Quick answer

Usually, no. If a contractor agreed to complete specified construction work for a fixed or lump-sum price, the contractor generally bears ordinary increases in labor, materials, equipment, and other performance costs. The contractor cannot simply revise the price because the project became less profitable than expected.

For construction of a building or other work on land, Article 1724 of the Civil Code allows an increased price for changes in the plans or specifications only when both of these requirements are met:

The owner authorized the change in writing; and
The contractor and owner determined the additional price in writing.

Both requirements are essential. Verbal approval, informal site discussions, an architect’s recommendation, or the owner’s eventual use of the completed building may not cure the absence of the required written documents.

A contractor may nevertheless have a valid claim when the contract itself permits price adjustment, the additional work is genuinely outside the fixed scope and was properly authorized, the stated price was only an estimate or subject to measurement, or another legal or contractual ground applies. The contract, plans, specifications, bills of quantities, change-order provisions, and communications must all be examined before reaching a conclusion.

What a fixed contract price normally means

A fixed-price or lump-sum construction contract assigns the contractor the obligation to perform the agreed scope for the stated amount. The parties may allocate risks differently in their contract, but the usual arrangement places ordinary cost risks on the contractor.

Under Article 1159 of the Civil Code, contractual obligations have the force of law between the parties and must be performed in good faith. A contractor therefore cannot unilaterally replace the agreed price merely because:

Cement, steel, fuel, or other materials became more expensive;
Wages or subcontractor charges increased;
The contractor underestimated quantities or productivity;
The project required more labor than anticipated;
The contractor submitted an unusually low bid;
Delivery costs or exchange rates changed;
The contractor omitted an item that was already required by the plans or specifications; or
The contractor’s expected profit disappeared.

Whether a price is genuinely fixed depends on the entire agreement—not merely the words appearing on the quotation. A document described as a “fixed-price contract” may still contain escalation, provisional-sum, unit-price, allowance, or quantity-adjustment provisions.

Article 1724 and claims for extra construction work

Article 1724 of the Civil Code specifically addresses a contractor who undertakes to build a structure or other work for a stipulated price according to plans and specifications agreed upon with the landowner.

The contractor cannot withdraw or demand a higher price because labor or materials cost more. An increase may be recovered for a change in the plans and specifications only if:

The proprietor authorized that change in writing; and
Both parties determined the additional price in writing.

In Powton Conglomerate, Inc. v. Agcolicol, the Supreme Court treated these written requirements as substantive conditions that must exist before recovery for additional construction work. The Court rejected the additional-cost claim even though revisions had occurred because the contractor had proceeded without first securing the necessary written authority and written agreement on price.

The decision also explains why unjust enrichment is not an automatic fallback. A contractor who knowingly performs extras without complying with Article 1724 assumes the risk that payment will be denied. The owner must be given an opportunity, before the additional expense is incurred, to accept the price, negotiate, reject the change, reduce the scope, or engage someone else.

When a contractor may lawfully charge more

A properly executed variation or change order

The clearest basis is a written change order signed or approved by persons authorized under the contract. It should identify:

The exact change in scope;
Revised drawings or specifications;
The increase or decrease in price;
Any adjustment to the completion date;
The method used to price the change;
The effect on warranties, testing, and acceptance; and
The date on which the contractor may begin the changed work.

For work governed by Article 1724, written approval of the work alone is insufficient if the additional price was not also determined in writing.

Work genuinely outside the original scope

A contractor may claim that an item was not part of the original undertaking at all. This is a document-sensitive question. The answer may depend on:

The signed contract and annexes;
Architectural, structural, electrical, plumbing, and mechanical plans;
Technical specifications;
The bill of quantities;
The contractor’s proposal and exclusions;
Site investigation provisions;
Coordination and “complete and operable system” clauses;
The hierarchy of contract documents; and
Clarifications issued before signing.

Merely labeling work as an “extra” does not make it one. Work reasonably necessary to deliver the promised result may already fall within the agreed scope, especially when the contract states that the contractor must supply everything needed for complete performance.

A contractual escalation or price-adjustment clause

The parties may expressly allow adjustment for specified events, such as:

Changes in law, taxes, or mandatory wage rates;
Defined movements in material-price indices;
Currency fluctuations;
Owner-caused delay extending procurement into a later period;
Suspension of work beyond a stated duration; or
Specified extraordinary market events.

The contractor must follow the clause exactly. This may require prompt written notice, supporting invoices or indices, proof of causation, mitigation records, and submission within a contractual period. A valid adjustment is calculated under the agreed formula; it is not whatever amount the contractor later chooses.

A unit-price or remeasurement contract

A stated total may only be an estimated contract value if payment is based on actual measured quantities multiplied by agreed unit rates. In that arrangement, the final amount can exceed the initial estimate without changing the unit prices.

The issue is whether the parties agreed to:

A fixed total price;
Fixed unit rates with variable quantities;
Cost reimbursement plus a fee;
Time-and-materials billing;
Provisional sums or allowances; or
A combination of these methods.

Actual measurements, accomplishment reports, delivery records, and the contract’s measurement rules become critical.

Owner-caused delay, obstruction, or breach

A contractor may have a separate damages or extension claim when the owner breaches the contract—for example, by failing to provide access, drawings, decisions, materials, or agreed progress payments.

This is not necessarily an “increase in the fixed price.” It may be a claim for proven loss caused by breach under the contract and the Civil Code. Recovery will depend on notice clauses, causation, supporting records, contractual limitations, and whether the contractor contributed to the delay.

The contractor should distinguish among:

Payment for added scope;
Adjustment allowed by a price-escalation clause;
Extension of time;
Prolongation or standby costs;
Damages for breach; and
The unpaid balance of the original price.

Combining all of them into an unsupported “additional billing” weakens the claim.

A later contract covering separate work

Article 1724 was held inapplicable in Royal Lines, Inc. v. Court of Appeals, which involved work on a vessel rather than construction on land. The Supreme Court applied the general rules on contracts and upheld a separate oral agreement for additional vessel work.

That ruling should not be used to bypass Article 1724 in an ordinary land-based construction project. It illustrates that the subject matter and the precise legal nature of the additional work matter.

What usually does not justify a higher price

Ordinary inflation or rising material prices

An ordinary market increase normally remains the contractor’s risk under a fixed-price arrangement.

Article 1250 of the Civil Code addresses extraordinary inflation or deflation of the stipulated currency, but it is not a general construction-price escalation provision. The Supreme Court has required something unusual and beyond ordinary currency fluctuations—not simply a continuing rise in commodity prices. In Filipino Pipe and Foundry Corporation v. NAWASA, evidence of substantial inflation did not establish the extraordinary inflation contemplated by Article 1250.

Moreover, Article 1250 concerns the value of the currency used for payment. It does not automatically rewrite a fixed price whenever particular construction inputs become more expensive.

A verbal instruction from someone without authority

Instructions from an architect, engineer, foreman, project manager, relative of the owner, tenant, or site representative may not bind the owner unless that person had actual authority under the contract or applicable law.

Even when the owner personally requested the change, Article 1724 still requires the prescribed writings for a claim involving changed plans or specifications in land-based construction.

Submission of a quotation after completing the extra work

A unilateral quotation, billing, or demand sent after completion does not by itself prove that the owner agreed to the additional price beforehand.

The proper sequence is generally:

Identify the change;
Give contractual notice;
Prepare the cost and time proposal;
Obtain written authority;
Record the agreed additional price in writing; and
Perform the changed work.

Emergency conditions may require immediate protective measures, but the contractor should document the danger, notify the authorized owner representative immediately, limit work to what is reasonably necessary, and follow the contract’s emergency procedure.

Acceptance or occupancy of the building

Use, occupancy, or acceptance can be relevant evidence in some disputes, but it does not automatically satisfy Article 1724’s written conditions for recovering the cost of changed work. Courts will not necessarily award extras merely because the owner benefited from them.

Contractor error or omitted work

If the disputed work was necessary only because the contractor made a design, coordination, quantity, or execution error for which it was responsible, the correction will ordinarily not support an additional charge.

Responsibility may be less clear in design-build projects, owner-supplied designs, or cases involving concealed site conditions. The risk-allocation clauses and technical evidence must be reviewed.

Can the owner refuse the increase but keep the project?

The owner may generally insist on performance at the agreed price if the requested work remains within the original scope and the owner is complying with the contract.

For a true change outside that scope, the owner should not direct the contractor to proceed while deliberately avoiding the agreed change-order process. The owner should instead:

Reject the proposed change in writing;
Clarify that the work is already included in the contract, if that is the position;
Request a detailed breakdown;
Negotiate a written change order;
Reduce or redesign the proposed work; or
Follow the contract’s dispute-resolution mechanism.

The contractor should not abandon the project merely because an extra-work claim is disputed. Unjustified suspension or abandonment may itself constitute breach. If continued performance would prejudice rights, the contractor should obtain legal advice and issue a carefully framed reservation of rights.

What if the contract says changes must be in writing?

That provision should be treated as binding. The contract may impose requirements even stricter than Article 1724, including:

Use of a prescribed change-order form;
Approval by a named officer or owner;
Certification by the architect or engineer;
Submission before work begins;
Detailed cost substantiation;
Waiver for late notice;
Daily records for force-account work; and
A contractual ceiling on variations.

Emails or electronic documents may potentially satisfy a writing requirement, depending on their content, authenticity, the parties’ agreement, and the Electronic Commerce Act. A casual message such as “go ahead” may still be inadequate if it does not identify the change, establish the sender’s authority, and record the agreed additional price.

Special warning for government construction contracts

Public infrastructure contracts are subject to public-procurement, budgeting, auditing, and approval rules in addition to the Civil Code and the contract documents. The current framework is Republic Act No. 12009, or the New Government Procurement Act, and its implementing rules.

A government employee’s verbal instruction does not necessarily obligate the government to pay. Contractors should not commence a variation based only on informal assurance. They should verify:

The official authorized to approve the variation;
Availability and certification of funds;
The required technical justification;
Notice and approval procedures;
The allowable variation and cumulative limits;
The required supplemental agreement or contract modification; and
Applicable Commission on Audit requirements.

Quantum meruit recovery against the government is exceptional, not a dependable substitute for authorization. In E.L. Saniel Construction v. Commission on Audit, the Supreme Court upheld the denial of payment for unapproved additional works. The contractor had unilaterally proceeded and informed the government entity only after project completion. The Court stressed the importance of prior approval and treated equitable recovery in government contracts as an exception requiring strong proof of authorization, performance, delivery, and public benefit.

Because public-procurement rules and transition arrangements can change, the applicable version must be checked against the project’s procurement and contract dates. The Government Procurement Policy Board publishes Republic Act No. 12009’s implementing rules and current issuances.

Practical steps for an owner disputing an increase

Do not approve or reject the demand casually. Avoid statements that could be treated as an admission before reviewing the documents.
Request a complete written claim. Require the contractor to identify each alleged extra, the instruction relied upon, the approving person, relevant plan revisions, dates, quantities, unit costs, and contractual basis.
Compare the claim with the original scope. Review every incorporated plan, specification, proposal, exclusion, allowance, and clarification—not just the main agreement.
Check authority. Determine whether the person who supposedly ordered the work was authorized to change scope and price.
Separate undisputed amounts. A dispute over extras does not necessarily justify withholding the unpaid balance for properly completed original work.
Inspect and document the site. Photograph the work and engage an independent architect, engineer, or quantity surveyor where technical scope or valuation is disputed.
Respond in writing. State which items are accepted, rejected, or still under review and why. Reserve contractual and legal rights.
Follow the dispute clause. The contract may require negotiation, architect’s determination, mediation, arbitration, or court action.

Practical steps for a contractor seeking additional payment

Stop treating site conversations as approval. Send a formal written notice as soon as a possible change is identified.
Quote the contractual basis. Identify the relevant drawings, specification clauses, exclusions, allowances, or change provisions.
Explain why the work is additional. Show how it differs from the original scope and why it was not part of the contractor’s assumed risk.
Submit the price and time effect before proceeding. Include quantities, rates, supplier quotations, taxes, overhead, and schedule consequences as permitted by the contract.
Obtain the required signatures. Confirm that the signatories have authority to bind the owner.
Keep separate records. Track labor, materials, equipment, subcontractors, photographs, and dates for each change.
Give all required notices. Delay, concealed-condition, suspension, extension, and additional-cost claims may have different notice requirements.
Do not inflate the claim. Unsupported markups or reconstructed estimates can undermine otherwise legitimate items.
Continue undisputed obligations unless legally entitled to suspend. Wrongful work stoppage may expose the contractor to delay damages, replacement costs, or termination.

Evidence both sides should preserve

Preserve original and backed-up copies of:

The signed contract and all annexes;
Invitations to bid, proposals, estimates, and clarifications;
Plans and specifications at every revision;
Bills of quantities, schedules of values, and unit-rate sheets;
Notices to proceed and commencement records;
Change orders, variation proposals, and approvals;
Emails, messages, letters, and meeting minutes;
Site instructions and requests for information;
Daily logs, manpower reports, and equipment records;
Delivery receipts, purchase orders, and supplier invoices;
Progress billings, payment certificates, and official receipts;
Inspection, testing, punch-list, turnover, and acceptance records;
Photographs and videos with reliable dates;
Project schedules and delay analyses; and
Records showing the authority of representatives.

Do not alter messages, reconstruct documents without labeling them, or rely solely on screenshots when original electronic files and metadata remain available.

Common mistakes

Assuming every price shown in a quotation is automatically a legally fixed total;
Confusing a scope clarification with a compensable change;
Starting extra work before price and authority are documented;
Allowing an architect or site engineer to approve money without contractual authority;
Treating higher material prices as automatic legal grounds for escalation;
Assuming owner occupancy guarantees payment for undocumented extras;
Withholding the entire contract balance because only extras are disputed;
Ignoring notice, waiver, certification, or dispute-resolution clauses;
Using unjust enrichment to avoid Article 1724’s requirements;
Failing to distinguish owner-caused costs from contractor inefficiency; and
Waiting until project completion to raise a claim.

When legal help is urgent

Seek prompt advice from a construction lawyer when:

The contractor threatens to abandon or suspend the project;
The owner threatens termination, takeover, or calling a performance bond;
The disputed work is about to be concealed or demolished;
A lien, adverse claim, injunction, or bond demand is threatened;
The project involves a government entity or public funds;
A contractual notice or filing deadline is near;
There are allegations of falsified change orders or unauthorized signatures;
Safety defects or structural issues are involved;
The parties are considering signing a final waiver, release, or quitclaim; or
The amount is large enough to justify independent engineering or quantity-survey evidence.

Prescription periods depend on the nature and source of the action. Under the Civil Code, actions upon a written contract are generally subject to a 10-year period, while actions upon an oral contract are generally subject to a six-year period, counted from accrual. Other causes of action may carry different periods. Contractual claim-notice deadlines can be much shorter, so the statutory period should not be treated as permission to delay.

Frequently asked questions

Can a contractor increase the price because materials doubled in cost?

Not ordinarily under a fixed-price contract. A valid escalation clause or another specific contractual or legal ground would be needed. Ordinary price inflation by itself does not authorize a unilateral increase.

Is the owner liable if the architect verbally ordered additional work?

Not necessarily. Authority must be established, and Article 1724 generally requires the owner’s written authorization plus a written agreement on the additional price for changed plans or specifications in land-based construction.

Is a signed change order enough if it has no price?

It may prove authorization of the change, but Article 1724 also requires the additional price to be determined in writing by both parties. The safest document states both the scope and the price before work begins.

Can text messages count as written approval?

Potentially, but only if they reliably establish the parties, authority, scope, and agreement required by law and contract. A message authorizing work without agreeing on the additional price may still be insufficient.

Can the contractor charge for hidden conditions?

Possibly, if the contract allocates that risk to the owner or provides relief for concealed or materially different site conditions. The contractor must comply with inspection, notice, documentation, and approval provisions. If the contract placed site-condition risk on the contractor, recovery may be difficult.

Can an owner refuse all payment because the extra-work claim is invalid?

Not automatically. Invalid extras are distinct from the unpaid balance for completed and accepted work within the original contract. Defects, delay, retention, setoff, and withholding rights must be evaluated separately.

Can the parties agree to a higher price after the dispute begins?

Yes. They may settle or amend their arrangement through a properly authorized written agreement. The document should define the accepted amount, remaining work, payment schedule, releases, warranties, and whether any claims are reserved.

Does this rule apply to renovation work?

It can. Article 1724 refers to building a structure “or any other work” for a stipulated price according to agreed plans and specifications on land. The precise application depends on the nature of the renovation and the agreement.

Official legal sources

This article provides general legal information, not advice for a particular construction dispute. The controlling result depends on the complete contract, project documents, authority of the persons involved, applicable procurement rules, and evidence. Legal sources and procedures were checked as of August 24, 2026.