What are the specific contents of prepayment settlement for construction and installation projects? Zhongda Consulting will answer them below.

1. The amount and disbursement time of the advance payment. The amount and disbursement time of the advance payment shall be subject to the provisions in the special terms of the contract. The advance payment for contracted labor and material projects shall be appropriated as stipulated in the contract. In principle, the advance payment proportion shall not be less than 10% of the contract amount and shall not be higher than 30% of the contract amount. For major engineering projects, advance payment will be made year by year according to the annual engineering plan. If bill of quantities is used for pricing, the proportion of advance payment for the physical consumption and non-physical consumption parts should be agreed upon in the contract respectively. Provided that construction conditions are met, the owner shall advance the project payment within one month after the two parties sign the contract or no later than 7 days before the agreed start date.

2. Appropriation of advance payment and liability for breach of contract If the owner fails to make advance payment as agreed, the contractor shall send a notice requesting advance payment to the owner within 10 days after the expiration of the advance payment time. If the owner still fails to make the advance payment after receiving the notice, For prepayment, the contractor can stop construction 14 days after sending the notice. The owner shall pay the contractor the interest on the payment due from the agreed date (the interest rate is based on the bank loan interest rate for the same period) and bear liability for breach of contract.

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