A main contractor agreement is one of the forms of construction contracts classified based on the legal relationship among the contracting parties. A main contractor agreement is a civil contract executed in writing between the parties for the performance of construction consultancy services within construction investment activities, entered into between the project owner and the main contractor or general contractor. In the following article, NPLaw presents to readers several legal regulations on main contractor agreements for construction in accordance with current law.

I. Current situation related to main contractor agreements

At present, due to the increasing demand for construction investment and project implementation nationwide, in order to ensure accuracy progress and maximize investors’ benefits, the parties often enter into construction consultancy contracts to select the most appropriate solutions for each project. Specifically, one party will hand over a construction project to another party with the relevant expertise to undertake the construction works.

The receiving party may execute one, several, or all construction tasks of the project. The written agreement and commitments established between the parties are referred to as a main contractor agreement. Given its critical importance, it is essential to understand and flexibly apply legal regulations on main contractor agreements.

II. Regulations related to main contractor agreements

1. What is a main contractor agreement?

Clause 1, Article 138 of the Law on Construction 2014 provides that: A construction contract is a civil contract agreed upon in writing between the employer and the contractor to execute part or all of the work within construction investment activities.

Pursuant to Point a, Clause 3, Article 3 of Decree No. 37/2015/ND-CP, a main contractor agreement is a construction consultancy contract (also referred to as a consultancy contract) entered into between the project owner and the main contractor or general contractor. Such a contract is used to execute one, several, or all consultancy tasks within construction investment activities.

Accordingly, based on the above provisions, a main contractor agreement is a form of construction contract, agreed upon in writing between the owner and the contractor for the performance of construction consultancy services in construction investment activities.

2. Parties to the main contractor agreement

The parties to the main contractor agreement include the employer/contracting authority and the contractor. 

  • The employer/contracting authority may be the project owner or its authorized representative, the general contractor, or the main contractor. It may be an enterprise, a State authority, a social organization, or a people’s armed forces unit that has investment capital and construction needs. 
  • The contractor is a construction enterprise duly registered to conduct construction business and must satisfy requirements regarding professional capacity, technical expertise, experience, and financial capability. The contractor may be a general contractor, a main contractor, or a subcontractor. In addition, contractors may form a consortium to undertake the contract.

3. Essential contents of the main contractor agreement

The fundamental contents required in the main contractor agreement are prescribed in Clause 1, Article 141 of the Law on Construction 2014. These essential contents include the legal basis, scope of work, implementation progress, technical and quality requirements, rights and obligations of the parties, and other relevant terms as agreed by the parties.

III. Questions regarding main contractor agreements

1. Which content of the main contractor agreement is the most important? Why?

In general, among various types of contracts, the mandatory content is information on the contracting parties, also referred to as the subjects of the contract. The subjects of the contract not only affect the formation and validity of the contract but also impact the legal capacity of the signatories, thereby influencing the possibility of the contract being declared invalid.

A contract is only formed when there are at least two parties entering into an agreement. For a main contractor agreement, the subjects are the employer/contracting authority and the contractor. Determining the contractual parties also helps identify the subject matter of the contract, thereby clarifying the fundamental rights and obligations of the parties (for example, in the case of damage, the contractor shall be liable for compensation).

Therefore, provisions concerning the contractual parties are mandatory and constitute the most important content of the main contractor agreement.

2. How many subcontract agreements can the main contractor agreement have?

The number of subcontract agreements under the main contractor agreement is prescribed in Clause 1, Article 47 of Decree No. 37/2015/ND-CP.

Accordingly, the main contractor agreement may include multiple subcontract agreements. The number of subcontract agreements depends entirely on the agreement and decision of the relevant parties and is not subject to any specific limitation or restriction.

3. Is it mandatory for the main contractor agreement to specify the contract price?

Pursuant to Clauses 1 and 2, Article 14 of Decree No. 37/2015/ND-CP, as amended and supplemented by Decree No. 50/2021/ND-CP, regarding construction contract prices, the parties must clearly specify the costs and applicable taxes and fees (if any) that are included or excluded from the contract price in the construction contract. 

Accordingly, the main contractor agreement must clearly state all cost items, taxes, and fees, whether already included or not included in the contract price.

IV. Legal consultancy services related to main contractor agreements

The above is NPLaw’s analysis of several regulations concerning main contractor agreements. With a team of experienced lawyers and legal consultants, NPLaw provides reputable and professional legal services, ensuring the lawful rights and interests of clients.

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