Main matters to know about construction cooperation contracts

A construction cooperation contract is an important component of construction projects, ensuring effective collaboration among participating parties. A clear understanding of the terms, obligations, and rights under such a contract not only helps the parties avoid legal disputes but also facilitates the smooth and timely completion of works. In the following article, NPLaw provides a detailed overview of construction cooperation contracts, from basic concepts and relevant legal regulations to essential contractual contents and legal solutions to protect the parties’ rights when issues arise during the cooperation process.

Below, NPLAW respectfully invites our readers to explore matters related to construction cooperation contracts.

I. Overview of construction cooperation contracts

A construction cooperation contract is an agreement between parties whereby all parties contribute assets, labor, and experience to perform construction, installation, renovation, or maintenance works.

Such a contract is not merely a commitment to work results but also a joint legal responsibility requiring transparency, fairness, and a long-term cooperative commitment. When entering into a construction cooperation contract, the parties must clearly define the terms, rights, obligations, and responsibilities of each party to ensure common interests and the quality of the works.

II. Legal regulations on construction cooperation contracts

1. What is a construction cooperation contract?

Currently, Vietnamese law does not provide a specific statutory definition of a construction cooperation contract. However, based on relevant legal provisions, particularly Article 504 of the Civil Code 2015 and Clause 38, Article 3 of the Law on Construction 2014, a construction cooperation contract may be understood as a written agreement between individuals or legal entities under which the parties jointly contribute assets and labor to perform works related to:

• Construction and installation of equipment in new works; repair, renovation, relocation, upgrading, or restoration of works;
• Demolition of works;
• Maintenance and servicing of construction works.

The purpose of such cooperation is for the parties to jointly benefit and jointly take responsibility throughout the implementation of the works.

2. The latest template of construction cooperation contracts

At present, the law does not prescribe a standard template for construction cooperation contracts. However, parties may refer to contract templates stated in accordance with the Civil Code 2015, the Law on Construction 2014 (as amended and supplemented in 2020), and relevant decrees. The contract contents must be clear, transparent, and comprehensive to avoid future disputes. 

3. Essential contents of the construction cooperation contract

Pursuant to Article 505 of the 2015 Civil Code, the construction cooperation contract should include the following principal contents:

• Information of the cooperating parties;
• Objectives, scope, and contents of cooperation;
• Allocation of responsibilities, rights, and obligations of the parties;
• Financial arrangements (capital contribution, payment, profit sharing);
• Contract term and implementation schedule;
• Provisions on dispute resolution and contract termination.

III. Questions regarding construction cooperation contracts

1. In which cases may a member withdraw from the construction cooperation contract?

Pursuant to Article 510 of the 2015 Civil Code, a member has the right to withdraw from a cooperation contract if:

• There is a legitimate reason;
• Such withdrawal is approved by the remaining members; or
• The cooperation term has ended and the withdrawal does not cause damage to the common interests.

2. What are the rights and obligations of construction contractors under construction cooperation contracts?

The rights and obligations of construction contractors are stipulated in Article 113 of the Law on Construction 2014, as amended by Clause 42, Article 1 of the Amended Law on Construction 2020, including:

• Rights: To receive remuneration; to request coordination from other parties in performing the work; to propose amendments to unreasonable contractual terms.
• Obligations: To complete the work in accordance with the agreed schedule, quality, and costs; and to comply with legal regulations related to construction activities.

3. Cases in which the construction cooperation contract is invalid

The construction cooperation contract shall be deemed invalid if it violates the provisions of Articles 407 and 408 of the Civil Code 2015, such as:

• The contract contents violate prohibitions of law or are contrary to social ethics;
• The contracting parties lack civil act capacity or authority to enter into the contract;
• Failure to comply with statutory requirements on contract form (where the contract is required to be in writing or notarized).

IV. Legal consultancy services related to construction cooperation contracts

In the current complex legal environment, using legal consultancy services is an optimal solution to safeguard the parties’ rights when entering into construction cooperation contracts. Lawyers provide assistance in drafting contracts, reviewing legal validity, resolving arising issues, and protecting clients’ rights in the event of disputes.

Ngoc Phu Law Company Limited with its team of experienced lawyers, is willing to support clients in all matters related to construction cooperation contracts. We are committed to providing effective legal solutions and maximizing the protection of clients’ rights and interests throughout the transaction process.