Dear Atty. Gab,

Musta Atty! I hope you can shed some light on a problem I’m having with a home renovation project. My name is Fernando Lopez, and I live in Quezon City. Last March, I hired ‘BuildRight Builders’ to renovate my kitchen. We signed a detailed contract with specific plans, including the installation of German-brand fixtures (faucets, sinks) and premium Italian tiles that I specifically chose. The total contract price was P500,000, and I paid an 80% downpayment of P400,000 as agreed upon signing.

The project was supposed to be finished in 60 working days, but it’s now way past the deadline. Worse, when I checked the progress last week, I was shocked to find they installed cheap, unbranded fixtures and completely different, locally-made tiles! When I confronted the project manager, Mr. Reyes, he just brushed it off, saying these materials were of ‘equivalent quality’ and readily available, unlike the imported ones which he claimed were delayed. He didn’t ask for my permission for these substitutions.

The kitchen isn’t even fully functional yet, and I haven’t formally accepted the work because it’s clearly not what we agreed on. I refused to let them continue with the wrong materials. We even went through barangay conciliation, and while we attended most sessions, their main representative missed one important meeting without a valid excuse. Now, I just want to cancel the whole thing and get my P400,000 back. Can I do that? Is this considered rescission or just breach of contract? Does their missing one mediation session hurt my chances if I file a case? I feel cheated and unsure of my next steps. Any guidance would be greatly appreciated.

Sincerely,
Fernando Lopez

Dear Fernando,

Thank you for reaching out, and I understand how frustrating and stressful this situation with your kitchen renovation must be. Dealing with contractors who don’t adhere to agreed-upon plans can be incredibly disheartening, especially when significant payments have already been made.

Based on your description, it appears the contractor has indeed failed to comply with specific and material terms of your agreement. This failure to follow the agreed plans and specifications, particularly regarding the brand and type of fixtures and tiles, generally constitutes a breach of contract. Philippine law provides remedies for such situations, including the possibility of cancelling or rescinding the contract and demanding the return of payments made, potentially along with damages. The missed mediation session by the contractor’s representative is unlikely to automatically prevent you from pursuing your claim in court, although compliance with court-annexed mediation rules is always important.

When Agreements Crumble: Navigating Breach of Contract in Construction

Your situation highlights a common issue in construction and renovation contracts: the failure of one party to perform their obligations according to the agreed terms. When you entered into the contract with BuildRight Builders, both parties assumed reciprocal obligations. You were obliged to pay, and they were obliged to renovate your kitchen according to the specific plans and materials detailed in the contract. Their deviation from these specifications, especially using different, potentially lower-quality materials without your consent, constitutes a violation of their contractual duty.

The core legal principle applicable here is found in the law on obligations and contracts. When one party fails to comply with what is incumbent upon them in a reciprocal obligation, the injured party has the right to seek remedies. A key remedy is rescission, which essentially aims to cancel the contract and restore the parties to their original positions before the contract was made. This means you could potentially demand the return of the P400,000 you paid.

However, for rescission to be granted, the breach must typically be substantial. A substantial breach is one that fundamentally defeats the object or purpose of the parties in entering the contract. Installing entirely different fixtures and tiles, especially when specific brands and types were clearly stipulated, could very likely be considered a substantial breach because it deprives you of the specific quality and aesthetic you contracted for. The contractor’s claim of ‘equivalent quality’ is often not a valid defense when the contract specifies particular items, unless the contract itself allows for such substitution or you explicitly agreed to it later, which you state did not happen.

The courts have recognized that failure to comply with agreed specifications is a significant violation:

Both the RTC and the CA found that petitioners violated the terms of the contract by installing surplus diesel engines, contrary to the agreed plans and specifications… The breach was found to be substantial and sufficient to warrant a rescission of the contract.

Rescission generally involves mutual restitution, meaning both parties should return whatever they received under the contract.

Rescission entails a mutual restitution of benefits received. An injured party who has chosen rescission is also entitled to the payment of damages.

In your case, you paid P400,000. BuildRight Builders provided partial, defective work. Since you haven’t accepted the defective work and they haven’t completed the project according to specifications, the primary focus of restitution would be the return of your payment. You cannot be compelled to return something (a properly renovated kitchen) that you never received in the first place, much like the principle applied when delivery is made to an unauthorized person:

Hence, as the delivery to Rosario was invalid, it was as if respondent never received the lifeboats. As it never received the object of the contract, it cannot return the object. … For this reason, they should return the same amount to respondent.

Regarding the missed mediation session, while attendance is encouraged and part of the process aimed at amicable settlement, a single absence, especially if other sessions were attended, does not automatically lead to the dismissal of a potential case you might file. Dismissal is considered a drastic measure.

Although the RTC has legal basis to order the dismissal… the Court finds this sanction too severe… where the records of the case is devoid of evidence of willful or flagrant disregard of the rules on mediation proceedings. There is no clear demonstration that the absence… during mediation proceedings… was intended to perpetuate delay in the litigation of the case. Neither is it indicative of lack of interest… to enter into a possible amicable settlement…

Therefore, while the contractor’s non-attendance can be noted, it shouldn’t prevent you from pursuing your legal rights if the breach is substantial, as it appears to be in your situation. You have the right to demand what was promised or seek remedies for the failure to deliver.

Practical Advice for Your Situation

• Document Everything: Compile all evidence meticulously. This includes the signed contract, proof of payments (receipts, bank transfers), photographs clearly showing the incorrect fixtures and tiles installed, any written communication (emails, letters) with the contractor regarding the specifications and the subsequent issues, and records of the delays.
• Send a Formal Demand Letter: Before initiating court action, it is advisable to send a formal written demand to BuildRight Builders via registered mail with return card or courier. Clearly state the specific breaches of contract (wrong materials, delay), demand the rescission of the contract, and request the full refund of your P400,000 within a reasonable period (e.g., 15 days). Mention that failure to comply will compel you to seek legal remedies, including damages.
• Reject Defective Work Formally: Ensure you have clearly communicated, preferably in writing, your non-acceptance of the work due to the deviations from the contract. Avoid any actions that could be interpreted as acceptance of the faulty renovation.
• Obtain Quotes for Rectification/Completion: Get estimates from reputable contractors for the cost of removing the incorrect materials and completing the kitchen renovation according to your original specifications. This will be crucial if you decide to claim damages in addition to the refund.
• Consult a Lawyer: Given the amount involved and the clear breach, it is highly recommended to consult with a lawyer specializing in construction disputes or contract law. They can provide guidance tailored to the specifics of your contract and local court procedures, assist with drafting the demand letter, and represent you if litigation becomes necessary.
• Prepare for Possible Legal Action: If the contractor ignores your demand, be prepared to file a civil case for rescission of contract and damages. Your lawyer will guide you through the process.
• Mediation Compliance: If the case proceeds to court, ensure you or your authorized representative diligently attend any court-annexed mediation sessions scheduled. While the contractor’s previous absence might not be fatal to your case, consistent compliance on your part is important.

It’s truly unfortunate that your excitement for a newly renovated kitchen turned into this dispute. By asserting your rights based on the clear terms of your contract and the applicable legal principles, you stand a good chance of obtaining relief, whether through a settlement or a court judgment.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.