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Construction project contract credit system and the System

Author: SunJie
Tutor: HeBaiZhou
School: Dongbei University of Finance
Course: Technical Economics and Management
Keywords: Credit Contract Credit Construction Contract Construction Law
CLC: F407.92
Type: PhD thesis
Year: 2007
Downloads: 1193
Quote: 9
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The construction market credit system is mainly composed of four parts which are economy credit, contract credit, quality credit and professional credit. The first three parts have something coinciding. Strictly speaking, the quality credit should belong to the contract credit. Since the complexity and significance of credit in construction field and the particularity of construction contract, the construction contract credit has something special compared with contract credit in other industries. However, the research about construction contract credit is almost in blank, so the paper will do deeply research in this field.The paper will discuss construction contract credit system to support the effectiveness of construction market credit system based on the theory of Credit Economics, Information Economics, Institution Economics and Law. The main body of the paper is as follows:Section I presents the theory of credit and contract credit.The paper puts forward the concept of contract credit after making an explanation for the credit’s characteristic, classification and credit system and studying on the concept of contract and the relationship between contract and credit. Contract credit is the credit that accumulated by enterprises in their exercising lawful rights and fulfilling promises and duties based on their contracts in economy association process, it is a credit form that adapts to the modern society.Additionally, the paper discusses the essence of contract credit in different aspects:Contract credit reflects the legal norm of credit. Contract credit exceeds the morality norm of credit and reflects the legal norm of credit. The lack of contract credit is not only immoral but also illegal. Persons who are without faith should bear the condemnation from moral principle as well as legal sanction. Contract credit reflects the integration of contract rule and credit institution rule. Contract credit is exactly the reflection of the relationship between contract rule and credit institution rule, which reflects that they motivate and help each other. Contract rule and credit institution rule will do a great deal for the development of market economy in China.Contract credit is identical to the principle of good faith of contract law which is the base of the development of Contract credit.Contract credit is one kind of promise credit, which is the compromise of both sides of the contract. The characteristics of the contract determine the characteristics of contract credit as a promise credit.Contract credit and efficiency default are contrary. The primary rule of contract credit is that both sides of contract should comply with the contract, while efficiency default admits default in order to maximize social efficiency when necessary. Obviously, contract credit and efficiency default are contrary. The paper sustains the idea that both sides of the contract should comply with contract credit and abandon the so-called efficiency default.As for the study of Contract credit, the paper takes the advantage of evolving contract theory, game theory, information economics and incomplete contract theory.The paper discusses the evolution and the future development of contract credit on the basis of the comparison between ancient contract credit theory and western contract credit theory. The paper makes a conclusion that human credit must evolve into contract credit with the transmission road of nature economy, plan economy, and market economy.Second II makes a study on construction contract credit institution.Construction contract credit institution is the combinations of laws, regulations and standards in order to change information asymmetry situation in trading of construction market and restrain the main body’s opportunism behaviors in construction market. It pushes down the main body to make an appointment with conduct and reduce construction market transaction costs. It is one kind of formal credit system.Construction contract credit is mainly composed of the owner’s and the contractor’s contract credit. The paper makes a research on content of construction contract credit in three aspects; they are the rights and duties of contract sides, the construction contract dispute and sample contract.Construction contract credit is based on construction contract, so the characteristics of construction contract make the characteristics of construction contract credit. The characteristics of construction contract credit are complexity, significance and long term.The paper studies on the system of construction contract credit law, including the system of credit law, the principle of construction credit law, and the punishment rule and imputing principle of construction credit.The paper mainly expounds on the phenomenon and the damages of lacking construction contract credit, such as the disorder in the construction bidding market, the poor quality of the contractor, the lending qualification certificate of the contractor, the problem of ’black and white contract’, the increasing accidents of safe and quality in construction, the illegal separation of the project by the contractor, the large number of void contracts, the dispute after the completion of the contract, etc. Then the paper explores the causes of lacking construction contract credit in many ways, which are the unclear property order of construction enterprises, the Rent-Seeking behaviors of enterprises, the faulty of contract credit institution, the asymmetric information of both sides of construction contract, the incompletion of construction contract, the lacking of repeat game mechanism, etc.Section III studies on the build of the construction contract credit system.The construction contract credit system is the subsystem of construction market credit system essentially. Its build, run and perfect should be comply with the state credit system, and reflect the construction market credit system in the same time.The paper explores the necessity of building construction contract credit system from several aspects, which are the preparation for the WTO, the increase of the core competition power, the increase of transaction efficiency and the decrease of transaction cost.The construction contract credit system is composed of three major parts; they are construction contract credit institution, construction contract credit supervision system and construction contract credit rating system.The paper analyzes the construction contract credit supervision system based on contract filing system. It then explores several aspects of the construction contract credit supervision system, including the main body, the context and the publication system of the construction contract credit supervision system.The construction contract credit rating system is composed of the management of rating system, the rating quota system, the rating mathematic model and the rating software.The rating quota system is composed of six parts; they are the management of contract, the ability of signing a contract, the status of signing a contract, the ability of fulfilling a contract, the status of fulfilling a contract and the contract credit in society. Then the paper discusses the details of the quota from the owner’s and contractor’s aspects.The paper studies on the innovation of "Obey Contract & Value Credit" and puts forward the functions of the administrative departments of the construction industry in the construction contract credit rating system.Section IV is about the management of construction contract credit.The management of construction contract credit is the management of credit sale based on the written construction contract, and it is a narrow sense of enterprise credit management. It is to establish customer’s contract credit record, rate customer’s contract credit, keep up contract benefit, realize contract purpose and guarantee creditor’s rights and funds.The management of construction contract credit is the important means to build and maintain construction market economic order and it plays an important role in regulating construction market management, perfecting competitive institution of the market, raising project mass, governing project’s payment, decreasing construction costs and shortening project time of a project and so on.That credit management process is the activity that can maximize enterprises’ cash flow in collecting customer data as well as managing account. As for construction contract credit, the paper suggests credit management pattern of "3+1" credit management and the whole process credit management.Finally, the paper puts forward the build tactics of the management of the construction contract credit for the construction enterprises. They should value the owners’ construction contract credit before biding, pay more attention to contract management and due payment during construction, improve payment management after completion.Section V is the study of the risk of the construction contract credit.Contract credit risk is the possibility that one side of the contract can not fulfill the promise but bring about losses to the other side during the trade on the basis of contract credit relationship. Contract credit risk is objective and uncertain just like risk itself.The identification of construction contract credit risk is to find out the major factors that can arouse risk.The paper discusses how to avoid construction contract credit risk in three ways according to its particularity; they are the law system, the transfer system and the management system.The paper analyzes the major reasons that cause construction contract credit risk, they are the one-time characteristic of building activity, the low cost of losing faith and the vacancy of law restrains, the lack of construction contract credit institution, the restraint of unfair market, and the short of management consciousness of contract credit risk.The paper studies on credit benefit, so it explores guarantee insurance and credit insurance. For they can both guarantee creditor’s credit benefits, realize creditor’s rights and ensure business safety. So the paper mainly studies the application of guarantee insurance and credit insurance in construction field.Construction Guarantee and Construction Insurance are the two major methods that can manage construction contract credit in order to defense construction contract credit, avoid the occurrence of loss and regulate construction market.The paper studies on counterplea right, subrogation right and its innovation, cancel right and appeal right to avoid construction contract credit risk in law aspect.To build a construction bond system is to regulate construction behavior with various market economy ways, form effective regulation mechanism, realizes the connection among the construction partners using credit ensure guarantee, and form one kind of joint liability chain to avoid construction contract credit risk.Finally, the paper puts forward some management methods to avoid construction contract credit risk.

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CLC: > Economic > Industrial economy > Industrial economic theory > Industrial sector economy > Construction, water conservancy
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