[Case Summary]This case involves a dispute over a subcontracting contract for construction project labor services. After the plaintiff, Shandong A Construction Company, completed two projects, the defendant, Beijing B Engineering Company, still owes the project payment of 204,485.57 yuan and refuses to pay on the grounds that the warranty period has not expired and the invoice has not been issued in full. Beijing Hengluo Law FirmLi YonghuiRepresenting the plaintiff, the defendant claimed that the contract is legal and valid, the warranty period has long expired, and the settlement document confirms the correct amount. The core disputes include whether the payment conditions have been met, the defense of the warranty deposit, and the defense of the invoice. Ultimately, the court ruled that the defendant should pay the project amount of 204,485.57 yuan and interest. The applicable legal provisions include relevant articles of the Civil Code and the LPR interest rate calculation rules.

I. Review of the Case Facts

"What should I do if the client refuses to pay the final payment after the project is completed?" and "Can I sue if the guarantee deposit is not paid after it expires?" are the most common problems faced by construction companies. On March 12, 2015, the plaintiff, Shandong A Construction Installation Co., Ltd., and the defendant, Beijing B Engineering Co., Ltd., signed a "Construction Labor Subcontracting Contract" to undertake the installation of the central air conditioning system for C World Trade Mall (Areas 1 and 2), with a contract price of 6.92 million yuan. On May 19, 2017, the two parties signed another contract to undertake the new commercial ventilation and air conditioning system project in the basement of Area 2 of C World Trade Mall (E14), with a provisional estimate of over 312,000 yuan. Both contracts stipulated that B Company would review the settlement report within 60 days after the completion and acceptance of the project, and pay the final payment within 30 days after receiving the owner's payment. The quality guarantee deposit was set at 5% of the settlement price, with a warranty period of two years. In March 2024, the two parties signed the "Subcontract Project Completion Settlement Sheet", confirming a settlement of 6.98 million yuan for the first item and over 358,000 yuan for the second item. After verification, B Company had already paid over 7.13 million yuan, leaving a balance of 204,485.57 yuan. A Company has repeatedly demanded payment but to no avail, so it entrusted Beijing Henglue Law Firm to handle the case.Li YonghuiFiled a lawsuit, requesting an order to pay the remaining project funds and interest.

II. The focus of the case

  • Focus 1: Whether the warranty period has expired and whether the payment conditions have been met.Company B refuses to pay the warranty deposit and the balance of the project payment on the grounds that the warranty period has not expired. It is necessary to review the completion time of the project and the starting date of the warranty period.
  • Focus II: Can the failure to issue invoices in full amount serve as a reason for refusal to pay?Company B argued that the plaintiff failed to issue a full invoice, so the payment should not be made.
  • Focus Three: Confirmation of the amount of the debt.Both parties have no objections to the amount of the settlement and the payments made, but it remains unclear whether the fact of the outstanding debt is clear.

III. Professional intervention by Hengluo Law Firm

The party involved (the plaintiff) claims that:Company A has completed the construction as agreed and the project has been put into use for many years. Company B should pay the remaining project funds and the interest from the date of settlement; the warranty period has long expired, and the conditions for the payment of the warranty deposit have been met.

The defendant (Company B) argued that:Both contracts' warranty periods have not expired, so the warranty deposit should not be paid; the plaintiff failed to issue a full invoice, so according to the contract, it is not obligated to make the payment.

Hengluo Lawyer's Representation Opinion:Li YonghuiThe lawyer pointed out that both subcontracts were genuine expressions of intention and did not violate mandatory legal provisions, being legal and valid. Both parties should fully perform their obligations. Company A has completed the construction as agreed, and the project has been completed and put into use for many years. Regarding the warranty period, the contract stipulates that it starts from the date of the project's acceptance and is valid for two years. The projects involved were completed and put into use in January 2016 and at the end of August 2017, respectively. By the time of settlement in March 2024, the warranty period had long since expired. B Company's refusal to pay on the grounds that the warranty period had not yet expired lacks factual basis. Moreover, the settlement invoice in March 2024 should be regarded as a final confirmation of the project's quality passing inspection and no objection to the settlement amount. Regarding interest, the parties completed the final settlement on March 23, 2024. Company A claims that interest should be calculated from that date according to the lending market interest rate quoted by the National Interbank Funding Center, which is in line with legal provisions and the spirit of the contract and should be supported.

IV. Outcome of the case

After trial, the court determined that: the two subcontracting contracts are legal and valid; the amount of the project payment is clear, and the settlement list confirms that it is 6.98 million yuan and 358,095.52 yuan respectively. B Company has no objection to the amount, and the payments already made are 6.92 million yuan and 213,609.92 yuan respectively, with an outstanding balance of 204,485.57 yuan, which is a clear fact; A Company stated that the project was completed and put into use in 2016 and 2017, and B Company did not provide evidence to refute this. The project has been operated for many years, far exceeding the two-year warranty period, and the conditions for paying the warranty deposit have long been met. Based on the above, the court ruled that: the defendant, Beijing B Engineering Co., Ltd., shall pay the plaintiff, Shandong A Construction and Installation Co., Ltd., the project payment of 204,485.57 yuan and interest (based on 204,485.57 yuan, from March 23, 2024 to the date of actual settlement, calculated at the lending market quotation rate announced by the National Interbank Funding Center during the same period) within ten days from the effective date of the judgment; the case acceptance fee of 4,368 yuan shall be borne by the defendant.

5. Henglu Law Firm's Advice

This case is handled by Beijing Henglu Law Firm.Li YonghuiAgent. Disputes in the field of construction projects often involve large amounts of money and complex legal relationships. Construction enterprises should clearly stipulate key terms such as the project price, payment time, warranty period, and payment of the warranty deposit. During the construction process, they should pay attention to keeping construction records, acceptance documents, and settlement vouchers. If they encounter delays in project payments, they should promptly entrust professional lawyers to protect their rights through legal means.

VI. Common Questions and Answers about Cases Involving Arrears in Project Payments

  1. Q: What should I do if the client refuses to pay the final payment after the project is completed?
    A:First, send a letter to collect the payment and secure evidence such as settlement notes and acceptance notes. If no agreement can be reached through negotiation, initiate legal proceedings promptly to claim the project payment and overdue interest.
  2. Q: Can I sue if the warranty deposit is not paid when it's due?
    A:After the warranty period (usually two years) expires and there are no quality issues, the conditions for the payment of the warranty deposit are met, and the party can sue to demand the return of the deposit.
  3. Q: Can Party A refuse to pay the project funds if the invoice amount is not fully stated?
    A:The obligation to issue an invoice generally does not constitute a defense against refusal to pay the principal debt. The court usually orders payment first, and the invoice issue can be dealt with separately.
  4. Q: When does the interest on the project payment start to be calculated?
    A:According to the agreement, the interest is usually calculated based on the LPR of the same period from the final settlement date or the due date until the actual repayment date.
  5. Q: Is the subcontract valid?
    A:A subcontracting contract that meets the relevant qualifications, expresses the parties' true intentions, and does not violate mandatory provisions is valid. Both parties should perform their obligations in accordance with the contract.