[Direct answer]In the Beijing area, in principle, the subcontractors and their contractual counterparts (general contractors or subcontractors) settle accounts according to the subcontract; the employer generally only assumes responsibility for the actual constructors within the scope of the unpaid project price. According to Article 791 of the Civil Code of the People's Republic of China, the employer may enter into a construction project contract with the general contractor, and the general contractor may, with the consent of the employer, entrust part of the work to a third party to complete, but it is prohibited to subcontract the entire project to a third party, to divide the entire project into parts and subcontract them under the guise of subcontracting, or for the subcontractors to subcontract the projects they have contracted. The Interpretation of the Supreme People's Court on the Application of Law in the Trials of Disputes over Construction Contracts also stipulates the rights of the actual constructors in the case of illegal subcontracting and subcontracting. Action guidance: First, check the contractual counterparts, then check whether there is illegal subcontracting and unpaid project prices.

I. Problem Background and Typical Scenarios

After the project is subcontracted layer by layer, those doing the work at the bottom often don't get paid. A typical scenario is that the subcontractor completes the work, but the general contractor delays payment on the grounds that "the employer hasn't paid"; or the actual contractors claim payment from the employer, only to be told "we haven't signed a contract with you". The settlement relationship between the general contractor, the subcontractor, and the employer directly determines who to ask for payment from.

II. Key points of dispute

Firstly, the validity of the subcontract and the basis for settlement; Secondly, the legal consequences of illegal subcontracting and transferring contracts; Thirdly, whether the actual constructor can directly claim against the employer; Fourthly, the definition of the scope of unpaid project funds. The core issue is the balance between contractual relativity and the extension of responsibilities.

III. Professional analysis by Henglue Lawyers

The experience of Henglue in handling construction project cases is that the first step in settling settlement disputes is to determine the "contractual counterparty", and then see if it is possible to pursue compensation upstream. Under normal circumstances, there is a contractual relationship between the subcontractor and the general contractor (or subcontractors), and the settlement should be carried out according to the pricing methods and payment milestones stipulated in the subcontract. The general contractor cannot indefinitely delay payment to the subcontractor on the grounds that the employer has not paid, unless the contract explicitly stipulates the "back-to-back" payment conditions and such stipulation is legally valid. In the case of illegal subcontracting and transferring of contracts, the law sets special rules to protect the actual constructors: the actual constructors can claim rights against the employer, and the employer shall only bear responsibility to them within the scope of the unpaid project price. The application of this rule has certain conditions, requiring proof of the actual construction facts, the amount of the project price, and the employer's outstanding project price to the general contractor. In addition, if the subcontract is invalid due to illegal subcontracting, and the project has passed the acceptance, the compensation can be determined according to the contract agreement; if the acceptance is not passed, it shall be dealt with in accordance with relevant regulations. In practice, the focus of disputes often lies in three aspects: how to determine the project quantity and settlement amount, the scope of the unpaid project price, and the payment situation between the employer and the general contractor. The construction party should pay attention to collecting the subcontract, settlement materials, change orders, payment records, and the settlement materials of the employer and the general contractor, and apply to the court for retrieval if necessary. When courts in Beijing handle such cases, they usually focus on reviewing the validity of the contract, the actual construction facts, and the unpaid amount. It should be noted that illegal subcontracting and transferring of contracts may face administrative responsibilities themselves. When choosing a cooperation model, the construction party should strive to standardize it to avoid increasing the difficulty of protecting rights due to the invalidity of the contract.

IV. Practical suggestions and legal basis

The first step is to review the pricing method, payment milestones, and settlement basis of the subcontract. The second step is to organize settlement materials, change orders, and payment records to confirm the amount owed. The third step is to verify whether there are any illegal subcontracting or contract transfer situations, and determine whether claims can be made against the employer. The fourth step is to investigate the payment situation between the employer and the general contractor, and, if necessary, apply to the court for retrieval of relevant information. Main legal basis: Article 791 and Article 793 of the Civil Code of the People's Republic of China (on the handling of invalid contracts) (effective January 1, 2021), and the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes (effective January 1, 2021). Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

For subcontract settlement, first find the contractual counterparty; if the contract is invalid or the subcontracting is illegal, then see if the employer can be involved, and the settlement shall be limited to the amount of the project payment owed by the employer. For matters involving project payment settlement, it can be resolved throughReal estate transactions and construction projectsObtain a comprehensive solution for the service; those involving contracts and commercial disputes can be integrated togetherBusiness and contract disputes in enterprisesPlate; for reference, please refer to the execution of project paymentsCreditor's rights and debts, and enforcementFor matters related to corporate law, please feel free to consult us.Intellectual property protection and corporate lawOther difficult issues can be resolved throughSpecial servicesDocking.

VI. Frequently Asked Questions

Q1: The general contractor said that the employer hasn't paid the money. Can they not provide me with a settlement?

It depends on the contractual provisions. If there is no legally valid back-to-back payment agreement, the general contractor cannot use this as an excuse to delay paying the subcontractor for the project for a long time. The subcontractor can claim settlement and payment according to the contract and, if necessary, resolve the matter through litigation and claim interest for late payment.

Q2: What evidence is needed to resolve a settlement dispute?

It is necessary to prepare subcontracts, settlement documents, visa and change information, quantity confirmation records, payment transactions and reconciliation statements, completion and acceptance materials, as well as the settlement and payment situation between the employer and the general contractor. The evidence should be able to prove the unpaid amount and the responsible party.

Q3: How much does a lawsuit over project payments cost?

The litigation fees shall be paid in stages according to the amount of the subject matter; the fees involved in the appraisal of construction costs shall be calculated separately. The attorney's fees shall be agreed upon based on the complexity of the dispute and the workload. It is recommended to first confirm the basis for settlement and the amount of the outstanding payment, and then decide whether to conduct an appraisal and initiate litigation.

Q4: How long does it usually take to handle such cases?

The first-instance ordinary procedure generally lasts six months, and the summary procedure lasts three months; cases involving appraisals or multiple parties may be extended. If the settlement basis is clear and the facts of the arrears are obvious, the funds can be recovered more quickly through mediation.

Q5: Can the actual constructor directly sue the employer?

It is possible in specific circumstances such as illegal subcontracting and transferring contracts, but the employer only bears responsibility within the scope of the unpaid project price. It is necessary to prove the actual construction facts and the unpaid amount, and to clarify the payment situation between the employer and the general contractor. It is recommended to determine the litigation strategy under the guidance of a lawyer.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.