No, that is the ruleS. Two of them. In direct contradiction. One of them only applied to a single word. It is not the "contraction rule" or the "possessive rule," but the "it's/its" rule. Far worse, it exists, not to make the language richer, more versatile or, heaven forbid, easier to understand, but because... well, because someone said we should ignore the rule we observe in ALL OTHER CASES, and other people, for reasons known but to them and God, accepted that decision.