Pallets are popular for a good reason, they make great furniture!. This sofa is a project that can utilize either pallet wood or regular lumber. When you look at the tutorial it looks like Donna at Funky Junk Interiors used regular lumber for the supporting areas and pallet lumber for the seat and back.
It is perfect for building for your porch or patio. She chose to not seal it because it is in a protected area but it would definitely need either paint or sealant if you leave it completely outside. The dimensions may differ a little for you, depending on what you use for cushions. Donna used a futon mattress for the seat but you could also go the rustic route and stuff burlap bags like she shows in this picture. It certainly fits with the rustic look.
You can find the complete tutorial at Funky Junk Interiors.