Finding yourself in a situation where a contractor abandons a project or fails to complete construction work despite full payment is a challenging breach of contract. Under Philippine law, homeowners and property owners possess clear legal remedies to seek execution, refund, or damages.
1. Execute the Work at the Contractor’s Expense
When a contractor fails to perform or completes the project defectively, the property owner has the statutory right to hire another contractor to complete or repair the work and charge the total cost to the original contractor.
Article 1167 of the Civil Code of the Philippines:
“If a person obliged to do something fails to do it, the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone.”
2. Rescind the Construction Contract or Demand Specific Performance
A construction contract creates reciprocal obligations. Under Philippine jurisprudence, a substantial failure by the contractor to finish the work grants the paying client the right to cancel (rescind) the contract with a refund or force the contractor to finish the work, alongside claiming damages in either scenario.
Article 1191 of the Civil Code of the Philippines:
“The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.”
3. Claim Indemnity for Damages, Negligence, or Delay
If the contractor engaged in bad faith, fraud, unreasonable delay, or deviated from agreed specifications, they are liable for civil damages under the law.
Article 1170 of the Civil Code of the Philippines:
“Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.”
Key Steps to Take
- Document and Audit: Capture clear photos and video recordings of the unfinished site. Hire an independent licensed engineer or architect to perform a quantitative audit showing the percentage of accomplishment versus the actual amounts paid.
- Issue a Formal Demand Letter: Send a formal letter of demand via registered mail, placing the contractor in legal delay and setting a strict period to either finish the work or refund the unexpended balance.
- File a Legal Action:
- CIAC (Construction Industry Arbitration Commission): If your construction contract contains an arbitration clause, jurisdiction belongs exclusively to the CIAC pursuant to Executive Order No. 1008.
- Regular Courts: If there is no arbitration clause, you may file a civil complaint for Rescission/Specific Performance with Damages before the appropriate Regional Trial Court (RTC) or Metropolitan Trial Court (MeTC), depending on the total money claim.
- Criminal Action: If the contractor obtained advance payments through deceitful promises without any intention to perform, a criminal complaint for Estafa under Article 315 of the Revised Penal Code may also apply.
DISCLAIMER: This article is for educational and informational purposes and should not be considered formal legal advice. If you need assistance with unfinished work by a contractor after full payment in Cebu City, Mandaue, and Lapu-Lapu or anywhere in Cebu Province, consult with a legal professional.
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