Business Law Case: Gamesa Energy USA v. Ten Penn Center

This case study discusses the breach of contract between Gamesa Energy USA and Ten Penn Center. It covers the terms of the lease, subletting, and the violation of contract terms. The case is related to the law of contract and the court ruled in favor of the plaintiff.

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Case: Gamesa Energy USA v. Ten Penn Center, 2016 Phila. Ct. Com. Pl. LEXIS 270- Breach of
contract.
In this case there has been a dispute between the plaintiff Gamesa Energy USA and the
defendant Ten Penn Center in relation to a lease which had been entered upon by them through
which the defendant had leased out a property to the plaintiff. The lease has the provisions that it
would come to an end on 1st September 2018. In addition under the lease the defendant had to
provide the plaintiff with a large “improvement allowance” which was to be utilized for building
out space according to the requirement of the plaintiff. Moreover the plaintiff had the right to
sublet the property under the lease which was subjected to the approval of the defendant.
However it had been stated in the lease that the lessor did not have the right to withhold, delay or
condition the approval in an unreasonable manner. The terms of the lease further make it clear
that the approval or denial of the subtenant has to be made in a written manner within 30 days of
the request of sub tenancy made by the tenant. The tenant after being on the property for several
years decided to sublet the property to Viridity Energy, Inc in part. The sublet agreement had
been approved by the defendant. The plaintiff used the remaining improvements allowance in
part to customize the property as per the needs of Viridity’s use. This only left the plaintiff with a
further fund of $391,000 in relation to the improvements allowance.
It had been informed by the plaintiff to the defendant after a year that they would be vacating the
property as their corporate office is to be moved at a different location. However it had been
notified by the plaintiff to the defendant they would continue to pay the rent of the property and
would be looking for a subtenant to be placed in the remaining part of the property. The

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defendant responded to this by stating that the plaintiff cans no longer use of $391,000 in relation
to the improvements allowance to accommodate the needs of the new subtenants. However the
plaintiff moved out before the issue had been resolved and in the process was assisted by
landlord’s building’s management personnel as they helped the plaintiff by providing access to
loading docks and building elevators. A new subtenant had been proposed by the plaintiff to the
defendant after a month in writing which also included plans of hiring an architect and a building
contractor. The defendant at this point informed the plaintiff that they have contravened the
provisions of the lease by vacating the premises in a way which “otherwise than in the ordinary
and usual course of business.” In addition there was a failure on the part of the defendant to
notify within a 30 day period to the plaintiff that whether the sub tenancy had been approved or
not. In the given situation the first subtenant at all times occupied the portion of the property
which had been sublet to them by the plaintiff. A claim had been made by the plaintiff against
the defendant in this case where they claimed declaratory judgment, breach of contract claims,
unjust enrichment and tortuous infringement in relation to economic loss. During the claim the
defendant continued to accept rent from the plaintiff.
In the given situation it can be stated that the case is related to the law of contract which have
been discussed in the class. There was an offer and acceptance between the parties in relation to
the lease of the property. The consideration which had been present in the given situation is the
property which is leased out and the rent which is paid by the lessee. There has been a breach in
relation to the terms of the contract which appear to be the condition of the contract. This means
that of such terms is violated the aggrieved party not only can claim damages as well as rescind
the present contract.

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In the given situation a defense had been raised by the defendant that as the property was vacated
the rights in relation to the property had been lost. However it can be stated in the situation that
as the first subtenant at all times occupied the portion of the property which had been sublet to
them by the plaintiff and the defendant continued to accept the rent from the plaintiff it cannot be
stated that the plaintiff actually vacated the property in the way it would have contravened the
provision of the lease. Further in the given situation there was a term provided in the lease that
the approval or denial of the subtenant has to be made in a written manner within 30 days of the
request of sub tenancy made by the tenant. However the term had been violated by the defendant
which is a clear breach of contract. Where there is a breach of contract the person who has done
it is liable to pay damages to the party who has suffered loss in relation to the contract. In the
given situation as the sublet agreement was not approved by the defendant within the prescribed
time in the lease the plaintiff incurred losses in relation to the potential profit which they would
have earned by sub letting the remaining proportion of the premise. I come to a conclusion that
the case should be ruled in favor of the plaintiff based on the provisions of contract law.
in the given situation the court ruled the case in favor of the plaintiff. The court in this case held
that the defendant had violated the terms of the contract and thus he is liable to pay
compensation to the plaintiff. The court in this case calculated the compensation which was to be
paid by the defendant to the plaintiff as $3,639,202 and $265,463, plus $18,279 to compensate
the plaintiff for the loss incurred by him.

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References
Chapter 9-12 of class notes
Gamesa Energy USA v. Ten Penn Center, 2016 Phila. Ct. Com. Pl. LEXIS 270