In practice, many construction contract dispute cases may involve judicial appraisal of project cost. If the parties have settled the price of the construction project before the litigation and reached a settlement agreement, and one of the parties in the litigation applies for the appraisal of the project cost, will the court support it?
Can I apply for project cost appraisal?
In July 2021, the defendant Da Zhuang, as the employer, awarded Project A to the plaintiff Xiaoshuai, and then the two parties signed the Construction Contract, and Xiaoshuai carried out the construction in accordance with the contents of the contract. After the completion of the project and the acceptance of the acceptance, the two parties checked the accounts, and Da Zhuang issued an IOU to Xiaoshuai, stating: The total price of Project A is 1 million yuan, 600,000 yuan has been paid, and 400,000 yuan has not been paid. Later, Da Zhuang did not pay the remaining project money, and Xiao Shuai sued the court.
During the trial, the defendant Da Zhuang argued that the contract involved in the case was invalid because it violated the prohibitive provisions of the law, and applied to the court to appraise the cost of the project on the grounds that the settlement value of the project involved in the case was far lower than the contract price entered into by the original defendant in the completion settlement report issued by the construction unit, and the contract price was obviously unreasonably high.
After trial, the court held that the defendant Dazhuang subcontracted the project involved in the case to the plaintiff Xiaoshuai, who did not have construction qualifications, and the contract signed by the two parties was invalid because it violated the prohibitive provisions of the law. Although the contract involved in the case is invalid, the two parties have actually performed, and the project involved in the case has been accepted and delivered for use, and at the same time, the two parties have reconciled and settled, and Da Zhuang issued an IOU to Xiao Shuai, so Da Zhuang should pay Xiao Shuai the remaining project money and corresponding interest in accordance with the agreement of the contract on the project price.
In addition, Xiaoshuai and Dazhuang agreed to settle the project payment at a fixed price of 1 million yuan, and Dazhuang applied for an assessment of the project cost on the grounds that the difference between the price and the settlement price issued by the construction unit was too large. In summary, the court ordered the defendant Dazhuang to repay the plaintiff Xiaoshuai the arrears of 400,000 yuan and the corresponding interest in accordance with the law.
Project cost appraisal
Project cost appraisal refers to the appraisal agency to accept the people's court or arbitration institution entrusted, in the litigation or arbitration case, the appraiser uses the science and technology and professional knowledge of the project cost to identify, judge and provide appraisal opinions on the specialized issues involved in the project cost dispute.
Circumstances that may support the application for project cost appraisal
For example, the Chongqing High People's Court believes that in any of the following circumstances, the parties apply for the appraisal of the construction project cost, and the people's court considers that the construction project cost cannot be determined according to the evidence provided by the parties after examination (for reference only):
1. The contract stipulates that the project cost shall be determined by means of a fixed total price, and at the same time, the risk scope included in the fixed total price, the calculation method of the risk cost and the adjustment method of the contract price outside the risk scope have been agreed, and the project cost outside the risk scope needs to be determined.
2. The contract stipulates that the project cost shall be determined by means of fixed unit price, and the project cost shall be determined by appraisal.
3. The contract stipulates that the cost plus remuneration method shall be used to determine the project cost, and the construction cost and remuneration shall be determined by appraisal.
4. The contract stipulates that the project cost shall be determined by means of adjustable price, and the project cost shall be determined by appraisal.
5. The construction project is not completed, and the cost of the completed project needs to be determined by appraisal.
6. The contract does not stipulate the method of determining the project price, and the project cost needs to be determined by appraisal.
7. Other circumstances in which the people's court believes that it is necessary to determine the cost of the project by means of appraisal.
The application for cost appraisal is not supported
1. If the parties settle the project price in accordance with the agreement of the fixed price, and one party requests the appraisal of the construction project cost, the people's court shall not support it;
2. The parties have reached an agreement on the price of the construction project before the litigation, and one of the parties to the litigation applies for the appraisal of the project cost, the people's court shall not approve it.
In the above case, the two parties agreed to settle the project price at a fixed price of 1 million yuan, and had settled the construction project price before the litigation, and reached a settlement agreement, so the court did not support the party's application for project cost appraisal.
The scope of project cost appraisal
The scope of project cost appraisal is extensive and complex, and the appraisal of contract disputes, evidence deficiency, measurement disputes, pricing disputes, construction period claims, cost claims, engineering visa disputes, and contract termination disputes all belong to the scope of project cost appraisal.
According to the relevant laws and regulations, where the parties have disputes over some of the facts of the case, only the disputed facts are to be evaluated, except where the scope of the disputed facts cannot be determined, or where both parties request an appraisal of all the facts. Therefore, after the people's court approves the party's appraisal application, it will generally determine the entrusted appraisal matters, scope, appraisal period, etc. according to the needs of the party's application and ascertaining the facts of the case, and generally will not appraise the project cost that can be determined without dispute or by using existing evidence.
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Note: The name of the person in the article has been changed, and the information quoted in the case is from the Shandong High Court
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