Construction issues

Hello: Based on Philippine law, if the company has not substantially completed the work agreed upon, and the quality of their performance is defective or below the standard stipulated in the contract, you are legally justified in withholding payment of the remaining balance.
Under Article 1191 of the Civil Code, when one party fails to comply with what is incumbent upon him, the other party may either rescind the contract or demand its fulfillment, with damages in either case. In contracts for services or construction, payment is generally due only when the contractor has substantially performed the work in accordance with the contract.
a.) Since your contract clearly states that the final balance is due only “upon completion of work,” the company cannot validly demand or sue for the remaining amount unless completion has indeed occurred.
b.) You may also raise the defense of defective performance under Articles 1715 and 1723 of the Civil Code, which impose liability on the contractor or service provider for defects or poor workmanship.
c.) If they threaten to sue, you can defend yourself by proving that (1) the work is incomplete, (2) the workmanship is substandard, and (3) you have communicated your refusal to pay the final balance because of those deficiencies.
As a practical step, you should document the defects and unfinished work (through photos, written complaints, or third-party inspection) and formally notify the company in writing that payment will only be made upon satisfactory completion per the contract.
If the company still insists or files a case, the court will look into whether there was substantial performance or breach of the contract. In many similar cases, courts have ruled in favor of the client when the contractor failed to meet the agreed standards.
We can assist you in drafting a formal Notice of Defective Work and Demand for Rectification, or represent you if they file a complaint. Our firm, Recososa Law Firm, is located in the Philippines with offices in Luzon, Visayas, and Mindanao. We can schedule an initial consultation via Google Meet, Zoom, or a physical meeting at our office.
If this answered your concern, I hope it is not too much to ask to like and share our pages below.
Sincerely, ATTY. JOFRE B. RECOSOSA
Owner/Managing Partner
Recososa Law Firm

Hello: Based on Philippine law, if the company has not substantially completed the work agreed upon, and the quality of their performance is defective or below the standard stipulated in the contract, you are legally justified in withholding payment of the remaining balance.

Under Article 1191 of the Civil Code, when one party fails to comply with what is incumbent upon him, the other party may either rescind the contract or demand its fulfillment, with damages in either case. In contracts for services or construction, payment is generally due only when the contractor has substantially performed the work in accordance with the contract.

a.) Since your contract clearly states that the final balance is due only “upon completion of work,” the company cannot validly demand or sue for the remaining amount unless completion has indeed occurred.
b.) You may also raise the defense of defective performance under Articles 1715 and 1723 of the Civil Code, which impose liability on the contractor or service provider for defects or poor workmanship.
c.) If they threaten to sue, you can defend yourself by proving that (1) the work is incomplete, (2) the workmanship is substandard, and (3) you have communicated your refusal to pay the final balance because of those deficiencies.

As a practical step, you should document the defects and unfinished work (through photos, written complaints, or third-party inspection) and formally notify the company in writing that payment will only be made upon satisfactory completion per the contract.

If the company still insists or files a case, the court will look into whether there was substantial performance or breach of the contract. In many similar cases, courts have ruled in favor of the client when the contractor failed to meet the agreed standards.

We can assist you in drafting a formal Notice of Defective Work and Demand for Rectification, or represent you if they file a complaint.

Our firm, Recososa Law Firm, is located in the Philippines with offices in Luzon, Visayas, and Mindanao. We can schedule an initial consultation via Google Meet, Zoom, or a physical meeting at our office.

If this answered your concern, I hope it is not too much to ask to like and share our pages below.