Dear Atty. Peachy,

About five months ago, I hired a contractor to remodel my bathroom. We agreed on the scope of the project, total cost, and expected completion date through email exchanges and a signed estimate. I paid an upfront deposit so the contractor could order materials and begin work. The renovation was supposed to be completed within eight weeks. However, nearly seven months have now passed, and the project is still unfinished. Certain aspects of the work appear defective, and the contractor regularly fails to show up on scheduled workdays. Each time I raise concerns, he assures me that the job will be completed “in a few more days,” but the delays persist. I am considering hiring a different contractor to finish the renovation. The original contractor claims that because work has already begun and materials have been purchased, he is entitled to retain all amounts I have paid, even if I end the arrangement. Do I have the legal right to terminate the contractor and recover some of the money I have already paid?

Grace

Dear Grace,

Under Philippine law, you may have the right to end the contractor’s services and recover some of the money you paid, but this will depend on your contract and the evidence showing the contractor’s delays and poor performance.

Contracts are legally binding, and both parties must fulfill their obligations in good faith. In a renovation project, the contractor is expected to complete the work as agreed, while the homeowner is expected to make the required payments.

Several facts may support your position: (1) project was supposed to be completed in about eight weeks, (2) almost seven months have passed, and the work is still unfinished, (3) some of the completed work appears defective or below expected standards and (4) contractor repeatedly promised to finish the project but failed to do so.

Under Article 1191 of the Civil Code, if one party significantly fails to meet their obligations, the other party may seek to terminate the contract and, in some cases, claim damages. However, the breach must be substantial, not minor.

That said, delays alone do not automatically entitle you to a full refund. Important factors include: (1) how much of the work has actually been completed, (2) whether the completed work meets the agreed standards, (3) what materials were purchased and used for the project, (4) whether the delays were caused by the contractor or by factors beyond their control, (5) whether the contract contains clauses on termination, refunds, deposits, or damages.

Before taking action, gather and preserve evidence such as photos, videos, inspection reports, receipts, invoices, the contract or quotation, and all communications with the contractor regarding delays and workmanship issues.

You may also send a formal written demand requiring the contractor to finish the project within a reasonable period or explain the ongoing delays. If the contractor still fails to comply, the demand may help support your case.

If the contractor is found to have substantially breached the contract, you may be able to recover payments for unfinished work, the cost of fixing defective work and possibly other damages. However, the contractor may still be entitled to payment for work properly completed and materials actually used.

In short, a contractor cannot automatically keep all payments simply because work has started. If the delays and defects amount to a serious breach of the contract, you may have grounds to terminate the agreement and seek repayment for work that was not properly completed, depending on the contract terms and available evidence.

Atty. Peachy Selda-Gregorio