Courts have ruled that there was no justification for the early termination of the contract.
The incident occurred in Arenal in April 2019.
"Necessary, suitable and proportionate"; violation of fundamental rights is "tenuous".
The Supreme Court has rejected proposed regulation in Andalusia.
The Balearic Government says it respects the Supreme Court ruling but recommends following its own rules.
There will be a decision before the current curfew extension expires.
Pedro Sánchez will declare a State of Emergency in Madrid if Isabel Díaz Ayuso doesn't take action before 1200 on Friday.
The Balearics High Court has annulled the €300,000 fine imposed on Airbnb for advertising unregistered tourist apartments on its website.
Airbnb wins court case
Nurses claim Spanish Prime Minister and Health Minister are responsible for deaths of Healthcare Professionals killed by Covid-19.
Healthcare Professionals at Hospital del Henares, Madrid.
Breaking news: Historic ruling
Licences could soon become available. It is reckoned there could be as many as a thousand in the Balearics.
Urdangarin maintains that his sentence was based on "illogical and absurd grounds".
Lemon Factory is hopeful that the Supreme Court will now overturn the Balearic court decision.