Legal advice to help fight the "epidemic" (II) construction companies to deal with delays.

The new coronavirus pneumonia epidemic has caused great obstacles and losses to the normal production and operation of all walks of life, especially to the construction industry has brought great test and pressure, how to maximize the control of legal risks and reduce economic losses in this war "epidemic" is a realistic problem faced by every construction enterprise, delays in the resumption of work, quarantine observation, traffic control, etc. based on the prevention and control of the epidemic have had a significant impact on the resumption of construction personnel and the purchase of construction materials by construction enterprises and have a substantial impact on the resumption of construction of commercial housing.

Based on our analysis in the special series of (I) on "Helping the War on Epidemic: Legal Suggestions for Real Estate Enterprises to Deal with Delayed House Delivery", this epidemic is a particularly serious public health event. The occurrence of the epidemic is unpredictable and inevitable, and it is insurmountable under the current health and medical technology conditions. It should be legally recognized as a force majeure event. If the construction enterprise cannot start or resume work as scheduled due to the epidemic, or if the construction period is delayed due to the commencement or resumption of work, the construction enterprise may take the epidemic as the legal cause for the contractor to apply for the extension of the construction period, I .e. the construction enterprise is not required to bear the responsibility for the delay of the construction period caused by force majeure, but whether the construction cannot be started or resumed due to the force majeure event or has a substantial impact on the construction period and the period affected by force majeure shall be specifically analyzed in combination with the contract performance and relevant evidence.

In order to realize the legal and well-founded exemption of construction enterprises from the relevant liability for late commencement, resumption of work or delay of construction period after the resumption of work due to the epidemic, combined with our construction real estate legal service experience, put forward the following legal recommendations for the reference of construction enterprises:
 

The 1. strictly responded to the administrative orders of government departments on the delay in the resumption of work by construction enterprises, obeyed government arrangements, avoided violations of the law, and actively participated in the prevention and control of the epidemic.

First of all, according to the Emergency Response Law and other relevant regulations, if construction companies do not obey various government orders and decisions on epidemic prevention and control when the epidemic has not been fully resolved and controlled at this stage, including but not limited to suspension of work, Suspension of resumption of work, personnel isolation, material requisition, etc., relevant responsible units and personnel may bear corresponding civil, administrative and criminal responsibilities in accordance with the law.

Secondly, according to the law on the prevention and control of infectious diseases, the law on emergency response, and the regulations on emergency response to public health emergencies, as a construction enterprise, it is also necessary to actively cooperate with disease control institutions, medical institutions and health administrative departments in the investigation, evidence collection, sampling and isolation of the epidemic situation, and timely report relevant patients and suspected cases.

 
2. pay close attention to the notices and regulations related to the construction industry issued by the competent government departments at any time, and make corresponding adjustments, responses and cooperation in a timely manner.

Based on the needs of epidemic prevention and control, the central and local governments and relevant departments have issued a number of notices and regulations on delayed resumption of work and management of the construction industry, which, as construction enterprises, should pay special attention to and make corresponding adjustments and responses in a timely manner, with specific recommendations as follows:

1. It is recommended to pay attention to all kinds of notices of extended holidays and delayed resumption of work, plan ahead, adjust the construction schedule and raw materials, labor supply, etc.

As far as construction enterprises are concerned, many notices issued by the central and local governments and relevant departments on extending holidays and delaying the resumption of work are directly related to the start time of projects under construction and the deployment of labor. In this regard, construction enterprises should plan and adjust the construction progress and labor supply of the project in advance, so as not to violate the relevant government regulations, but also to minimize the adverse effects of relevant policies on the project construction progress and project cost.

2. It is recommended to strictly implement the various regulations on project management during the epidemic issued by the relevant government authorities, and to carry out construction work in accordance with the law.

During the prevention and control of the epidemic, construction enterprises should also pay close attention to and collect similar notices and announcements issued by the local construction administrative department of the project to ensure that the relevant work is carried out under the premise of compliance.

For example, according to the Jinan Municipal Bureau of Housing and Urban-Rural Development "on strengthening the construction site of the new coronavirus epidemic prevention and control work of the emergency notice" document requirements, as a construction enterprise need to do:(1) for the migrant workers to investigate the filing work, arrange a special person as an epidemic prevention commissioner, responsible for the migrant workers of the epidemic investigation and health account management work. Before all employees enter the construction site, the epidemic prevention commissioner shall conduct temperature tests on them, record them one by one and make statistics. It is necessary to comprehensively map the travel trends of employees of the unit during and before the Spring Festival, and investigate all employees who have returned to Wuhan and Hubei since the discovery of the epidemic, as well as those who have close contact with the above. (2) Strictly control the personnel entering and leaving the construction site, first, from the source to prevent or suspend from the Wuhan area or contact with the area of workers into the construction site. The second is to register workers from non-epidemic areas with real names to prevent suspected cases of fever from entering the construction site. The third is to strictly enforce the access control management system for personnel who enter the construction site every day to prevent foreign personnel from entering the site;(3) Effectively do a good job in epidemic prevention in key areas of the construction site, implement standardized management on the construction site, improve the living conditions of employees, and cancel Da Tong Pu; strengthen the epidemic prevention management of key areas such as living areas and office areas of the construction site, and each construction site should establish a daily disinfection ledger, regular disinfection, ventilation and ventilation of living quarters, office areas and other key areas, keep clean, and so on.

3. fully and reasonably anticipate the possible material impact on construction in progress as a result of the outbreak control measures.

As the epidemic is still developing, it is recommended that construction companies fully and reasonably anticipate the various impacts and risks that may result from government epidemic control measures on construction in progress, including, but not limited to, the following impacts:

1. Direct impact: The competent government department clearly requires that the resumption of work be delayed, which directly affects that the overall construction period of the project will not be completed within the expected time limit.

2. Indirect impact:(1) Due to the epidemic prevention and control measures taken in the project location, such as work stoppage and production stoppage, restricting the flow of personnel and materials, etc., the restrictions on the labor and materials required by the project will indirectly affect the actual construction progress of the project;(2) Even if the construction has been started and resumed normally, the enterprise still needs to take epidemic prevention and control measures for the resumption of work, for example, epidemic investigation, health account management, improvement of living conditions of employees, isolation and disposal of suspected infected persons, and government control measures leading to shortage of labor and materials and rising costs, etc., will indirectly affect the increase in costs of construction enterprises.

The 4. shall, in accordance with the contract and legal provisions, communicate and negotiate with the construction unit in advance, and start the relevant claim or counter-claim work in due course.

In the current epidemic prevention and control situation, the state and local governments have issued all kinds of delayed resumption of work notices, restricting the flow of personnel and materials, which is bound to have a series of indirect effects on the delay of construction projects, the rise of labor and material prices, and the rise of project management costs, resulting in huge adverse consequences for construction enterprises. In this regard, it is recommended that all construction enterprises: on the one hand, they should actively and actively communicate and coordinate with the contracting unit; on the other hand, they should do a good job of fixing evidence in accordance with the construction contract and relevant legal provisions, so as to facilitate future claims and counter-claims work as follows:

1. Legal treatment suggestions related to construction period

(1) Collect and implement relevant evidence that the project is in normal construction progress and status before the outbreak.

According to Articles 117 and 118 of the Contract Law, if force majeure occurs after the parties delay in performance, they cannot be exempted from liability. That is, if the breach of contract has occurred before the occurrence of the force majeure event, the force majeure event cannot be used as an excuse for liability. It is suggested to collect and sort out relevant evidence to prove that before the outbreak of the epidemic, the project has been in a state of normal construction according to the contract, and there is no unauthorized shutdown, slowdown or other circumstances that may constitute overdue completion and delivery (I .e. if there is no epidemic, it is reasonably believed that the completion and delivery can be completed on schedule), including but not limited to: relevant evidence of node construction period completion, relevant evidence of construction progress payment allocation, construction log, supervision log, etc.

(2) Communicate and negotiate with the contract issuing unit in a timely manner to reach an agreement on the extension of the construction period.

According to the relevant provisions of Article 6 of the Interpretation (II) of the Supreme People's Court on the Application of Law in the Trial of Construction Contract Disputes, the contractor shall apply for the extension of the construction period within the time limit stipulated in the contract.

If the construction enterprise has determined that the epidemic situation will adversely affect the construction period of the project, first, the construction enterprise shall, in accordance with the relevant provisions of the construction contract, submit an application for extension of the construction period to the contracting unit or the supervision unit in writing within the agreed period, state the reasons, and do a good job in obtaining relevant evidence. Second, the construction enterprise shall negotiate with the contracting unit or the supervision unit in a timely manner to reach a supplementary agreement on the extension of the construction period.

(3) Collect relevant evidence that the implementation of the epidemic poses a substantial obstacle to the project duration.

Substantial obstacles to the implementation of the epidemic for the project duration, I .e. proof of the inevitability of delays during the epidemic.

In this regard, it is recommended that construction enterprises should do a good job in a timely manner to collect due to the impact of the epidemic caused by the relevant construction personnel, equipment can not be in place in a timely manner, raw materials can not enter the site, the project site can not start and other aspects of the evidence fixed work, including but not limited to all kinds of lease contracts, labor subcontracts, supervision letters, government documents.

(4) After the situation affecting the construction is eliminated, timely improve the resumption of work procedures or full load construction, and do the corresponding evidence collection work.

After the elimination of the situation affecting the construction, the construction enterprise should resume work or full load construction in time, and do the relevant evidence collection work, so as to avoid the delay of the construction period due to its own breach of contract, which will have adverse consequences for itself.

(5) Timely do a good job of obtaining evidence for various construction period delays caused by the contracting unit.

For reasons such as out-of-stock of products of the designated brand of the contract issuing unit, stagnation of construction progress of other subcontractors directly contracted by the contract issuing unit, failure of Party A supply materials to arrive in time, failure of partial process acceptance and completion acceptance, etc., which affect the construction of the project and lead to delay of the construction period, the construction unit shall promptly notify the contract issuing unit and relevant responsible parties in writing, inform them of relevant circumstances, urge performance and express adverse consequences, and do the corresponding evidence fixed work.

2, and labor, raw material price changes related to the legal treatment recommendations.

In the current nationwide epidemic prevention and control situation, the construction project required labor, materials, equipment and other prices are bound to be affected, it is recommended that construction enterprises actively collect and implement (1) the relevant construction authorities in response to the epidemic issued by the relevant provisions on project pricing;(2) Collect and implement policy documents issued by the competent department of building materials or industry associations on the price adjustment of labor, materials and equipment under the influence of the epidemic;(3) Collect and implement objective evidence provided by upstream and downstream suppliers and labor subcontractors on the increase in compliance costs due to the impact of the epidemic;(4) Other objective evidence of increases in the prices of labor, materials and equipment (e. g., government-directed price adjustments, changes in the prices of supply commodity platforms, price comparisons of newly signed procurement or lease contracts during the epidemic prevention and control period or after the impact of the epidemic has been eliminated, etc.).

On the basis of the above-mentioned collection work, according to the objective actual situation, the contract issuing unit shall be required to adjust the contract price appropriately, and relevant evidence collection work shall be done well.

3, and the outbreak prevention and control period, the loss of work related to the legal treatment recommendations.

Due to the epidemic prevention and control measures taken by the government during the epidemic, it will inevitably cause the construction enterprises to stop work, the adverse consequences of the work, in this regard, it is recommended that the construction enterprises to take the following risk control measures:

First of all, do a good job in advance including but not limited to material cost loss, mechanical equipment cost loss, water and electricity cost loss, personnel salary loss, early exit loss and other loss costs statistics, and do a good job in the corresponding evidence; Secondly, as far as possible, on the construction project stop, failure reasons and loss amount, sharing the main body, etc., to reach a written agreement with the contracting unit, at least in a timely manner to explain the reasons in writing, and put forward a written request for extension of the construction period, payment of stoppage and loss of work, and do the corresponding evidence collection work.

4, after the resumption of work during the rush to work related legal treatment recommendations.

After the impact of the epidemic risk is eliminated, the contracting unit will inevitably require construction enterprises to rush to work in order to avoid the loss of time delay, which means that construction enterprises need to increase the input of labor, materials, machinery and equipment, which will inevitably bring about an increase in costs. In this regard, it is recommended that construction enterprises take the following measures:

First of all, the employer is required to put forward the work rush instruction in written form. Secondly, after receiving the work rush instruction, the construction enterprise shall make a written work rush plan or plan, which clearly states the work rush measures taken, the increase of investment, the comparison of construction period, the expenses incurred, etc., and submit it to the employer for written confirmation as the basis for future settlement. Finally, during the rush period, for all kinds of expenses including but not limited to the entry of new personnel and related expenses, increased expenses for night construction, entry of new machinery and equipment and related expenses, increase of materials and related expenses, expenses for new projects due to rush work, and increased expenses for safe and civilized construction, the evidence shall be fixed through work contact list, project visa, meeting minutes, correspondence, etc.

5. timely take reasonable measures to avoid further expansion of the loss.

1. It is suggested to send a notification letter on force majeure to the construction unit in time and keep relevant evidence.

According to Article 118 of the the People's Republic of China Contract Law, if one of the parties is unable to perform the contract due to force majeure, it shall promptly notify the other party in order to mitigate the losses that may be caused to the other party, and shall provide proof within a reasonable period of time, and there are corresponding force majeure clauses in general construction contracts, it is recommended that construction enterprises send the "Force Majeure Notice on the New Coronavirus Pneumonia Outbreak" to the construction unit in a timely manner and retain relevant evidence to ensure the effectiveness of applicable legal provisions and contractual exemption clauses to the maximum extent possible, as follows:

(1) Production of the text of the Force Majeure Notice on the Novel Coronavirus Pneumonia Outbreak

Notice of Force Majeure on the New Coronavirus Pneumonia Outbreak

To: Limited

You and I signed the XXXX Contract on XX, XX, XX, 20XX, agreeing that we will contract your XXXX project construction. However, due to force majeure reasons such as novel coronavirus pneumonia epidemic control and government administrative orders, the labor arrangement and material supply in the project construction are facing substantial obstacles, resulting in the inability to start (resume) work according to the original plan. The above circumstances will seriously affect the performance of the above contract, and resulting in the late completion of the above works, as follows:

Since the discovery of unknown pneumonia patients in Wuhan on December 8, 2019, the new coronavirus pneumonia epidemic has developed rapidly, and so far, the data on confirmed infections are still rising, with unprecedented severity and scope of impact. In order to strengthen the prevention and control of the epidemic, effectively reduce the gathering of people and stop the spread of the epidemic, the General Office of the State Council, the Department of Human Resources and Social Security of Shandong Province, the Department of Housing and Urban-Rural Development of Shandong Province and the Housing and Urban-Rural Construction of Jinan City have successively issued emergency notices on extending the Spring Festival holiday and delaying the resumption of work of enterprises, clearly stopping all construction projects in 2020, in addition, employees entering and leaving Wuhan and Hubei and those in close contact with them need to be sorted and isolated. In particular, the Jinan Municipal Bureau of Housing and Urban-Rural Development, in accordance with the requirements of the prevention and control of the epidemic in Jinan, issued the "Emergency Notice on Strengthening the Prevention and Control of the New Coronavirus Epidemic on Construction Sites", clearly "for the start of all projects in 2020 (including pile construction), the resumption of work time, in accordance with the relevant requirements of the epidemic prevention and control will be notified separately". According to Article 180 of the General Principles of Civil Law and Article 117 of the Contract Law, the above-mentioned epidemic has constituted a force majeure for the performance of the construction contract between you and us, thus causing a delay in the construction period, we have the right to request an extension of the construction period equivalent to the duration of the impact of such time and shall not be liable for the delay.

In view of the fact that the outbreak is an ongoing event, we are not sure how long it will last and when it will end. In particular, we would like to explain to you the relevant matters in order to obtain your understanding. At the same time, we are carefully planning plans and measures to mitigate the impact of the above-mentioned epidemic, and we apologize for the inconvenience caused to you.

Attached: Relevant supporting documents

XXXX Limited

Month of 2002

(2) For the above notice, on-site delivery shall be carried out and the contract issuing unit shall be required to sign and confirm, or the notice shall be delivered to the construction unit by mail through EMS postal express, and the written evidence of mail delivery shall be kept.

For the above-mentioned force majeure notice, it is suggested to require the employer to affix the official seal (or project seal) on site and sign for confirmation by the employer's representative. If the conditions do not permit, it is suggested to mail the above-mentioned notice by EMS, and at the same time, the words "Force Majeure Notice on Novel Coronavirus Pneumonia Outbreak" shall be clearly marked on the express delivery details sheet. The receipt information shall be filled in the address agreed in the contract (if not, the registered address of the construction unit should be filled in); Attention should be paid to requiring the express delivery company to provide a written receipt of delivery, and properly keep the mailing slip, express form and receipt of delivery after mailing.

(3) If the change of the epidemic situation has a substantial impact on the construction of the construction project again, the construction enterprise shall also send a new notification letter to the construction unit in writing in a timely manner.

Considering the persistence of the epidemic, construction companies should also take care to treat the epidemic as an event with a continuing impact in accordance with the contract, issue relevant notices and reports to the contracting unit at regular intervals, and send a notice of termination of the event and a statement of circumstances after the end of the epidemic. The specific sending procedure and process are the same as above.

2, construction enterprises should actively fulfill the relevant obligations to mitigate losses.

Considering that it can be foreseen that the epidemic situation cannot be fundamentally improved in the short term, construction enterprises should actively fulfill relevant obligations to reduce losses, including but not limited to timely changing the project implementation plan, re-purchasing equipment and materials and recruiting labor personnel from areas not seriously affected by the epidemic situation, and withdrawing machinery and equipment that have not been used for a long time, otherwise they may bear the responsibility for the resulting expanded losses.

3, do a good job of contract termination preparation and response work

With reference to the "Construction Contract (Model Text)", if the contract cannot be performed for more than 84 consecutive days or more than 140 days due to force majeure, one party to the contract has the right to request the termination of the contract (subject to the contract agreement or the actual situation). In this regard, if the impact of the epidemic may last longer than the time agreed in the contract, the construction enterprise must reasonably foresee the possibility of the risk of contract termination, and make preparations for the termination of the contract and the timely settlement of the project payment after the termination of the contract.