1. What is a construction contract? Contents of a construction contract.

Definition: According to the provisions of Article 138.1 of the Law on  Construction 2014, guided by Article 3.1 of Decree 37/2015/ND-CP, a Construction Contract is a civil contract agreed in writing between ones who assign the construction works (investor, owner, main constractor) and ones who get the construction works (contractor, sub-contractor) to carry out the construction of works, work items or construction tasks according to construction designs.

Contents of a construction contract: According to Article 141 of the Law on Construction 2014, guided by Decree 37/2015/ND-CP of the Government, the content of a construction contract includes the following main terms as follows:

• Applied legal bases;
• Content and volume of work;
• Quality, technical requirements of work; pre-acceptance test and handover;
• Contract performance duration and schedule;
• Contract price, advance payment, currency used in payment, and payment for the contract;
• Contract performance security, contract advance guarantee;
• Adjustment of the construction contract;
• Rights and obligations of the parties to the construction contract;
• Liability for violations of the contract, rewards and fines for violations of the contract;
• Suspension and termination of the contract;
• Settlement of disputes over the contract;
• Risks and force majeure events;
• Settlement and liquidation of the contract;
• Other contents such as insurance and guarantee under construction contracts, subcontracts, labor safety, environmental protection,  fire and explosion prevention and fighting.

Note: Such above contents must be shown clearly and specifically to limit disputes when performing the contract.

2. Principles of signing, performance, effect and legality of construction contracts.

Principles of signing construction contracts:

According to the provisions of Article 138.2 of the Law on Construction 2014, when signing a construction contract, the following principles must be ensured:

• Voluntariness, equality, cooperation, non-violation of law and social ethics;
• Assurance of adequate funds for payment according to contractual agreement;
• Having completed the selection of contractor and concluded the process of contract negotiation;
• If the contractor is a partnership of contractors, there must be a partnership agreement. The partners shall sign and append their seals (if any) to the construction contract, unless otherwise agreed by the parties.

At the same time, Article 4 of Decree 37/2015/ND-CP, as amended and supplemented by Article 1.3 of Decree 50/2021/ND-CP, also stipulates that when signing a construction contract, in addition to complying with such above principles must also ensure the following:

• At the time of signing the contract, the contractors must satisfy the conditions of practice capacity and operation capacity according to the provisions of the law on construction. For partnership of contractors, the division of volume of work in the partnership agreement must be consistent with the operational capacity of each member in the partnership. For foreign main contractors, there must be a commitment to hire domestic subcontractors to perform the tasks of the contract expected to be subcontracted when the domestic contractors satisfy the requirements of the bidding package;
• Project owners or their lawful representatives may sign contracts with one or more contractors to perform the work. If the project owners sign contracts with many contractors, the contents of these contracts must ensure consistency and synchronization in the process of performing the contract's tasks to ensure the progress, quality, investment efficiency of construction investment projects;
• General contractors and main contractors may sign contracts with one or several sub-contractors, but these subcontractors must be approved by the project owners, be consistent with the main contract signed with the project owners. The general contractors and main contractors must be responsible to the project owners for the progress and quality of the signed works, including those performed by the subcontractors;
• The contract signing price must not exceed the winning bid price or the contract negotiation results, except for the volume arising outside the scope of work of the bidding package as permitted by the person competent to decide on investment.
• Before signing an EPC contract (An Engineering, Procurement and Construction Contract), the parties must specifically agree on the main contents as prescribed in Article 1.3 of the Decree No. Decree 50/2021/ND-CP.

Principles of performance of work construction contracts:

According to the provisions of Article 138.3 of the Law on Construction 2014, when signing a construction contract, the parties must be ensured the following principles:

• The contractual parties shall properly implement their commitments in the contract regarding the scope of work, quality requirements, quantity, category, schedule, methods and other agreements;
• Honesty, cooperation and lawfulness;
• No infringement upon the interests of the State and community and lawful interests of other organizations and individuals.

Effect and legality of the work construction contract:

According to the provisions of Article 139 of the Law on Construction 2014 guided by Article 6 of Decree 37/2015/ND-CP:

• Meet the principles of signing of construction contracts as prescribed above; Form of contract in writing and signed by their competence in accordance with law of the parties to the contract. In case one party to the contract is an organization, that party must sign and append their seal in accordance with law.
• The effective time of a construction contract is the time of its signing (appended seal if any) or other specific time agreed upon by contractual parties and the ones who assign the construction works have received the contract performance security from the ones who get the construction works (for contracts with provisions on contract performance security).
• Legality of construction contracts: An effective construction contract is the highest legal basis that the ones who assign the construction works, the ones who get the construction works and related parties are obliged to perform; An effective construction contract is the highest legal basis for settling disputes between the parties. Disputes that have not been agreed upon by the parties in the contract will be settled on the basis of relevant laws; state management, agencies controlling, allocating, lending capital, inspecting, examining, auditing agencies and other relevant agencies must base themselves on legally effective contents of construction contracts to perform their functions and duties as prescribed, not to infringe upon the lawful rights and interests of the parties to the contract.

3. Why is it necessary to retain a counseling and drafting construction contract lawyer?

In the present age, many individuals and enterprises use many types of popular online model contracts as a basis for contract construction. This application of sketchy samples leads to disadvantages in rights and interests causing extremely serious consequences. In some cases, it even leads to the partial or complete invalidation of the contract. Therefore, drafting of a construction contract is not simple as establishing it from an existing document, but for a contract to be valid, the contract must strictly comply with specific regulations on form and content, and the terms of the contract must correspond to, suitable and specific to the type of work, work items, volume of bidding package, type of construction contract price, schedule, purposes and needs of the contract subject (project owner - contractor; bid solicitor - contractor). Additionally, in the process of negotiating and signing a contract, the terms of the contract often bind responsibilities and are placed in situations which rights and interests are not balanced and guaranteed between the two parties. It is necessary to carefully review each provision so as not to be disadvantaged. Therefore, in order to ensure the legal safety and their rights when drafting, negotiating and entering into construction contracts, individuals and enterprises need to find a reputable law firm with many years of experience in counseling, drafting and participating in many cases of negotiation and drafting of contracts, to ask to draft a legal contract, ensuring legal safety and preventing possible risks. A lawyer who counsels and drafts a construction contract can help You with the following issues:

• Explaining the content of each terms of the contract so that clients understand their rights and obligations of the parties involved and have appropriate agreements to protect their own legitimate rights and interests;
• Detecting loopholes in the contract, on that basis, binding the responsibilities between the parties more closely;
• Limiting the legal consequences that organizations and individuals may encounter in the progress of contract performance;
• Ensuring the feasibility of the contract is improved, disputes between the parties will be kept to a minimum, then, it will ensure that the business process of the parties becomes favorable, creating prestige and long-term business cooperation between the parties.

4. The work of a counseling and drafting construction contract lawyer.

Lawyers counsel on legal provisions related to work construction contracts, including:

• Counseling on the form and type of construction contract;
• Counseling on the nature and content of the construction contract;
• Counseling on the appropriate contract price according to the nature of the contract and the needs of the client;
• Counseling on the relationship of the parties involved in the construction contract (project owner, general contractor, contractor, sub-contractor...);
• Counseling on the rights and obligations of project owner, general contractor, contractor, sub-contractor... in the construction of works;
• Counseling on rights and obligations of contractors in the construction of works;
• Counseling on the rights and obligations of design consultancy contractor, supervision consultant in the construction of works;
• Counseling on the role of the construction supervision contractor;
• Counseling on procedures for  pre-acceptance test of works;
• Counseling on payment and settlement for construction investment projects;
• Counseling on compensation for damage for construction contracts;
• Counseling on capacity conditions of organizations and individuals engaged in construction activities;
• Counseling on legal regulations on conditions and practice certificates for construction activities;
• Counseling on documents, solving problems in the process of completing construction procedures;
• Counseling on settlement of disputes for adjacent households, construction disputes…;
• Counseling on dispute settlement related to the construction contract;
• Counseling on administrative penalties for violations in construction;
• Counseling on the settlement of cases of violations during the construction process (determination of violations, the risk of administrative sanctions, criminal prosecution; aggravating, mitigating factors...);
• Counseling on the settlement of incidents and labor accidents;
• Counseling on the conditions of contract liquidation in accordance with the law;
• Counseling on other arising issues related to the construction contract.

Lawyers draft and adjust the construction contract, including:

• Drafting contracts at the request of clients on the basis of compliance with the provisions of law and the specificity of each type of contract, ensuring maximum benefits of clients;
• Checking and reviewing the legality in the drafted contract, minimizing the loopholes in the contract, avoiding arising damage;

• Counseling on adjusting the contents of the contract after negotiation;
• ounseling on the settlement of terms that the parties cannot agree on and have conflicts of interest;
• Drafting a formal contract after the parties close all the terms of the agreement.

Lawyers counsel on the process of negotiating, entering into and implementing contracts, including:

• Counseling clients on the conditions for signing and negotiating construction contracts;
• Counseling clients on options for negotiating and entering into contracts;
• Counseling on the rights and obligations of the parties in the contractual relationship;
• Representing or assisting clients during contract negotiations.

Lawyers counsel on dispute settlement of work construction contracts, specifically:

• Counseling on identifying key issues in the dispute and the legal basis for dispute settlement;
• Assisting in drafting documents during dispute settlement negotiations;
• Trung tâm trọng tài thương mại/ Counseling on flexible dispute settlement by various methods of negotiation, conciliation and proceedings at the Court/Commercial Arbitration Center.

5. Phong & Partners Law Firm specializes in counseling and drafting construction contract.

With extensive experience and legal knowledge in the field of construction, Phong & Partners Law Firm provides comprehensive legal issues related to construction contracts. The work includes drafting, revising, negotiating and counseling on disputes arising in the process of signing and performing the contract. The scope of specific service provision is as follows:

• Counseling clients on legal provisions related to construction contract;
• Drafting and adjusting the construction contract;
• Counseling clients on conditions for signing and negotiating construction contract;
• Monitoring, supervising and counseling during the performance of the construction contract;
• Counseling on dispute settlement of construction contract disputes (the solutions can be negotiation and agreement in the spirit of cooperation of the parties or through the intervention of a specific jurisdiction such as the Arbitration Center or the competent People's Court);
• In addition, Phong & Partners supports and represents clients to participate in negotiations and conciliation with project owners /contractors; Appoints lawyers to protect the legitimate rights and interests of clients during the proceedings at Courts and Arbitration Centers.

Phong & Partners specializing in counseling and drafting construction contracts will help prevent and limit unnecessary legal risks for the parties, ensure a smooth and advantage contract implementation process. If you want to find a prestigious and dedicated lawyer specializing in counseling and drafting construction contract in Da Nang, Phong & Partners is ready to support and confidently provides clients with the most optimal and effective legal services. Please contact us via the following information:

==================

PHONG & PARTNERS LAW FIRM

Add: 6th Floor, Thanh Loi Building, 249 Nguyen Van Linh Street, Danang city - 0905.102425

   Phong & Partners Lawyer in Son Tra district: 01 Dong Giang street, Danang city - 0905.205624

   Phong & Partners Lawyer in Lien Chieu district: 21 Truong Van Da street, Danang city - 0901.95099

   Phong & Partners Lawyer in Ngu Hanh Son district: 03 Chu Cam Phong street, Danang city - 0905.579269

Tel: 0236.3822678

Email: Phongpartnerslaw@gmail.com

Web: https://phong-partners.com