GG SPORTSWEAR v WORLD CLASS PROPERTIES

GR No. 182720
MARCH 2, 2010

BRION, J.

FACTS:
World Class Properties is the owner of an office condominium project. GG Sportswear
offered to purchase a penthouse unit and parking slots. They entered into agreement and
GG Sports paid the reservation fee.
The contract to sell pertaining to the Penthouse unit and the parking slots would be
executed upon the payment of 30% of the total purchase price. Petitioner requested the
return of the outstanding postdated with the intent to replace these with new ones,
respondent suggested the execution of a new agreement. Petitioner accepted such.
Respondent demanded petitioner to pay immediately its overdue installment to avoid
penalties.
Petitioner delivered the replacement checks and paid the delayed installments.
Respondent issued a second reservation agreement and also sent a provisional contract to
sell which stated the condominium’s completion date. Petitioner did not sign the second
agreement but requested that one of its check be deposited due to financial difficulties.
Respondent rejected the request. Petitioner sent a letter to respondent stating that the
second agreement is incomplete as it had not expressly provided the completion date.
Thus, petitioner filed a complaint against respondent at the HLURB claiming a refund
and a rescission. The CA denied petitioner’s rescission with the respondent and the refund.

ISSUE:
Can the petitioner rescind the Reservation Contract with respondent?

RULING:
A party can rescind a contract if there is an apparent and evident breach of contract.
There was no breach of contract on the part of World Class to justify the rescission. GG
Sportwear has no legal basis to demand either the rescission of the Agreement . Unless the
parties stipulated it, rescission is only allowed when the breach of contract is substantial and
fundamental to the fulfillment of the obligation.