H.L. Carlos Construction v. Marina Properties Corporation

Summary

This construction contract dispute involved H.L. Carlos Construction Inc.'s claims for unpaid labor escalation costs, change orders, and retention money against Marina Properties Corporation for Phase III of Marina Bayhomes Condominium Project. The Supreme Court applied principles of unjust enrichment and quantum meruit to award partial relief to the contractor while upholding damages against it for project abandonment. The Court distinguished between allowable labor cost escalations (which were contractually permitted and validly incurred during extended periods when work continued with owner's consent) and material cost escalations (which were contractually barred). The decision demonstrates the balance between preventing unjust enrichment when services are rendered and accepted, while enforcing contractual obligations and liquidated damages for breach. The case establishes important precedents for construction contract interpretation, particularly regarding cost escalation clauses and the application of quantum meruit in partially completed projects.