Broadway Centrum Condominium Corporation v. Tropical Hut Food Market

Summary

This Supreme Court decision established important precedent on contract novation in lease agreements. Broadway leased commercial space to Tropical for 10 years with escalating rentals. When Tropical faced low sales due to road closure, parties executed a 'provisional and temporary' rental reduction agreement. When Broadway later sought to restore original rates, Tropical claimed the agreement permanently modified the lease. The Supreme Court reversed lower court findings of novation, emphasizing that novation requires clear intention and cannot be presumed. The Court noted the agreement's express temporary nature and non-amendment language, applying Civil Code Article 1292's strict requirements. This case clarifies that accommodation agreements labeled as temporary cannot easily be construed as permanent contract modifications, protecting lessors' rights while recognizing legitimate business adjustments during extraordinary circumstances.