Civil Law, 2022 Bar — Question I-6-a

ESSAY

Jungkook, who owns a building, leases the same to Gel with the following terms: (i) the lease is for a period of ten years; (ii) the yearly rental is Php 1,200,000.00 payable within the first ten days of the current year; and (iii) in case of breach of any of the provisions of the lease, Gel is liable to pay Jungkook five monthly rentals and attorney's fees. Five years into the lease, Gel sends a notice to terminate the lease and offers to pay five monthly rentals. Despite Jungkook's objections, Gel vacates the premises. Jungkook sues Gel for the rentals due for the remaining five years of the lease. Gel takes the position that her liability should only be limited to five monthly rentals and attorney's fees. (a) Is there a penalty clause in the lease agreement? Explain briefly.

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