If a contractor supplies the materials, does the finished work also come with a warranty against title defects, like in a sale?

Why this looks like a sale in the first place

When a contractor supplies its own materials to produce the work, the contractor is not merely applying labor to something you already own — it is creating a thing out of its own materials and then delivering it to you, transferring dominion, or ownership, over that finished thing. That transfer of ownership is exactly what happens in a sale, which is why the law pulls in the pertinent rules on warranty of title, warranty against hidden defects, and payment of price to govern this kind of contract for a piece of work, alongside the rules that ordinarily apply to contracts of this kind.

What warranty of title covers

A warranty of title is, at its core, an assurance that the person transferring a thing actually has the right to transfer it, free from a claim that could dispossess you of it later. Carrying this warranty into a materials-furnished contract for a piece of work means the contractor is answerable if the materials it used, or the finished thing itself, turn out to be encumbered by a right or claim of a third person that the contractor did not disclose — the same protection a buyer would expect from a seller.

What warranty against hidden defects adds

Alongside title, the same sale-like treatment brings in the warranty against hidden defects — defects in the materials or workmanship that are not apparent on ordinary inspection and that make the finished thing unfit for its intended use, or that diminish its value enough that you would not have accepted it, or would have paid less, had you known. This gives you recourse against the contractor for problems in what was delivered that only surface after the fact, not just problems in who owns it.

Both warranties exist because the contractor, by furnishing the materials, is standing in a position much closer to a seller than to a mere laborer working on your own property.

Why this depends on who supplied the materials

This sale-like treatment is tied specifically to the contractor furnishing the materials and producing the thing from them. Where you, as the employer, supply the materials and the contractor is simply applying labor and skill to what is already yours, the situation is different: there is no transfer of dominion over materials the contractor never owned, so the reasoning that pulls in a sale's warranties does not carry over the same way. Whether materials came from you or from the contractor is therefore the detail that decides which set of rules is really in play.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Robert San Pedro vs. Willy Ong & Norma Caballes, G.R. No. 177598, October 17, 2008 — read the decision on LawPhil →
• Commissioner of Internal Revenue vs. Court of Appeals, et al, G.R. No. 115349, April 18, 1997 — read the decision on LawPhil →
• Engineering & Machinery Corp. vs. Court of Appeals, et al, G.R. No. 52267, January 24, 1996 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1714 — Work With Materials Furnished by Contractor