Mr. & Mrs. George R. Tan v. G.V.T. Engineering Services

Summary

This Supreme Court case involves a construction contract dispute where spouses Tan contracted G.V.T. Engineering Services for P1,700,000.00 to build their house. During construction, the spouses deleted several major work items from G.V.T.'s scope and awarded them to other contractors, while also delaying material deliveries. G.V.T. withdrew after completing 74% of work and sued for breach of contract. The Supreme Court upheld lower courts' findings that spouses Tan breached the contract through unjustified deletions and delays, ordering payment of P366,340.00 balance and P20,772.05 retention fee. The case establishes important precedents on substantial performance under Civil Code Article 1234, the technical nature of sole proprietorship naming issues, and the principle that contractors who substantially perform in good faith before being forced to withdraw due to owner's breach can recover as if they completed performance. The decision reinforces contractual obligations and the relativity of contracts principle.