Article III Section 10

Question 1

Section 10

Answer 1

No law impairing the obligation of contracts shall be passed.

Question 2

Purpose

Answer 2

To safeguard the integrity valid of contractual agreements against states unwarranted interference

Question 3

When does a law impair the obligation of contract?

Answer 3

1. When it changes the terms of the contract (time or mode of performance) 􏰑 moratorium for payment of debts (changes the time or mode of performance)
2. Imposes new conditions 􏰑 Example: The LGU procured a non-air-conditioned dump truck. Later, a law was passed requiring all units to be air-conditioned. The law cannot be made to apply as it imposes a new condition.
3. Dispenses with those expressed or agreed upon 􏰑 Example: The contract entered into stipulates 10% interest. Now, a law provides for the annulment of any interest. That law cannot be applied as it dispenses with those expressed in the contract. (revokes conditions)
4. Withdraws remedies for the enforcement of the rights of the parties 􏰑 Authorizes something differentfor its satisfaction 􏰑 This happens when a law provides for the satisfaction of a debt by service instead of payment of cash.