Is it possible to pay a construction contract ahead of schedule in Vietnam?

Is it possible to pay a construction contract ahead of schedule in Vietnam?

My company is the construction contractor. We have agreed to pay the construction contract in 4 stages, based on the specific assigned work progress. We are implementing phase 03 but do not have enough funds to continue implementation, so can my company request early payment to have funds to continue implementation?

Answer: Pursuant to Article 19 of Decree 37/2018/ND-CP stipulating construction contract payment as follows:

- If the two parties are not eligible to carry out the payment under the contract during the payment period (no data to adjust price, insufficient time to determine product quality...), temporary payment can be made. When the two parties are eligible to carry out the payment, the employer must make the payment to the contract as prescribed in Clause 3 of this Article.

- The employer must pay 100% of each payment value to the contractor after advances and maintenance expenses are subtracted according to agreement under the contract except otherwise as negotiated.

=> According to the information you provided, you are implementing a construction contract in phase 03, but there is not enough funding, so you can negotiate with the contractor to receive temporary payment, and after completing phase 03 will proceed with payment of phase 03 construction contract according to the above regulations in Vietnam.

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Is it possible to pay a construction contract ahead of schedule in Vietnam? (Image from the Internet)

What is advance on a construction contract in Vietnam?

I am currently an office worker for a construction company. I recently heard colleagues talking about advance payments for construction contracts. I still don't know very well, so I asked for help: What is advance on a construction contract in Vietnam?

Answer: A construction contract is a civil contract agreed in writing between the principal and the contractor to perform part or all of the work in construction investment activities.

In Clause 1, Article 18 of Decree 37/2018/ND-CP guiding construction contracts, it is stipulated that advance on a construction contract is an amount of money offered in advance by the employer to the contractor without interest rate for necessary preparations before implementation of the tasks under the contract.

** Note: advance on a construction contract can only be made after the construction contract takes effect. Particularly for construction contracts, there must be a site clearance plan in accordance with the agreement in the contract. At the same time, the contractor has received an advance payment guarantee (if any) corresponding to the value of each currency agreed upon by the parties.

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What are instructions for advance payment guarantee for construction contracts in Vietnam?

Our company is a construction company, because of work needs, I need to know how the advance guarantee for construction contracts is carried out? Please advise.

Answer: In Clause 4, Article 18 of Decree 37/2018/ND-CP guiding construction contracts, there are regulations on advance payment guarantee as follows:

4. Advance payment guarantee:

a) For a construction contract with an advance payment value higher than one billion Vietnam dong, before the employer carry out the advance payment, the contractor must submit to the employer an advance payment guarantee with value and currency equivalent to the advanced amount of money.  Any construction contract with value from one billion Vietnam dong and lower, and construction contracts in the form of self-performing including the contract executed by a community under the target programs, advance payment is not obligatory.

b) In case the contractor is a partnership contractor, individual members of the partnership must submit to the employer advance payment guarantee with value equivalent to the amount advanced to each member except all the members of the partnership decide on the leading member for submission of payment guarantee to the employer.

c) Validity period of advance payment guarantee must be extended until the employer has recovered all the advanced amount of money. Value of advance payment guarantee shall decrease gradually in proportion to value of advance payment recovered via each payment made between the parties.

Best regards!