1. How to understand construction contract payment guarantee?

Ensuring payment in construction contracts is an important process specified in Article 17 of Decree 37/2015/ND-CP. According to this regulation, payment guarantee is to ensure that the contractor is able to fulfill its payment obligations under the construction contract signed with the contractor. To achieve this goal, the contractor must take a number of specific measures.

First of all, the contractor needs to take measures to prove solvency, including developing a capital arrangement plan and ensuring that this plan is approved. The capital arrangement plan is an important part that helps the contractor prove its financial ability to make payments according to the agreed schedule in the contract.

In addition, payment guarantees can also be implemented through other means such as support from banks or credit institutions. The contractor can provide documents or vouchers from the bank, confirming that they have the ability to pay according to the contract.

Furthermore, the principal can agree with the contractor on providing credit or making loan agreements with financial institutions. This enhances liquidity and ensures that the construction project is implemented smoothly.

Most importantly, the prohibition prohibits the contractor from signing a construction contract if they do not have a capital plan to ensure payment according to the agreed schedule in the contract, unless these are construction works under orders. urgent. This ensures that construction projects are carried out according to plan and ensures the interests of both parties in the cooperation process.

2. Which party is responsible for ensuring payment when signing a construction contract?

The contractor has the right to temporarily suspend the implementation of the construction contract according to the provisions of Article 40, Clause 2 of Decree 37/2015/ND-CP. In this case, the right to suspend is exercised according to specific regulations, including conditions, procedures, and compensation levels agreed between the principal and the contractor in the construction contract. build.

Specifically, it stipulates that there are specific situations that give the contractor the right to temporarily suspend the performance of work in a construction contract. In case the contractor does not meet the requirements for quality, labor safety and progress according to the signed contract, the contractor has the right to temporarily suspend the implementation of the contract.

Another important thing is that the contractor also has the right to temporarily suspend contract performance and extend the contract implementation schedule when the contractor violates payment agreements. If the principal does not pay the full value to the contractor according to the agreed payment period, and violates the regulations on payment deadlines, the contractor has the right to temporarily suspend the work and extend the progress. contract performance.

The regulations are also clear about the responsibilities of both parties before suspending work. The contractor must notify the contractor in writing 28 days in advance, clearly stating the reason for temporary suspension of implementation. After that, both parties are responsible for negotiating to resolve the problem and continue to comply with the contract agreement, unless force majeure occurs.

Note that if the party temporarily suspending the performance of the contract does not comply with the notice regulations or the reason for the suspension is not consistent with the contract regulations, they must compensate the other party for damages. This emphasizes the importance of transparency and compliance with regulations during the implementation of construction contracts

3. Temporarily suspend construction contract performance when there is no payment guarantee

Regulations on the contractor's right to temporarily suspend construction contract implementation are detailed in Article 40, Clause 2 of Decree 37/2015/ND-CP. In this situation, the right to suspend is exercised according to specific conditions and procedures, along with agreement on the level of compensation between the principal and the contractor in the construction contract.

It is important to note that there are certain specific situations where the contractor has the right to suspend work under a construction contract. Accordingly, the contractor has the right to suspend if the contractor does not meet the requirements for quality, labor safety and progress according to the signed contract.

Another case is when the contractor violates payment agreements, especially does not pay the full value to the contractor according to the agreed payment period, and violates regulations on payment deadlines. . In this situation, the contractor has the right to temporarily suspend the construction contract and extend the contract implementation schedule.

Before exercising the right to suspend, the contractor must notify the contractor in writing 28 days in advance and clearly state the reason for temporary suspension. This regulation emphasizes the transparency and responsibility of the contractor in notifying this decision. During this 28-day period, both parties must negotiate a settlement to continue to comply with the signed contract agreement, unless there are force majeure cases.

If the contractor does not comply with the notice regulations or the reason for suspension is not consistent with the provisions of the contract, they will have to compensate the contractor for damages. This emphasizes compliance with contract terms and respect for legal regulations to ensure fairness and transparency in the construction contract implementation process.

4. In case of termination of construction contract

According to the provisions of Clause 8 of Article 41 of Decree 37/2015/ND-CP, the contractor has the right to terminate the construction contract in the following specific situations:

- The contractor dissolves, goes bankrupt or transfers the construction contract to another person or organization without the consent of the contractor: In case the contractor goes bankrupt, dissolves, or transfers the contract Without the consent of the contractor, the contractor has the right to terminate the construction contract. This is to protect the interests of the contractor when there are sudden changes from the contractor.

- After fifty-six (56) consecutive days the work is stopped due to the principal's fault, unless the parties agree otherwise: If the work is stopped continuously for a period of 56 days due to the principal's fault, the contractor has the right to terminate the construction contract. This emphasizes the acceptability and continuity of the contractor in terminating the contract when the contractor fails to properly perform its obligations.

- The principal does not make payment to the contractor after 56 days from the date the principal receives complete and valid payment documents, unless the parties agree otherwise: In case the principal does not make payment to the contractor, After receiving the contract 56 days after the contractor receives all valid payment documents, the contractor has the right to terminate the construction contract. This ensures that the contractor maintains transparency and fairness in the payment process, helping to protect the interests of the contractor.

In all cases, the termination of a construction contract must comply with the specific provisions agreed upon in the contract and the provisions of law to ensure fairness and compliance with contract terms.