In what cases is a construction contract adjusted?

Construction contract is a legal document that stipulates the rights and obligations between parties in construction activities. Adjusting construction contracts will help open up optimal opportunities for businesses during project implementation, ensuring progress and investment efficiency. The following article by Long Phan will analyze in detail cases of adjusting construction contracts, helping you seize opportunities and achieve your business goals.

Principles to keep in mind when signing construction contracts

When signing a construction contract, the parties involved need to master the basic principles in the contracting process. This creates the foundation for a sustainable cooperative relationship throughout the project implementation process. Pursuant to Clause 2, Article 138 of the Law on Construction 2014 (amended 2020), principles for signing construction contracts include:

• Voluntary, equality, cooperation, compliance with law and social ethics;
• Ensure there is enough capital to make payments as agreed in the contract;
• Completed contractor selection and concluded contract negotiations;
• If the contractor is a joint venture, there must be an agreement between the members of the joint venture, and all members must sign and stamp (if any) the construction contract, unless the parties agree otherwise.

Cases where construction contracts are adjusted

Adjusting construction contracts is a complex process, requiring consensus from relevant parties. This adjustment must comply with legal regulations and protect the interests of all participating parties, in order to limit the possibility of disputes during implementation.

According to Clauses 2 and 3, Article 143 of the Law on Construction 2014 (amended 2020), construction contracts can be adjusted in the following cases:

• According to the agreement between the parties, as long as it is consistent with the provisions of the Law on Construction and related laws;
• When the State changes policies that directly affect the performance of the contract, unless otherwise agreed between the parties;
• When there are adjustments in the project that affect the contract, unless the parties have agreed otherwise;
• In force majeure situations as prescribed by law.

Note that, for construction contracts belonging to projects using public investment capital, price adjustments also need to comply with the following regulations:

• Unit price adjustments only apply to contracts based on adjusted unit prices and time-based contracts;
• The unit price in the contract will be adjusted according to the content, scope, method, and basis agreed upon by the parties, in accordance with the law;
• If contract adjustments lead to changes in investment objectives, contract implementation time, or exceed the approved construction package estimate, approval from the investment decision maker is required.

Some notes when entering into and adjusting construction contracts

Entering into and adjusting construction contracts requires caution and strict adherence to procedures. This process should be carried out under the supervision of a legal expert. This helps ensure the legality and validity of the governing provisions. And now, Long Phan would like to provide some notes to you when entering into and adjusting construction contracts as follows:

Formal and procedural requirements

• Prepare negotiation minutes and agree on adjustment content between parties;
• Clearly define the scope, content, and reasons for contract adjustments;
• Make sure the person signing the adjustment appendix has the authority according to regulations;
• Comply with regulations on notarization and authentication (if required);
• Maintain complete records and documents related to the adjustment process.

The content of the adjustment needs to be clarified

• Determine exact work and volume of change;
• Clarify the unit price applied to the adjustment;
• Unify the method of calculating the adjustment value;
• Determine the execution time for the adjustment;
• Specify the parties’ responsibilities in making adjustments.

Requirements for legal documents

Contract adjustment documents need to include:

• Written request for adjustment from the proposing party;
• The report explains the need for adjustments;
• Detailed adjustment value calculation table;
• Minutes of negotiation and agreement on adjustments;
• The adjusted contract appendix is ​​signed by the parties.

Risks that need to be avoided

1. Legal risks:

• Adjustment beyond the scope permitted by law
• Lack of legal basis for adjustment
• Failure to comply with the correct contract adjustment procedures.

2. Content risks:

• Adjustments are unclear and controversial
• Adjustment value calculation is incorrect
• Implementation time does not match reality.

3. Authority risks:

• The signer is not competent
• Lack of approval from competent authorities
• There is no consensus among relevant parties.

Complying with the above notes will help the process of adjusting your construction contract go smoothly, ensuring the rights of all parties and avoiding legal risks that may arise.

Professional consulting services on concluding construction contracts in Long Phan

With extensive experience in the field of construction law. Long Phan’s team of experts will accompany customers in every stage of the project and provide optimal solutions, helping you save time and costs.

Long Phan provides in-depth consulting services including:

• Consulting on drafting and reviewing construction contracts.
• Consulting on contract adjustments and contract appendices.
• Consulting on dispute resolution in construction contracts.
• Legal advice on compliance in the construction sector.
• Representing and negotiating construction contracts.
• Consulting on procedures for liquidating construction contracts.

Adjusting construction contracts is a necessary process to ensure flexibility and efficiency in project management. At Long Phan, we will support customers in procedures for adjusting construction contracts. Helps bring optimal solutions to all construction contract issues, from drafting to adjustments and dispute resolution. Please contact Long Phan immediately via the hotline: 0906735386 for timely advice and support for all your construction contract issues.