Analysis of the effectiveness of the contract for the supply of materials and equipment without bidding.

1. brief

basic case]

Plaintiff: Company A; Defendant: Company B.

"A residential area" project is a residential area invested and constructed by Defendant B Company. On September 20, 2000, the project department of "a residential area" of defendant company B produced the tender for the supply of materials and equipment for a project. On September 27 of the same year, plaintiff company a submitted the tender to defendant company B, promising to accept the defendant's budget bid of 28256590 yuan. And provide a deposit of 500000 yuan; Can advance materials and equipment about 10 million yuan, etc. In fact, Company A and Company B did not conduct bidding procedures in accordance with the provisions of the Bidding Law. On October 25, 2000, the plaintiff and the defendant formally signed the "Contract for the Supply of Materials and Equipment for a Project" (hereinafter referred to as the "Supply Contract"), stipulating that the plaintiff shall implement general contracting for the supply of materials and equipment for a project, and the defendant entrusts the relevant supervision company to be solely responsible for the acceptance of materials and equipment supplied by Company A; If the materials and equipment pass the acceptance, Company B shall pay the money to Company A within 2 days, A late fee of 0.03 per cent of the amount due for each day of delay, etc. On October 30 of the same year, the plaintiff paid the defendant a deposit of 500000 yuan. On September 19, 2002, the original and the defendant signed a supplementary agreement, stipulating that the defendant shall temporarily pay the purchase price according to the plaintiff's purchase price, and the part exceeding the purchase price demanded by the plaintiff to the defendant shall be settled through negotiation by the end of March 2003. After reaching an agreement, the defendant offset part of the material amount through payment, creditor's rights transfer, etc., but as of the end of March 2003, the two parties had not reached an agreement on the amount exceeding the purchase price.

Company A, the plaintiff, filed a lawsuit with the Jinan Intermediate people's Court, requesting the defendant to pay the materials and equipment at the original price and liquidated damages for overdue payment. Defendant B Company argued that the contract signed by the 1. parties on October 25, 2000 was invalid, and that the contract signed by the two parties should be tendered without bidding in accordance with the law, which violated the mandatory provisions of the law. 2. the plaintiff's demand for payment of materials and liquidated damages has no factual and legal basis. Request to dismiss the plaintiff's claim.

court ruling]

The Jinan Intermediate People's Court accepted the case in accordance with the law and held that: Defendant B is a wholly state-owned company, and its development project should be subject to public bidding in accordance with the provisions of the Bidding Law. The original and defendant's "supply contract" violated the relevant mandatory provisions of the "Bidding Law" without bidding. However, since the mandatory provisions of the Tendering and Bidding Law are administrative norms rather than effective norms, such norms aim to manage and punish violations of the regulations, but do not deny the effectiveness of the act in civil and commercial law, so in order to encourage transactions and protect the stability and security of transactions, the Supply Contract signed by both parties should be recognized as a valid contract.

Jinan Intermediate People's Court ruled in accordance with the law: Defendant Company B shall pay the materials and equipment to Plaintiff Company A within 10 days from the effective date of the judgment, return the deposit, and pay liquidated damages for overdue payment (from April 1, 2003 to the effective date of this judgment, calculated at 3/10000 of 5842345.29 yuan per day).

2. the theoretical issues involved in the case

Through the above brief, it can be seen that the key to the dispute in this case is the determination of the validity of the contract. The issue of whether the contract for the supply of materials and equipment that has not been concluded in the bidding process has legal effect has always been a hot issue discussed in the academic and practical circles, and from the current point of view, its views have not yet reached an agreement. From the intensity of the debate between the plaintiff and the defendant during the trial of the case, it can be seen that there are mainly two views: one view is that the "supply contract" is invalid, on the grounds that it violates the mandatory provisions of the law; the other view is that the "supply contract" is valid, on the grounds that the "supply contract" violates the administrative norms of the law rather than the effective norms, and should not be deemed invalid. It can be seen that the essence of the dispute in this case is the validity of the contract signed in violation of the mandatory provisions of the law.

1. Whether mandatory provisions need to be classified

When the court makes a judgment, the main basis for determining the validity of the contract is the relevant provisions of the Contract Law. Many scholars and practical experts take the invalidity of the contract "in violation of the mandatory provisions of laws and administrative regulations" stipulated in the (V) paragraph of Article 52 of the contract Law as the legal basis, and hold that the supply contract is invalid on the grounds that the supply contract should be tendered without tendering in violation of the mandatory provisions of the tendering and bidding Law. But at the same time, many scholars and experts believe that "mandatory provisions" should be further divided into "management norms" and "validity norms", and only contracts that violate the validity norms of mandatory provisions should be considered invalid. Among them, the civil judgment of Jinan Intermediate People's Court is the latter point of view.

2, the management of norms and effectiveness of norms.

After the promulgation of the (II) judicial interpretation of the contract Law, it is clearly stipulated that "mandatory provisions" refer to the mandatory provisions of effectiveness ". In this way, the debate between the academic and practical circles on whether mandatory provisions need to be classified has naturally come to a conclusion, that is, mandatory provisions should include effective mandatory provisions and non-effective mandatory provisions. However, the (II) judicial interpretation of the Contract Law does not put forward the concept of "non-effective mandatory provisions", nor does it further define and explain the "effective mandatory provisions. Nevertheless, in the academic and practical circles, many scholars and practitioners have divided the "mandatory provisions" into "management norms" and "effectiveness norms", and made a profound explanation of its meaning.

3, the content of management norms and effectiveness norms.

Among the views that advocate the division of "mandatory provisions" into "administrative norms" and "effective norms", the most influential is the speech made by Xi Xiaoming, vice president of the Supreme People's court, at the national civil and commercial trial work conference: "mandatory provisions include administrative norms and effective norms. Administrative norms refer to the norms that the laws and administrative regulations do not explicitly stipulate that the violation of such norms will lead to the invalidity of the contract. Such norms are designed to manage and punish violations of the provisions, but do not deny the effectiveness of the act in civil and commercial law. The validity norm refers to the norm that the law and administrative regulations clearly stipulate that the violation of such provisions will lead to the invalidity of the contract, or the norm that the violation will lead to the invalidity of the contract, but if the contract continues to be valid, it will harm the national interest and the public interest. Such norms are intended not only to punish violations, but also to deny their effectiveness in civil and commercial law. Therefore, the contract should be found invalid only if it violates the mandatory norm of validity."

Although the content of Vice President Xi Xiaoming's speech is neither a legal provision nor a judicial interpretation, nor is it legally binding, it will play a guiding role in future legislation and interpretation. It can be seen from the speech that the "mandatory provisions" stipulated in the "Contract Law" are divided into "management norms" and "effectiveness norms". When determining the validity or invalidity of the contract, the "validity norm" of the mandatory provisions of the law shall be cited, that is, the norm that clearly stipulates that the violation of such provisions will lead to the invalidity of the contract, or the norm that the breach will lead to the invalidity of the contract, but if the contract continues to be valid, it will harm the national interest and the public interest. On the other hand, if the contract violates the mandatory "administrative norms", it is only necessary to punish the violation according to law, and there is no need to deny the validity of the act in civil and commercial law, that is, the contract is still valid.

3. combined with case analysis

On the whole, there are two major controversies in this case. One is whether the material and equipment supply contract signed by the original and the defendant is valid; the other is whether the defendant should pay the plaintiff for materials and equipment and liquidated damages, and return the deposit. These two controversial focuses are based on the first, and the final result of the first focus directly affects the existence of the second focus. In other words, if the contract signed by the two parties is invalid, it should be resolved in accordance with the principle of invalidity of the contract, and there is no need to discuss the second focus.

Based on this, this paper only focuses on the first focus of the case dispute, combined with the court's decision results, to talk about the author's personal opinion.

1. Legal basis for determining the validity of the Supply Contract

(1) Article 52 of the the People's Republic of China Contract Law stipulates: "The contract shall be invalid under any of the following circumstances: (5) Violation of the mandatory provisions of laws and administrative regulations."

(2) The Supreme People's Court on the application<中华人民共和国合同法>Article 14 of the (II) for the Interpretation of Certain Issues stipulates: "The 'mandatory prescriptions' stipulated in Item (V) of Article 52 of the Contract Law refer to the mandatory provisions of validity."

2. Legal analysis of the validity of the Supply Contract

According to the above two provisions, the basis for determining the validity of the contract should be to see whether the contract violated the mandatory provisions of validity in the process of signing. If the mandatory provisions of validity are violated, the contract is invalid. From the provisions of Article 52 of the "Contract Law" to the provisions of Article 14 of the Judicial Interpretation (II) of the "Contract Law", from the original general "mandatory provisions" to the current clearer "mandatory provisions of validity", The state has taken another key step in the legislation and interpretation of the law to determine the validity of contracts, which can indeed resolve many disputes related to the determination of contract validity. However, since the judicial interpretation (II) of the Contract Law does not explain the mandatory provisions of validity, nor does it clearly define which legal provisions are mandatory provisions of validity, it is the key point to determine whether a certain legal provision, such as the Bidding Law, is a mandatory provision of validity. The author thinks that it can be analyzed from the specific content of the current legal provisions.

According to the provisions of Article 49 of the Bidding and Bidding Law: "In violation of the provisions of this law, projects that must be subject to bidding but not bidding, the project that must be subject to bidding is broken into parts or the bidding is avoided in any other way, it shall be ordered to make corrections within a time limit, and a fine of not less than 5‰ but not more than 10% of the contract amount of the project may be imposed; the person in charge and other persons directly responsible for the unit shall be punished in accordance with the law." Obviously, this clause only stipulates that if the project that must be tendered is not tendered or avoided, the project company should be fined and the person in charge and other persons directly responsible for the unit should be punished according to law. In my opinion, this clause does not directly stipulate that violation of this provision will result in the invalidity of the contract; nor does it stipulate that if the failure to conduct a tender affects the result of the winning bid, the winning bid will be invalid; nor can it be determined whether the continued validity of the Supply Contract will harm the national interest or the public interest. Therefore, the Tendering and Bidding Law does not belong to the mandatory provisions of validity.

From the above analysis, it can be seen that a contract signed in violation of the mandatory provisions of the law is not necessarily invalid, but also a specific analysis of whether the mandatory provisions violated are mandatory provisions of validity. In this case, the Supply Contract was signed without the bidding procedure in accordance with the law, in violation of the provisions of the Bidding Law, which is a violation of the mandatory provisions of the law; however, through analysis, the Bidding Law does not belong to the mandatory provisions of validity, and does not have the function of denying the validity of the contract in civil and commercial law. Therefore, the author believes that the effectiveness of the Supply Contract in civil and commercial law has not been denied, so it is still valid.

3, the first instance judgment found that the "supply contract" valid evaluation.

The contract involved in this case has nothing special, but because there should be no bidding, it violates the mandatory provisions of the law, which touches on a vague area of law, that is, whether the mandatory provisions can be further classified, which provisions are effective mandatory provisions and other issues, the law does not make provisions. During the trial of this case, the (II) judicial interpretation of the Contract Law has not yet been issued. At that time, there was no legal regulation or judicial interpretation that further clarified the "mandatory provisions" as "effective mandatory provisions". It is only in the academic and practical circles. Many scholars and practical experts divide mandatory provisions into effective norms and management norms. Contracts that violate effective norms should be invalid contracts, and contracts that simply violate regulatory norms do not lose their effectiveness in civil and commercial law. In this case, the first-instance judgment can deeply understand the original intention of the legislation, and innovatively put forward in the judgment that the Tendering and Bidding Law is a management norm rather than a validity norm, and that violation of the management norm does not lead to the invalidity of the contract. It is indeed commendable and very forward-looking.

4. Conclusion

From the two major aspects of theoretical discussion and case analysis, this paper makes an in-depth analysis of whether the material and equipment supply contract signed without bidding has legal effect, and puts forward the view of the validity of such contracts. Although the issue of the determination of the validity of the contract in this case has been resolved, because there are no legal provisions and judicial interpretations to further explain the mandatory provisions of validity, and there is no clear definition of which type of mandatory provisions are mandatory provisions of validity. Therefore, it is recommended that the legislature or judicial organs conduct in-depth research on this issue in the process of legislation and interpretation in the future, and further make clear provisions or explanations.