Guidance on some contents of construction contracts in Vietnam? What are the contents of model construction contracts in Vietnam?
- Which regulated entities are eligible for the Circular guiding a number of construction contracts in Vietnam?
- What are the specific contents of model construction contracts in Circular No. 02/2023/TT-BXD?
- Construction contracts before the effective date of Circular No. 02/2023/TT-BXD shall be implemented according to which regulations?
Which regulated entities are eligible for the Circular guiding a number of construction contracts in Vietnam?
On March 3, 2023, the Ministry of Construction of Vietnam issued Circular No. 02/2023/TT-BXD guiding a number of contents on construction contracts.
Pursuant to Article 1 of Circular No. 02/2023/TT-BXD stipulating the scope of application of Circular No. 02/2023/TT-BXD as follows:
Scope
This Circular provides detailed guidance on certain contents of the construction contract; provides model performance contracts, consulting contracts, engineering, procurement, and construction (EPC) contracts.
Pursuant to Article 2 of Circular No. 02/2023/TT-BXD stipulating the regulated entities of Circular No. 02/2023/TT-BXD as follows:
Regulated entities
1. This Circular applies to entities involved in setting and management of the execution of construction contracts applicable to investment and construction projects funded by public investments and non-public investment state funds, and construction contracts between project enterprises and contractors for performing tasks of contract packages of the public-private partnership (PPP) projects.
Organizations and individuals may apply regulations in this Circular to preparation and management of construction contracts for other financed projects.
2. In case construction contracts of projects financed by official development assistance (ODA) capitals and concessional loans arising from International Treaties to which Vietnam is a signatory are constituted by provisions different from the provisions specified in this Circular, such international treaties shall be applied.
Thus, Circular No. 02/2023/TT-BXD has guided construction contracts as follows:
- Construction consulting contract
- Construction contract
- Engineering, procurement, and construction (EPC) contracts
Guidance on some contents of construction contracts in Vietnam? What are the contents of model construction contracts in Vietnam?
What are the specific contents of model construction contracts in Circular No. 02/2023/TT-BXD?
Pursuant to the provisions of Article 7 of Circular No. 02/2023/TT-BXD stipulating as follows:
Instructions for using and applying model construction contracts
1. The model construction contracts enclosed herewith shall be applied to organizations and individuals to refer and apply in establishing and managing contract performance for construction contract packages, ensuring that contents of construction contracts meet the regulations in Clause 1 Article 141 of the Law on Construction No. 50/2014/QH13.
2. The model construction contracts enclosed with this Circular shall be applied to investors and contractors. If contracting parties are the general contractors or prime contractors, parties shall study and apply necessary contents of these model contracts to establish and manage the contract performance.
3. The model construction contracts enclosed herewith includes:
a) Model consulting contract specified in Appendix II enclosed herewith which is applied to consulting contracts for preparation of feasibility study reports, construction surveys, construction designs and construction supervision.
b) Model performance contract specified in Appendix III enclosed herewith.
c) Model EPC contract specified in Appendix IV enclosed herewith which is applied to lump-sum contracts. If prices of a contract are based on fixed unit prices, adjusted unit prices or combination of types of prices of the contract, parties shall, on the basis of regulations of law and this Circular, amend terms of their EPC contract templates for establishing the contract.
4. For simple and small-scale contracts, types of consulting contracts and other combined contracts, parties shall refer and apply the model construction contracts enclosed with this Circular for adjusting and amending terms of their contract templates for establishing contracts.
5. When using the model construction contracts enclosed herewith for dealing and signing construction contracts, specific requirements and conditions of packages, projects and the regulations of Decree No. 37/2015/ND-CP which are amended by Decree No. 50/2021/ND-CP, other regulations of law and the instructions in this Circular shall be based on. For contents of a contract, the following contents must be agreed specifically:
a) Specific regulations on time limit for payment, time limit for contract execution, deadline for response, expiry date of the contract and similar cases must be agreed upon.
b) If the contractor is a consortium, the performance guarantee - advance payment guarantee must be agreed upon as prescribed by law.
c) Specific regulations on types of currencies and forms of payment in the contract must not be contrary to requirements prescribed in bidding documents and regulations of law on foreign exchange.
d) If the price of the construction contract is based on adjusted unit prices, methods for price adjustments, price data sources and pricing basis must be agreed upon but not be contrary to bidding documents and law on construction contracts.
dd) The contents of the contract shall be adjusted and supplemented accordingly on the basis of the nature and conditions of the package.
Thus, for contents of a contract, the following contents must be agreed specifically:
- Specific regulations on time limit for payment, time limit for contract execution, deadline for response, expiry date of the contract and similar cases must be agreed upon.
- If the contractor is a consortium, the performance guarantee - advance payment guarantee must be agreed upon as prescribed by law.
- Specific regulations on types of currencies and forms of payment in the contract must not be contrary to requirements prescribed in bidding documents and regulations of law on foreign exchange.
- If the price of the construction contract is based on adjusted unit prices, methods for price adjustments, price data sources and pricing basis must be agreed upon but not be contrary to bidding documents and law on construction contracts.
- The contents of the contract shall be adjusted and supplemented accordingly on the basis of the nature and conditions of the package.
Construction contracts before the effective date of Circular No. 02/2023/TT-BXD shall be implemented according to which regulations?
Pursuant to Clause 1, Article 8 of Circular No. 02/2023/TT-BXD stipulating as follows:
Transition provisions
1. Construction contracts which have been signed and executed before the date on which this Circular comes into force shall comply with regulations on construction contracts which are applicable before the date on which this Circular takes effect.
Thus, construction contracts before the effective date of Circular No. 02/2023/TT-BXD shall comply with regulations on construction contracts before the effective date of Circular No. 02/2023/TT-BXD.
Circular No. 02/2023/TT-BXD takes effect from April 20, 2023.
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