This case involves a contract dispute between Pryce Corp. and PAGCOR regarding a lease agreement for casino space. Pryce leased hotel lobby and office space to PAGCOR for 3 years to operate a casino. However, local ordinances later prohibited casinos, forcing PAGCOR to discontinue operations after 1 year. Pryce sued to terminate the contract and receive future rentals for the remaining 2 years, citing contract clauses allowing termination for breach and holding PAGCOR liable for full rent. The Court ruled in favor of Pryce, finding the contract clauses valid and PAGCOR liable for future rentals per the agreement.
This case involves a contract dispute between Pryce Corp. and PAGCOR regarding a lease agreement for casino space. Pryce leased hotel lobby and office space to PAGCOR for 3 years to operate a casino. However, local ordinances later prohibited casinos, forcing PAGCOR to discontinue operations after 1 year. Pryce sued to terminate the contract and receive future rentals for the remaining 2 years, citing contract clauses allowing termination for breach and holding PAGCOR liable for full rent. The Court ruled in favor of Pryce, finding the contract clauses valid and PAGCOR liable for future rentals per the agreement.
This case involves a contract dispute between Pryce Corp. and PAGCOR regarding a lease agreement for casino space. Pryce leased hotel lobby and office space to PAGCOR for 3 years to operate a casino. However, local ordinances later prohibited casinos, forcing PAGCOR to discontinue operations after 1 year. Pryce sued to terminate the contract and receive future rentals for the remaining 2 years, citing contract clauses allowing termination for breach and holding PAGCOR liable for full rent. The Court ruled in favor of Pryce, finding the contract clauses valid and PAGCOR liable for future rentals per the agreement.
This case involves a contract dispute between Pryce Corp. and PAGCOR regarding a lease agreement for casino space. Pryce leased hotel lobby and office space to PAGCOR for 3 years to operate a casino. However, local ordinances later prohibited casinos, forcing PAGCOR to discontinue operations after 1 year. Pryce sued to terminate the contract and receive future rentals for the remaining 2 years, citing contract clauses allowing termination for breach and holding PAGCOR liable for full rent. The Court ruled in favor of Pryce, finding the contract clauses valid and PAGCOR liable for future rentals per the agreement.
Corp.
v.
PAGCOR
497
Phil
490
|
06
May
2005
|
Panganiban,
J.
Princess
Trisha
Joy
Z.
Uy
|
Law
101-Obligations
and
Contracts
|
Grp3
Pryce
entered
a
contract
of
lease
with
PAGCOR.
Pryce
wants
to
terminate
the
contract
and
wants
to
be
paid
the
future
rentals,
which
PAGCOR
didnt
want.
Stipulations
in
their
contract
held
PAGCOR
liable.
Facts:
! Pryce
made
representations
with
the
PAGCOR
on
possibly
setting
up
a
casino
in
Pryce
Plaza
Hotel.
! PAGCOR
went
to
CDO
to
check
out
the
place
and
conduct
marketing
research.
! 1992
-
they
entered
a
contract
where
Pryce
is
to
lease
its
hotel
lobby
plus
1000
square
meters
of
space
to
PAGCOR
for
3
years.
! 1990
-
CDO
released
a
resolution
prohibiting
the
establishment
and
operation
of
a
gambling
casino
in
the
city.
! Hours
before
the
opening
of
the
casino,
some
people
staged
a
rally
in
front
of
the
hotel,
suspending
the
operations
of
the
casino.
! 1993
-
CDO
released
Ordinance
No.
3353
prohibiting
the
operation
of
casinos
in
CDO.
! Pryce
petitioned
and
prayed
that
the
ordinance
be
declared
unconstitutional.
! CA
declared
the
ordinance
unconstitutional.
! PAGCOR
resumed
the
operations
of
the
casino
while
the
appeal
was
pending
in
the
SC.
! The
operations
were
suspended
due
to
incessant
demonstrations.
! PAGCOR
discontinued
the
operations
in
September
1993
and
was
not
amenable
to
paying
for
the
whole
three
years.
Issue/Ratio:
WON
Pryce
is
entitled
to
the
payment
of
future
rentals
for
the
unexpired
period
of
the
contract.
YES
Obligations
arising
from
the
contracts
have
the
force
of
law
between
the
contracting
parties.
! In
the
event
of
default
or
breach
of
any
of
such
terms,
conditions
and/or
covenants,
xxx
the
LESSOR
shall
have
the
right
to
terminate
and
cancel
this
contract
xxx
! LESSEE
shall
be
fully
liable
to
the
LESSOR
for
the
rentals
corresponding
to
the
remaining
term
of
the
lease
as
well
as
for
any
and
all
damages
xxx
! The
above
stipulations
are
not
contrary
to
law,
and
nothing
is
objectionable
about
it.
Rescission
v.
Termination
Rescission
is
predicated
on
the
breach
of
faith
that
violates
the
reciprocity
between
the
parties.
The
unmaking
of
a
contract.
May
be
effected
by
both
parties
by
mutual
agreement;
or
by
one
party
declaring
a
rescission
of
contract
without
the
consent
of
the
other
if
a
legally
sufficient
ground
exists.
Termination
entails
the
enforcement
of
the
contracts
terms
prior
to
the
declaration
of
its
cancellation.
End
in
time
or
existence.
Pryce
did
not
intend
to
rescind
! In
a
rescission,
mutual
restitution
is
required,
Pryce
would
re-acquire
the
hotel,
and
PAGCOR
would
get
back
the
rentals
it
paid.
! Here,
Pryces
actions
do
not
call
for
a
rescission,
in
fact,
the
petitioner
is
even
asking
for
the
payment
of
accrued
rentals.
