[Case Summary]This case involves a dispute over a construction contract. On July 21, 2017, X Chen Company and X Bang Company signed a "Beijing Construction Contract", with a contract amount of 500,000 yuan. X Chen Company completed the project on schedule and handed it over for use after passing the acceptance inspection in November 2017, but X Bang Company defaulted on the remaining 300,000 yuan in project payments. X Bang Company raised defenses such as the statute of limitations having expired, the project not having passed the acceptance and settlement, the project quantity being uncertain, and the failure to notify X Chen Company of the transfer of the creditor's rights. X Chen Company entrusted Beijing Henglu Law Firm to handle the case.Wu JianiThe lawyer represented the client and claimed 300,000 yuan in project payments and interest under the principle of contractual privity. The lawyer initiated property preservation and adjusted the litigation strategy, only claiming the established rights based on the principle of contractual privity. The court adopted the lawyer's opinion, confirmed the outstanding 300,000 yuan based on the "Confirmation Letter of Accounts Payable and Receivable", and ruled that X Bang Company should pay the project payment of 300,000 yuan. Core disputes: Statute of limitations and contractual privity. Applicable legal provisions: Articles 7 and 465 of the Civil Code.

I. Review of the case

"Defaulting on project payments" and "failing to pay after project completion and delivery" are common disputes in the construction industry. On July 21, 2017, X Chen Company and X Bang Company signed the "Beijing Construction Project Contract", with a contract amount of 500,000 yuan, stipulating that X Chen Company would carry out the construction and X Bang Company would make the payments.

X Chen Company completed the project on schedule as agreed and passed the acceptance and delivery for use in November 2017. Since then, X Chen Company has repeatedly demanded that X Bang Company pay the outstanding project funds through sending lawyer's letters, "Letters of Inquiry into Accounting Transactions", "Applications for Payment of Project Funds", making phone calls, and visiting the company in person, but X Bang Company has been delaying the payment for a long time, citing the failure of XX Bank Co., Ltd. Dianmen Branch to pay the project funds on schedule as the reason.

As of the litigation, X Company still owes 300,000 yuan unpaid, causing significant economic losses to X Chen Company. The case also involves a related dispute with another company. To ensure the maximum legal interests of the parties, Hengluo Law Firm initiated preservation measures and promptly adjusted the litigation strategy, claiming only the rights already determined under the contract between the original defendant and the plaintiff according to the principle of contractual relativity. Subsequently, X Chen Company entrusted Beijing Hengluo Law Firm to handle the case.Wu JianiThe lawyer represented the client in this case and claimed that X Company should pay the outstanding project funds of 300,000 yuan and the interest thereon.

II. The focus of the case

  • Focus 1: The project involved in the case occurred in 2017. Has the statute of limitations for litigation exceeded three years as of now?The defendant raised the statute of limitations as a defense, so it is necessary to review the facts of the plaintiff's collection efforts and rights claims.
  • Focus II: The project has not been inspected and settled by the defendant, and the amount of the project is uncertain. How should the amount of the arrears be determined?The core evidence is the amount of the outstanding payment specified in the "Confirmation Letter of Accounts Receivable and Payable".
  • Focus Three: Whether the other contractual claims of the affiliated company should be dealt with together in this case.This involves the principle of contractual privity and the identification of litigation subjects.

III. The professional intervention of Hengluo Law Firm

The plaintiff claimed that:The X Chen Company completed and delivered the project on schedule, but the X Bang Company defaulted on the payment of the project funds, amounting to 300,000 yuan. We request the court to order the defendant to pay the outstanding project funds of 300,000 yuan and the corresponding interest, among other things.

The defendant (X Company) argued that:1. The project involved in the case occurred in July 2017, and the statute of limitations for litigation has now exceeded three years; 2. I do not agree with the plaintiff's claims and do not agree to simply sum up the contractual project payments. The project involved in the case has not undergone acceptance and settlement, and the actual project quantity cannot be determined; 3. The project involved in the case is not a fixed-price contract, and the payment should be settled according to the actual project quantity; 4. Regarding the specific construction workers, X Chen Company claims that they are the actual construction workers, and they should not claim contractual payments if they have not actually arrived at the construction site; 5. The creditor transfer agreement provided by X Chen Company has not been notified to the debtor, and it is not effective against the debtor.

Hengluo Lawyer's Agency Opinion:The lawyer argued that the contract signed by the plaintiff and the defendant was a true expression of their mutual intent and was binding on both parties. The project was completed and put into use in 2017, and the submitted "Letter of Inquiry for Accounts Payable and Receivable" confirmed that the defendant still owed 300,000 yuan under the contract. Regarding the defendant's request to handle the disputes of the two contracts together, the lawyer pointed out that the two contracts involved different parties, belonged to different legal relationships, and the assignees of the creditor's rights and the actual constructors of the contracts did not claim in this case, so the disputes should be handled in a separate case.

  • Prepare sufficient key evidence, including the "Beijing Construction Project Construction Contract", the "Letter of Inquiry for Accounts Payable", the acceptance and delivery materials, and multiple collection materials
  • Regarding the defense of statute of limitations, the plaintiff's claim of rights is firmly established by the continuous collection efforts
  • Regarding the defense of contractual confusion, we uphold the principle of contractual relativity and only address the established rights claims under the contract in this case, in order to avoid procedural entanglements
  • Promptly initiate property preservation to freeze the defendant's liable assets and ensure the smooth execution of subsequent enforcement measures

IV. Outcome of the case

The court accepted some of the opinions and claims of Hengluo Lawyer and held that through the "Confirmation Letter of Accounts Receivable and Payable", it could be determined that the defendant still owed the contract amount of 300,000 yuan; although the contract stipulated that the payment would be made "according to the progress of the payment by Party A", the project involved in the case was completed and accepted in 2017 and handed over to the owner for use. The defendant also failed to provide evidence to prove that it had actively settled and demanded the project payment from the owner. Therefore, the court supported the plaintiff's claim that the defendant should pay the overdue project payment. In accordance with Article 7 and Article 465 of the Civil Code of the People's Republic of China, Article 1, paragraph 3 of the Supreme People's Court's Interpretation on the Application of the Time Effect of the Civil Code of the People's Republic of China, and Articles 90 and 91 of the Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China, the court ruled: First, within seven days from the date of the effective judgment, the defendant shall pay the plaintiff the project payment of 300,000 yuan; Second, the plaintiff's other claims are dismissed.

5. Hengluo Law Firm's Advice

This case is handled by Beijing Henglu Law Firm.Wu JianiAttorney (Practice Certificate No.: 11101202011245064, subject to the certificate issued by the judicial administrative organ): Agent. Hengluo Law Firm advises: During the performance of the construction contract, the contractor shall timely handle the acceptance and delivery and settlement, and properly keep the creditor's evidence such as the "Letter of Inquiry for Accounts Receivable", the reminder letters, and the visa sheets; pay attention to the statute of limitations and claim rights regularly; when suing to recover the project payment, the applicant may apply for property preservation at the same time to prevent the defendant from transferring the property.

VI. Common Questions and Answers about Cases Involving the Recovery of Construction Project Payments

  1. Q: What should I do if the project has been completed and delivered, but the employer keeps delaying the payment of the project funds?
    A:You should send a letter to collect the payment as soon as possible and keep evidence such as the Confirmation Letter of Accounting Transactions. If the negotiation fails, you can sue to claim the unpaid project funds and interest, and apply for preservation of evidence if necessary.
  2. Q: If there's no agreed upon payment deadline, how is the statute of limitations for litigation over project payments calculated?
    A:The statute of limitations begins to run from the date when the right holder knows or should have known that their rights have been infringed and the obligee's identity has been identified. Continuous collection efforts can interrupt the statute of limitations, and the plaintiff's multiple collection efforts in this case are crucial.
  3. Q: If there's no written acceptance and settlement for the project, how can we prove the amount of the outstanding debt?
    A:The unpaid amount can be verified by means of letters of inquiry, account statements, visas, the fact of delivery and use, and records of communication between the parties. The delivery and use itself also serves as evidence.
  4. Q: Is it legal for the employer to refuse to pay the project funds on the grounds that "the upstream party hasn't paid the money"?
    A:Under the principle of contractual relativity, the employer shall not use payment disputes with third parties to evade its payment obligations under this contract, unless there is an explicit provision in the contract to this effect.
  5. Q: Can I apply for property preservation at the same time as suing to recover the project payment?
    A:Yes, the plaintiff may apply for the preservation of the defendant's property when suing or during the litigation to prevent the reduction of the liability property and ensure the enforcement of the judgment.