Question

You are a lawyer representing a client who entered into a contract with a construction company for the renovation of their property. The agreed contract price was Php 1 million and the construction company was given a 6-month period to complete the renovation works.

After 6 months, the construction company completed the renovation but informed your client that due to unforeseen circumstances, the cost of materials and labor significantly increased. As a result, they are now demanding an additional payment of Php 500,000 in order to proceed with turning over the property to your client.

Meanwhile, your client has discovered that the construction company failed to secure the necessary permits and clearances, resulting in penalties and fines from the government. Furthermore, some of the renovation works have defects and poor workmanship.

Your client wants to know their rights and legal remedies in this situation. Answer the following questions:

1. What is the legal concept of unjust enrichment? Explain its elements and how it applies in this case.
2. What are the rights and legal remedies available to your client with regards to the additional payment demanded by the construction company?
3. Can your client seek reimbursement for the penalties and fines imposed by the government? Discuss the legal basis for such reimbursement.
4. What actions can your client take to address the defects and poor workmanship in the renovation works? Discuss the legal options available.