Responsibilities of the Parties in the Contract in Case of Risk Occurrence

15:40, 10/07/2024

The Ministry of Construction issued Circular 08/2016/TT-BXD on March 10, 2016, to specifically regulate the responsibilities of parties in a contract when risks occur.

Circular 08 stipulates the responsibilities of the parties with regard to risks as follows:

- For risks accounted for in the contract price, when such risks occur, the contractor shall be responsible for covering the costs with its own funds.- For risks that have been insured, the cost of remedying the consequences of these risks shall be covered by the insurance unit and shall not be included in the contract price.- The contractor must compensate and bear the damages for the employer concerning any damages, losses, and related costs (including fees and legal expenses) caused by their own fault.- The employer must compensate the contractor for any damages, losses, and related costs (including fees and legal expenses) caused by their own fault.

In addition, Circular 08 stipulates that in cases of force majeure:

- When one party encounters a force majeure situation, they must notify the other party in writing as soon as possible, detailing the obligations and work related to the consequences of the force majeure.- The notifying party is excused from performing work under their responsibility during the time the force majeure affects the contractual obligations.

See details in Circular 08/2016/TT-BXD effective from May 01, 2016.

-Thao Uyen-

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