The problem of delayed payments to builders is ancient and is one of the most frequent litigation actions. Article 286 of the Contract Law and the “Official Reply on Issues Concerning the Construction Lien” issued by the Supreme People’s Court on 20 June, 2002, entitle building contractors to a construction lien, which is an effective tool for the builder’s collection of an unpaid project price. However, due to the complexity and diversity of factual issues in each case, and because the aforementioned provisions are not very detailed, there are differing judicial opinions about how the construction lien works.
Using as an example a case we have handled, we will explore whether the sub-contractor or head contractor is entitled to the construction lien.
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