The Legal System of the Contract of an Administrative Authority- Focus on Act for Promotion of Private Participation in Infrastructure Projects
Author’s Name：Yuan-Ru Lee
Advisor’s Name：Teng-Ko Hsu
National Cheng Kung University Department of Law
A multiple-case review has identified a lack of concrete legal principles or solutions for contract signing practices by administrative agencies under the Act for Promotion of Private Participation in Infrastructure Projects (“the Act”), which is considered responsible for the increase in the number of contract disputes during negotiation and execution of such contracts. This study aims to shed light on traditional contract signing practices in terms of pre-contract procedures and contract execution by administrative agencies before comparing the findings with the legal principles concluded from an analysis on the types of disputes commonly found in contract signing practices in terms of pre-contract procedures and contract execution by administrative agencies under the Act.
Key Words：Act for Promotion of Private Participation in Infrastructure Projects、Administrative Contracts、Investment Contracts、two-stage theory
As evidenced by multiple court cases, Taiwan’s Act for Promotion of Private Participation in Infrastructure Projects (“the Act”) is thought to be deficient in concrete legal principles and offers little guidance on contract signing practices to administrative agencies. This has contributed to an increase in the number of contract disputes occurring during negotiation and execution of such public-private contracts. In light of this, the study sets out to examine contract signing practices by administrative agencies before and after the implementation of the Act by way of establishing a set of legal principles from current court decisions and opinions and investigating the before-after differences in a two-stage viewpoint, ie. prior to and during contract execution. To this end, the study first seeks to produce a set of judgment standards to determine whether a contract signed between an administrative agency and a private entity is considered to be of public or private nature by compiling the interpretations by the Justices of the Constitutional Court of the Judicial Yuan on public and private contracts. Also, various types of contract disputes which occurred after the enforcement of the Act have also been provided in the study. Furthermore, as the the two-phase theory (Zweistufentheori) remains in wide use in pre-contract stage, this study also offers an analysis on the types of two-phase theory applications and accompanying obstacles.
The study discusses contract dispute types after the enforcement of the Act in two stages - prior to and during contract execution - to truthfully reflect domestic administrative agencies’ viewpoint on the legal aspects of a contract. In terms of contract disputes arising prior to contract execution, the study employs court decisions as example, and issues such as causes of action, culpa in contrahendo, return of tender bond, etc. are listed and discussed. In addition, the reasons for and against the combined use of contract punishment and administrative acts are also key areas of discussion in the study. In terms of contract disputes occurring during contract execution, important matters include contract adjustment and/or termination, deposit forfeiture and/or return, along with other legal issues. To aid analysis, a brief overview of these issues with a focus on their respective content, functions, and remedies is provided. Due to unclear regulations on contracts in the Act, the study has chosen to concentrate on contract disputes in courts. By listing, discussing, and categorizing different legal problems as a result of various court decisions, the study proposes appropriate remedy channels and methods for each dispute type. In short, the study compares theory and judicial opinions to identify areas for improvement by administrative agencies in terms of contract handling practices and practical judgment and produces corresponding solutions in order to strengthen Taiwan government’s contract signing practices under the Act as well as reinforce government administration.