My contractor walked off the job — can I claim every loss that followed, or only the foreseeable ones?

Two filters, and a loss must pass both

For an obligor in good faith the loss must be among the natural and probable consequences of the breach of the obligation, and it must also be one the parties have foreseen or could have reasonably foreseen. A consequence can pass the first test and fail the second. Rain damage to a house left unroofed when the builder walks off is both natural and foreseeable; the collapse of a separate business deal that depended on a completion date he was never told about may be neither. So list your losses and run each one through both tests on its own rather than as a bundle.

Foreseeability is measured at the start, not at the breach

The article fixes the moment: at the time the obligation was constituted. That is the sentence with the most practical consequence in the provision, because what he learned later does not enlarge his exposure, and what you knew but never told him becomes your own problem. If the project carries an unusual downstream cost — a lease running, an event booked, penalties owed under another contract — the time to put it in writing is when the contract is made. A contractor who was told at signing cannot later say the loss was unforeseeable.

Bad faith removes the filter, not the causal link

The limit is for good faith only. The article continues that in case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. So if he took the downpayment with no intention of finishing, or abandoned the site to force a price increase, foreseeability drops out. Notice what survives. The damages must still be reasonably attributable to the non-performance, so bad faith widens the range of recoverable loss without excusing you from showing where the loss came from.

Two provisions that shape the final figure

Article 2200 provides that indemnification comprehends not only the value of the loss suffered but also the profits the obligee failed to obtain, so an income stream interrupted by the abandonment is in principle claimable. Article 2203 pulls the other way: the party suffering loss must exercise the diligence of a good father of a family to minimise the damages. Sitting on an abandoned site for months without looking for a replacement contractor is the classic way a recoverable loss becomes partly your own. Get quotations promptly and keep them, dated.

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.

• International Exchange Bank vs. Rudy S. Labos And Associates, Inc., Sps. Rodolfo S. Labos And Consuelo R. Labos, And Rockwell Land Corporation, G.R. No. 206327, July 6, 2022 — read the decision on LawPhil →
• Voltaire Hans N. Bongcaya, doing business under the name and style of VHB Biopro, G.R. No. 225438, January 20, 2021 — read the decision on LawPhil →
• Santiago Lighterage Corporation vs. Court of Appeals, et al, G.R. No. 139629, June 21, 2004 — read the decision on LawPhil →
• Spouses Enrique Llonillo and Marites Llonillo vs. People of the Phillippines, G.R. No. 246787, January 30, 2024 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 2200 — Loss Suffered and Profits Not Realized
• Civil Code, Article 2203 — Duty to Mitigate