07:46 | 23/07/2024

How is the Investor Responsible for the Equipment and Materials Provided to the Contractor in the Construction Contract?

I would like to ask whether the investor is responsible for the equipment and materials they provide to the Contractor in the construction contract? - question from Mr. Quan (Da Lat)

How is the Investor responsible for the equipment and materials they provide to the Contractor in a construction contract?

Based on the provisions of Clause 12.12, Article 12, Part 3, Appendix 3 issued together with Circular 02/2023/TT-BXD, the regulations are as follows:

12.12. Equipment and materials provided by the Investor (if any)

a) The Investor is responsible for the equipment and materials they provide to the Contractor.

b) The Contractor is responsible for each piece of equipment and material of the Investor while the Contractor's personnel operate, drive, control, use, manage, or supervise it.

The appropriate quantity and payment amount (at the stated price) for using the Investor's equipment have been agreed upon in the contract. The Contractor must pay this amount to the Investor.

The Investor must provide, free of charge, “the materials they provide” (if any) according to the details specified in the Investor's requirements. The Investor must bear the risk and use their own expense, to provide these materials at the time and place specified in the contract. The Contractor must inspect these materials and promptly notify the Investor of any shortages, defects, or non-availability of these materials. Unless otherwise agreed upon by the parties, the Investor must immediately address the reported shortages or defects.

After inspection, the materials provided by the Investor must be carefully stored and supervised by the Contractor. The Contractor's responsibility for inspecting and storing does not reduce the Investor's responsibility for shortages, defects, or hidden faults uncovered during the inspection.

As per the above regulations, the Investor is responsible for the equipment and materials they provide to the Contractor.

Moreover, the Investor must provide, free of charge, “the materials they provide” (if any), according to the details specified in the Investor’s requirements. The Investor must bear the risk and use their own expense to supply these materials at the time and place specified in the contract.

How is the Investor responsible for the equipment and materials they provide to the Contractor in a construction contract?

How is the Investor responsible for the equipment and materials they provide to the Contractor in a construction contract?

What are the Investor's rights in a construction contract?

Based on the provisions of Article 11, Part 3, Appendix 3 issued together with Circular 02/2023/TT-BXD, the Investor's rights in a construction contract are stipulated as follows:

- The Investor has the right to inspect and supervise but must not obstruct the Contractor's regular construction activities, and any delays, interruptions, or prolonged additional requests during the Investor's inspections/appraisals will not be counted towards the Contractor's construction schedule;

- If the Investor deems they have a right to any payment based on any clause or other relevant contract provision, they must notify and provide specific details to the Contractor.

- Should the Investor notice an issue or situation leading to a claim, they must notify the Contractor as soon as possible. The detailed information must specifically identify the clause or other basis for the claim and should include evidence for the amount and extension the Investor considers themselves entitled to under the contract. The Investor will then decide:

+ The amount (if any) that the Investor is entitled to request the Contractor to pay;

+ Extend (if any) the defect notification period;

The Investor may deduct this amount from any debt or will-be debt of the Contractor. The Investor may only deduct or reduce the amount from the total confirmed debt of the Contractor or under any other claim against the Contractor under this clause;

+ Other rights according to legal provisions.

Can the Investor dismiss incompetent Contractor personnel in a construction contract?

Based on the provisions of Clause 12.4, Article 12, Part 3, Appendix 3 issued together with Circular 02/2023/TT-BXD, the regulations are as follows:

Contractor’s Personnel

The Contractor's personnel must have appropriate qualifications, skills, and experience relevant to their professions and tasks. The Investor may request the Contractor to dismiss (or influence to dismiss) any personnel on the site or project, including the Contractor's representative, if such persons: exhibit improper behavior or carelessness; are incompetent or negligent; do not comply with any term of the contract; jeopardize safety, health, or environmental protection.

In that case, the Contractor will appoint (or be compelled to appoint) another suitable person as a replacement. The Contractor must always ensure order and safety for people and property on the site.

According to the above regulations, the Investor can request the Contractor to dismiss (or influence to dismiss) any personnel on the site or project, including the Contractor's representative if such persons lack competence.

In that case, the Contractor will appoint (or be compelled to appoint) another suitable person as a replacement.

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