Friday 11 February 2022

Managing project contract processes

The contract management process includes five processes: contract signing, contract performance, contract modification, contract file, and contract breach claims, each of which has key points that require special attention.


1. contract management process:

(1) contract signing management. market research, credit investigation, risk analysis...

(2) contract performance management. tracking and management of fulfillment. dispute resolution takes precedence over negotiation (consultation), mediation, arbitration, and litigation. if arbitration is agreed and the finality of the arbitration is agreed, it cannot be brought to court.

(3) contract change management. formal submission by one party in writing and consent of the other party shall take effect. if the change causes losses to the other party, the responsible party shall be responsible for compensation, except for exemption from liability according to law.

(4) contract file management. it is the basis for the entire contract management. contracts generally require computer printing, handwritten marginal notes and modifications that do not have legal effect (a handwriting stamp is possible).

(5) contract breach claim management. since there is a breach of contract and facts on one side and has caused losses, the responsible party shall bear the loss. a claim is not an act of punishment, it is a compensation. the claim is divided into a construction period claim and a cost claim, if the force majeure causes the default, it can only claim the construction period, and the non-claimable costs; the buyer causes the breach, not only extends the construction period to the seller, but also compensates the cost; the seller causes the breach of contract and can claim the cost. the principles to be followed in the claim include: the rationality of the claim, the validity of the basis of the claim, and the correctness of the claim calculation. the order of claim mediation is generally: mediation by the supervising engineer , mediation by the competent government construction agency — mediation or arbitration by the economic contract arbitration commission.


2. contract claim process:

(1) filing a claim (within 28 days of the occurrence of the claim, a written notice of claim shall be issued to the supervising engineer)

(2) submit claim information (within 28 days after the notice of claim, submit written claim materials to the supervising engineer)

(3) reply of the supervising engineer (within 28 days of receiving the notice, give a reply)

(4) consequences of the supervising engineer's late reply (deemed to be recognized)

(5) continuing claims (within 28 days)

(6) arbitration and litigation (after the failure of the claim)


3. principles of contract interpretation:

(1) the principle of dominant language

(2) applicable law principles

(3) principle of overall interpretation

(4) the principle of fairness and good faith


strict control of the five processes of contract management, as well as the key points of attention in each process, can effectively improve the efficiency of performance and escort the smooth progress of the project procurement process.

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