Gf Equity v. Arturo Valenzona

Summary

GF Equity terminated basketball coach Arturo Valenzona's two-year employment contract after eight months, citing a provision allowing termination based on the company's sole opinion of the coach's competence. The RTC upheld the contract provision, but the CA found bad faith and awarded damages. The Supreme Court declared the termination clause null and void for violating the mutuality principle under Article 1308 of the Civil Code, as it granted GF Equity unbridled prerogative to terminate without objective standards. The Court found GF Equity liable under the abuse of rights doctrine (Articles 19-20) for failing to provide legal justification for termination. The decision establishes that contract provisions allowing unilateral termination based solely on one party's subjective opinion violate fundamental principles of contract law and are unenforceable.