Unpaid Construction Subcontract: 130000 RMB Payment Dispute Liability Ruling
A recent appellate ruling addressed a dispute over unpaid work under a construction subcontract for waterproofing services, clarifying liability when contracts are technically void. The case involved an individual without formal construction qualifications, referred to as Party A, who entered into a subcontracting agreement with a specialized waterproofing company, Company A, to perform work on a residential development project. The general contractor for the overall project was identified as Company B. The central dispute arose when Company A claimed it had not received full payment for completed work, leading to litigation that required appellate review.
The court examined whether an unlicensed individual could be held personally liable for contractual obligations, whether the general contractor bore joint liability for subcontractor payments, and how to assess payment claims when the underlying contract is void under applicable law. The facts showed that in February of a recent year, Party A and Company A executed a written agreement for waterproofing work on two buildings within a residential development. The contract specified unit pricing for various services, including roofing at a fixed rate per square meter, kitchen and bathroom waterproofing at a different rate, and additional line items. Payment terms required 70 percent upon completion, 2 percent retained as a warranty deposit for one year, and 28 percent within one month after project acceptance.
In June of that year, Party A signed a site measurement sheet confirming work quantities, including kitchen and bathroom waterproofing covering approximately 1,872 square meters, indoor damp-proofing covering 649 square meters, roof waterproofing covering 127 square meters, roofing membrane covering 999 square meters, sealant joints covering 1,199 square meters, elevator pit waterproofing covering 73 square meters, and other items. The total calculated amount was approximately 73,463 RMB. An earlier contract from October of the prior year covered an additional building with similar terms. In November of that year, Party A signed a measurement sheet confirming roofing membrane work covering 2,618 square meters, elastic cement waterproofing covering 1,507 square meters, and other items, totaling approximately 112,000 RMB.
The entire residential project was completed and formally accepted in May of a subsequent year. Despite completion, Party A had made only partial payment of 50,000 RMB, leaving a substantial outstanding balance. Company A also claimed an additional 8,340 RMB for work on a separate project but could not provide supporting documentary evidence. The court ruled that Party A, as an unlicensed individual, was personally liable for the unpaid balance because the contract, while void due to lack of qualifications, did not relieve the party from paying for work actually performed and accepted. The court also found that Company B, as the general contractor, did not bear joint liability because the subcontract was directly between Party A and Company A, and there was no evidence of direct involvement by Company B in the payment dispute.
The court ordered Party A to pay the outstanding amount of approximately 135,463 RMB, calculated from the two measurement sheets, minus the 50,000 RMB already paid. The additional claim for 8,340 RMB was dismissed due to lack of evidence. The ruling reinforces that even when a construction contract is void due to a party’s lack of qualifications, payment is still required for completed and accepted work, and general contractors are not automatically liable for subcontractor debts unless they directly participated in the agreement.