Practice question
A national government agency invites bids for a twenty-year concession to operate a public facility. Its bidding documents promise that the agreement will prevail over any inconsistent Philippine legal requirement. Congress later passes a statute authorizing the agency to honor that promise. After signing, investors commit substantial funds. A qualified challenger contests one undertaking in an otherwise procedurally proper case. Assume that the undertaking directly conflicts with an applicable constitutional prohibition and that the conflict cannot be reconciled through interpretation. The agency invokes statutory authorization, competitive bidding, and investor reliance. Which conclusion best resolves that defense?
- The undertaking remains binding because the statute authorized the promise.
- The undertaking prevails because it fixes obligations for twenty years.
- The undertaking becomes enforceable once the investors substantially perform.
- The undertaking cannot prevail because neither a statute nor a contract overrides the Constitution.
- The undertaking remains binding unless the bidding documents expressly incorporated the prohibition.
Legal references
- Manila Prince Hotel v. GSIS, G.R. No. 122156, February 3, 1997, main opinion: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/34508
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