Can the Contractor be held liable for any loss or damage suffered by third persons from any defects of the Work?

Yes, there is nothing that limits the liability of the Contractor to third persons who may have suffered losses resulting from the collapse of the Work due to defects in the construction or caused by or resulting from the use of inferior materials or to any violation of the terms of the Contract in accordance with Article 1723 of the Civil Code of the Philippine.

 

Article 1723 of the Civil Code states that "The engineer or architect who drew up the plans and specifications for a building is liable for damages if within fifteen years from the completion of the structure, the same should collapse by reason of a defect in those plans and specifications, or due to the defects in the ground. The contractor is likewise responsible for the damages if the edifice falls, within the same period, on account of defects in the construction or the use of materials of inferior quality furnished by him, or due to any violation of the terms of the contract. If the engineer or architect supervises the construction, he shall be solidarily liable with the contractor…"