LAW ON OBLIGATION AND CONTRACTS

TIKTOK-19 is a highly transmissible virus that affects the brain of the patient triggering involuntary and zombie like movement particularly if music is played. Persons afflicted with the virus will dance nonstop until he or she dies. Since the last quarter of 2019 majority of the countries in the world experienced the spread of the said virus in their territories prompting the World Health Organization (WHO) to declare a global pandemic. However, at the middle of 2020, vaccines to combat the said virus were developed by leading pharmaceutical companies around the world and they were found effective to stop the further spread of the virus and loss of life. For this reason, the Republic of the Philippines introduced a law requiring a mandatory vaccination against TIKTOK-19 for the adult population.

Thus, in order to develop and mass-produce vaccines against TIKTOK-19, Sino Ba Corp. and iTusok Corp. entered into a contract. Sino Ba Corp. promised and agreed to build the laboratory facility of iTusok Corp. for purposes of vaccine research and development. According to the stipulations agreed into by the parties in the contract, Sino Ba Corp. promised to complete the construction of the facility within eighteen months, for the aggregate price of P20, 000,000. Pursuant to their agreement, iTusok Corp. paid fifty per cent of the total contract price. The remaining balance will be paid by iTusok Corp. upon completion of the construction. The building construction begun immediately, however, Sino Ba Corp. later experienced stoppage of work due to labor dispute in the company. Sino Ba Corp's employees claimed that they have not received their salaries as well as holiday pay and overtime pay. As of the seventeenth month, only fifty per cent of the work was completed. Sino Ba Corp. asked iTusok Corp. to amend their contract so as to extend the time for the completion of the project due to labor disputes within its company, and that such constitutes a fortuitous event. However, the request was denied by iTusok Corp. reiterating the need to develop vaccines at the soonest possible time due to the increasing death rates caused by TIKTOK-19, which mutated and now targets even the older population- making them dance nonstop, particularly to the tune of "Budots". Later, it became apparent that the project cannot be finished on time. Therefore, iTusok Corp. issued a written notice to Sino Ba Corp. unilaterally and immediately cancelling their contract.

a. Based on the facts presented, is Sino Ba Corp. correct in arguing that the labor dispute it experienced constitutes a fortuitous event?

b. Is the act of iTusok Corp. in unilaterally and immediately cancelling the contract proper?

c. Should Sino Ba Corp., on account of the cancellation of the contact, now return the fifty per cent down payment which was initially paid to it by iTusok Corp.?