design changes do not necessarily lead to delays, and if they are optimization changes, they may shorten the duration. 4, the contractor failed to pay the project advance payment, progress payment according to the date agreed in the contract. If the contractor fails to pay the project funds as agreed in the contract, the contractor may require the contractor to pay the project funds and interest, which may not necessarily cause delay in the construction period. If the contractor does not stop work, the contractor's failure to pay the project as agreed will not have a material adverse impact on the contractor's construction. In addition, if the contractor fails to pay the progress payment and the advance payment in accordance with the contract because of the contractor's delay in the construction period and the quality of the project, it is not appropriate to determine that the construction period can be extended or to require the contractor to compensate for the loss. Therefore, the contractor failed to comply.

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