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In other words, not all construction projects enjoy the priority right to compensation..
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For engineering projects that implement advance payment for material preparation in other settlement methods agreed by both parties, the contract or agreement should specify the amount and time of advance payment allocated by the employer to the contractor for project material preparation before commencement, the starting point for deducting the material preparation after commencement, the proportion of successive deductions, and the procedures and methods to be handled.
When the construction unit completes the unit project content and passes the acceptance by the owner, the owner pays the project price that constitutes the unit project content.
Project settlement is an important link in accelerating capital turnover.
The legal relationship between the parties shall be the creditor’s rights arising from the construction project contract.
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Project settlement is an important indicator for assessing economic benefits.
For the construction unit, only if the project funds are fully settled can it avoid operational risks, and the construction unit can also obtain corresponding profits, thereby achieving good economic benefits.
Improve the efficiency of capital utilization by accelerating capital turnover; 3.
The significance of completion settlement: Project settlement is a very important work in project contracting, mainly manifested in the following aspects: 1.
After completion, if the construction project or all construction and installation works of a single project have a construction period of less than 12 months, or the project contract value is less than 1 million yuan, the project price can be advanced monthly and settled once after completion.
Under the target settlement method, in order to obtain the project price, the construction unit must complete the project content within the interface according to the quality standards agreed in the contract.
The contractor must fully and appropriately fulfill its obligations as agreed in the contract, that is, the project is completed on schedule, the quality is qualified, and the completion acceptance has been passed.
Project settlement is the main indicator that reflects the progress of the project.
The construction unit should settle the project funds as soon as possible, which is conducive to repaying debts, returning funds, and reducing internal operating costs.
For projects completed across the year, an inventory of the project is conducted at the end of the year and annual settlement is handled.
If the contractor has breached the contract and the employer refuses to pay the project funds, the contractor shall not exercise the priority.
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The realization of priority can be divided into two ways: agreement and auction.
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If it fails to pay after the expiration of the demand period, the contractor may exercise the right of priority.”.
The main methods of settlement for construction projects in China include: 1.
The subject matter involved in the case shall be the construction project owned by the Employer.
The parties should try to resolve through negotiation, and only if the negotiation fails, can the creditor be allowed to directly apply to the people’s court for legal auction; The exercise of the right of priority is limited and may not be exercised for projects that are not suitable for auction or discount.
The conditions for a construction project contractor to have a driving priority are as follows: 1.
According to the proportion of the accumulated settled project price to the total contract price, it can approximately reflect the progress of the project; 2.
In other words, the project content in the contract is divided into different acceptance units.
Monthly settlement: advance payment at the end of ten days or in the middle of the month, monthly settlement, and settlement after completion.
Sectional settlement refers to the commencement of the current year, and the settlement of individual projects or unit projects that cannot be completed in the current year shall be divided into different stages according to the project image progress.
To obtain the project price as soon as possible, the construction unit must fully exert its organizational and implementation capabilities, and accelerate the construction progress on the premise of ensuring quality.
When exercising the priority, full consideration should be given to the legality of the legal priority of the construction project price, starting from the premise of reducing litigation and saving judicial resources.
“If the contractor fails to pay the price as agreed in the contract, it shall generally demand payment in advance.
The target settlement method is to decompose the content of the contracted project into different control interfaces in the project contract, with the owner’s acceptance control interface as the prerequisite for payment of project funds.
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During the construction process, one of the bases for project settlement is to settle according to the completed project.
