[Case Summary]This case involves a dispute over a subcontracting contract for construction services. Company A subcontracted the mechanical and electrical engineering renovation and transformation of Building C in Beijing to Company B. The total settlement price was 987,123.38 yuan, but Company B only paid 732,792.79 yuan, leaving a balance of 254,330.59 yuan. Company B refused to pay on the grounds that the payment conditions had not been met, that it had already issued invoices in full, and that there was no overdue payment. Beijing Hengluo Law FirmLi YonghuiOn behalf of the plaintiff, Company A, it is claimed that the settlement invoice is legal and valid, the warranty period has expired, and the defendant should pay the overdue interest. The core disputes are the validity of the settlement invoice, the payment conditions, and the overdue interest. In the end, the court ruled that the defendant should pay the remaining project funds of 254,330.59 yuan and the interest. Applicable laws: Articles 509 and 577 of the Civil Code.

I. Review of the case facts

"Can the subcontractor keep delaying payment just because they haven't received the settlement invoice?" and "Is it reasonable to deduct 5% of the payment after the warranty period has passed?" are common questions in project payment collection. In February 2021, Beijing B Energy-saving Engineering Co., Ltd. subcontracted the mechanical and electrical engineering of the Beijing C Building renovation project to A (Beijing) Construction Engineering Co., Ltd., and signed the "Beijing Municipal Housing and Urban Infrastructure Engineering Labor Subcontracting Contract". A Company undertook the installation of the ventilation and air conditioning system on the guestroom floor, with a fixed unit price of 3,500 yuan (including tax) per room, an estimated total of 560,000 yuan, and final settlement based on the actual number of rooms installed; payments were made on a monthly progress basis, with 95% of the payment made after the completion of the project, and the remaining 5% of the warranty deposit to be refunded after two years of warranty without quality issues; B Company appointed Li Xiang as the on-site representative, and all expenses and construction period instructions required his signature for approval. A Company completed all the construction work strictly, and B Company acknowledged that the project was completed on May 20, 2021 and put into use in October 2021. On January 17, 2025, B Company's project manager Li Xiang, deputy general manager Liu Ning, and budget department staff Zhou Quan signed the "Subcontracted Project Completion Settlement Invoice" with A Company's authorized representative, confirming a total settlement price of 987,123.38 yuan. As of the date of the lawsuit, B Company had only paid 732,792.79 yuan, leaving a balance of 254,330.59 yuan unpaid. A Company entrustedLi YonghuiFile a lawsuit with the court.

II. The focus of the case

  • Focus 1: Is the "Completion Settlement Statement for Subcontracted Projects" legal and valid?Company B claimed that Company A failed to submit a signed and confirmed settlement request for payment, and the conditions for payment had not been met.
  • Focus 2: Whether the payment conditions have been fully satisfied.The project was completed and put into use in 2021, and the warranty period expired in October 2023. Does it meet the conditions for the return of the warranty deposit?
  • Focus 3: Whether it constitutes overdue payment and interest.Company B claimed that it had not submitted a legally valid settlement note, so there was no breach of contract and it should not pay interest.

III. The professional intervention of Hengluo Law Firm

The party concerned (Plaintiff A Company) alleges that:The project has been fully completed. The settlement note in January 2025 confirmed a total price of 987,123.38 yuan, but Company B only paid 732,792.79 yuan. It should pay the remaining 254,330.59 yuan and the overdue interest calculated according to the LPR from the date of settlement confirmation.

The defendant (Company B) argued that:The project did not meet the payment conditions stipulated in the contract, and Company A failed to provide the signed and confirmed settlement application for payment as agreed; the invoiced amounts have been paid in full; and there is no overdue payment, so no interest will be paid.

Hengluo Lawyer's Agency Opinion:Li YonghuiThe lawyer pointed out the focus of the dispute: the settlement document is legal and valid. The contract clearly stipulates that Li Xiang, the on-site representative of Company B, has the right to sign the cost orders involved. The settlement document not only has Li Xiang's signature, but also has been jointly confirmed by the deputy general in charge and the budget department, which is the true expression of the intention of both parties. It is sufficient to prove that the total settlement price is 987,123.38 yuan. The payment conditions have been fully met. The project was completed in May 2021 and put into use in October 2021. The warranty period expired in October 2023, satisfying the condition of "returning the warranty deposit without quality problems after the warranty period expires". Company A has fully fulfilled its obligations. Company B should pay interest for late payment. After the settlement was confirmed on January 17, 2025, Company B failed to make the payment as agreed. According to the relevant provisions of the Civil Code, Company A has the right to claim overdue interest calculated according to the LPR of the same period from the date of settlement confirmation.

IV. Outcome of the case

The court held that the infrastructure project subcontracting agreement signed by the plaintiff and the defendant constitutes a true expression of intention and does not violate mandatory provisions, and is therefore legal and valid. All parties should perform their obligations according to the agreement. The plaintiff has completed the subcontracted project as agreed, and the defendant admitted that the project involved in the case had been put into use in 2021 and the warranty period had expired. The contract stipulates that Li Xiang is the defendant's on-site representative, and all related expenses must be approved by him. Therefore, Li Xiang has the right to sign the settlement statement on behalf of the defendant, and the defendant should pay the project funds according to the settlement amount. Failure to make full payment constitutes a breach of contract, and the defendant should bear the breach of contract liability of continuing to perform the contract and compensating for losses. According to Articles 509 and 577 of the Civil Code, the court ruled that: the defendant, Beijing B Energy-saving Engineering Co., Ltd., shall pay the remaining project funds of 254,330.59 yuan and interest (based on 254,330.59 yuan, calculated at the lending market quotation rate announced by the National Interbank Funding Center from January 17, 2025 to the actual payment date) to the plaintiff, A (Beijing) Construction Engineering Co., Ltd., within ten days after the judgment takes effect; and the defendant shall bear all the case acceptance fees and preservation fees. 法院认为，原告与被告签订的基础设施工程劳务分包合同系真实意思表示，未违反强制性规定，合法有效，各方应按约履行。原告已按约完成分包工程，被告承认涉案项目已于2021年投入使用，质保期已届满。合同约定李响为被告现场代表，相关费用需经其签字，故李响有权代表被告签署结算单，被告应按结算金额支付工程款，未履行足额付款构成违约，应承担继续履行并赔偿损失的违约责任。依据《民法典》第五百零九条、第五百七十七条，判决：被告北京B节能工程股份有限公司于判决生效后十日内向原告A（北京）建设工程有限公司支付剩余工程款254330.59元及利息（以254330.59元为基数，按全国银行间同业拆借中心公布的贷款市场报价利率，自2025年1月17日起计算至实际支付之日止）；案件受理费及保全费均由被告负担。

5. Hengluo Law Firm's Advice

This case is handled by Beijing Henglu Law Firm.Li YonghuiAgent. Preserving evidence for project protection is crucial: when signing the contract, clarify core terms such as project price, payment milestones, performance bonds, and breach of contract liabilities to avoid ambiguous expressions; during construction, timely preserve completion acceptance reports, visa forms, and communication records; and when encountering project payment delays, promptly engage professional lawyers to protect rights through legal channels to avoid missing the best opportunity.

VI. Common Questions and Answers about Project Payment Reminders

  1. Q: Can the subcontractor keep delaying payment just because they haven't received the settlement statement?
    A:No. Both parties have signed and confirmed the settlement list, and the project has been put into use. The payment conditions have been met, and the delay in payment constitutes a breach of contract.
  2. Q: Is it reasonable to deduct 5% even after the warranty period has expired?
    A:If there are no quality issues after the warranty period (usually two years), the 5% warranty deposit should be refunded. Otherwise, the buyer can sue the seller to demand payment.
  3. Q: Is the settlement form signed by the on-site representative valid?
    A:If the contract authorizes on-site representatives to sign documents related to expenses, their signatures shall represent the company, and the settlement statements shall be legal and valid.
  4. Q: How is the overdue interest on the project payment calculated?
    A:There is an agreement, and the interest shall be calculated according to the agreed terms. If there is no agreement, the interest shall generally be calculated from the date of settlement confirmation to the date of actual payment according to the LPR of the same period.
  5. Q: Can I request the final payment even though the project has been used but not formally accepted yet?
    A:The project's delivery for use is usually regarded as an acceptance of the project, so it's hard for the employer to refuse to pay the balance on this basis and gain support from others.