VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
7.2 Assigning Responsibility for the Design and Construction of a Project Construction usually involves:
Furthermore, since an owner may own a prop - erty on land leased from a landlord, there is a possibility that the landlord may terminate the land lease agreement while the property owner is leasing its property to a third party. In this case, the land lease termination also affects the prop - erty lease. If the land lease termination is lawful then any damages caused to the property lease will be borne by the land tenant. If the land lease termination is not lawful, however, the landlord may be responsible to the land tenant in bearing the compensation owed to the property lessee, as well as the cost of any other damages that arise as a result of the unlawful termination. 6.23 Remedies/Damages for Breach In the event of a tenant breach and termina - tion of a lease, the landlord can claim for actual damages incurred directly from such breach, a penalty (at 8% of the obligation breached), and late-payment interest for the breach of payment obligation (at less than 20% per annum). Alterna - tively, landlords usually hold a security deposit in cash, equivalent to one-to-three months’ rent, or may place a lien on and dispose of the property on the premises. It is recommended that land - lords seek specific advice for the best approach on the application of the above remedial meas - ures prior to executing the lease contract. 7. Construction 7.1 Common Structures Used to Price Construction Projects Construction project pricing may include: • a lump-sum price; • a fixed price; • a fixed price with adjustments; • a time-based price; and • a price with combined methods.
• the project’s developer; • the building contractor;
• the supply contractor of building products and materials or assembling equipment etc; and • the advisory contractor in survey, design, project management, monitoring, piloting, assessing, etc. The (main) contractors and/or construction man - agement board (if established by the developer for project management) are directly responsible and liable for the scope of works undertaken in terms of quality and safety before the laws and the developers. Any secondary contractor will be liable before its main contracts. Assigning contractors’ responsibilities wholly or partially must be agreed and/or approved by the own - er in formal and written documents, otherwise such assignment is invalid and ineffective. The assignment of responsibility must not be contra - ry to, and must always comply with, the laws on construction management in quality, progress, quantity, occupational safety and environmental control. 7.3 Management of Construction Risk Risks in construction are usually passed to (main) contractors under contract between the parties through penalty and indemnification. Nevertheless, mandatory insurance against risks in construction investment activities must be procured, including construction and public liability policies.
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