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Benchmarking Chinese Construction Contracts

Against Global Standards

 

STUDENT PAPER

By Xingshi Guo

SKEMA Business School

Lille, France

 



ABSTRACT

During the development of property project, many contracts involved to be signed which greatly affects the success of the project. As the conflict and dispute caused by complicated conditions in those contract, contracts play an essential role in a project. Hence, this paper takes one kind of those contract, contract of construction from a Chinese client as the sample and basement from the Southernstar Consultant LLC (SsC) and Consensus Docs, to check and compare it with global standard and checklist of contract of construction as benchmark from The American Institute of Architects (AIA), Sarah Fox’s 500 Words and National Community Development Association (NCDA). It is to represent an international standard as the lesson learned for developing countries. From the comparison analysis, it found the client should take Consensus Docs as a standard of the contract of construction and some conditions are advised to improve.

Key words: Chinese construction contract, global construction contract standard, benchmark analysis, employer and contractor, contract management

INTRODUCTION

Since it is common to witness the phenomenon of dispute and profit-lose of the construction project in China, the issue of the contract of construction in contract management, instead of the sole negotiation process, should be paid high attention to. It not only could reduce amount of cost at contractor side and guarantee the quality at employer side, but also could eliminate project time-wasting and maintain sustainable cooperation. At the same time, based on good foundation of the construction contract at original level, the tendency of the company is growing up to develop itself nationally even internationally, while the priority is to update the contract items and standards to follow up the senior level work.

At a lower-level, the conditions of the contract of construction illustrate and limit both the deliverables and deviations on how to do the project. At a higher-level, it involves the responsible parties and relevant rights to implement in all aspects of the project. For this reason, it involves many aspects of conditions in the contract of construction, which is the complicate and crucial part to cover exhaustive aspects of it. Therefore, at the perspective of both contractor and employer, the paper would analyze and benchmark one type of actual construction contract in a company in China from the author’s client who is the contractor, taking the baseline of checklist from SsC and Consensus Docs, to compare it with global guide and checklist of contract of construction as benchmark from AIA, Sarah Fox, and NCDA. It is to figure out the necessary general conditions to be added and needed in the Chinese construction contract.

In a nutshell, this paper is intended to research and find answers to the following questions:

  • What are the required and crucial general conditions missed in this Chinese contract of construction to avoid conflict and/or dispute?
  • What is the global standard of general terms and conditions for Chinese contract of construction based on these checklists?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Guo, X. (2018). Benchmarking Chinese Construction Contracts Against Global Standards, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Guo-benchmarking-chinese-construction-contracts-against-global-standards.pdf



About the Author


Xingshi Guo

Lille, France

 

 


Xingshi Guo
is an MSc student majoring in Project and Programme Management & Business Development (PPMBD) in SKEMA Business School. She is studying and practicing contract management, leadership management and scheduling in project. She has her two postgraduate years respectively in Nice and Lille, France campus. She is the member of PMI and the PMI France Chapter with the certifications of PRINCE2 foundation and AgilePM foundation. She graduated from Hubei Normal University and majored in English for Bachelor’s degree in China; she published two papers about interpreting and translation in magazines guided by her professor, XIANG Qunxing in Jan, 2015. She had an internship working as the assistant of project manager in industry cooperation department in Shanghai Jiaotong University in China in 2017.

Xingshi can be contacted at [email protected].