R.G. Palanca Construction v. Dr. Francis C. Solco

Summary

This Supreme Court case involved a construction contract dispute between R.G. Palanca Construction and Dr. Francis Solco over a P7 million residential project. The contractor sought P950,831 for additional works while the owner claimed liquidated damages for construction delays. The key legal issue centered on Article 1724 of the Civil Code, which requires written agreements for additional construction works and price modifications in lump sum contracts. Despite the trial court's award to the contractor based on verbal agreements, the Supreme Court ultimately ruled that without the required written authorization, contractors cannot recover costs for additional works, even if actually performed. However, the Court also held that since the additional works necessitated extra time and the owner had granted extensions, no liquidated damages were warranted. This case reinforces the strict compliance requirement for written agreements in construction contracts to prevent disputes and establish clear contractual obligations between parties.