CpE Laws and
Professional Practice
Lecture Series: No. 01
Electronic Commerce
(R.A. 8792 E-Commerce Act)
By: Atty. Jonathan S. Oche, MSEE
State Policy
The State recognizes:
1. The vital role of ICT in nation-building; the need to create an information-
friendly environment which supports and ensures the availability, diversity and
affordability of ICT products and services;
2. The primary responsibility of the private sector in contributing investments and
services in telecommunications and information technology;
3. The need to develop, with appropriate training programs and institutional policy
changes, human resources for the information technology age, a labor force
skilled in the use of ICT and a population capable of operating and utilizing
electronic appliances and computers;
State Policy
4. Its obligation to facilitate the transfer and promotion of adaptation technology,
to ensure network security, connectivity and neutrality of technology for the
national benefit; and
5. The need to marshal, organize and deploy national information infrastructures,
comprising in both telecommunications network and strategic information
services, including their interconnection to the global information networks,
with the necessary and appropriate legal, financial, diplomatic and technical
framework, systems and facilities.
State Objectives
1. To facilitate domestic and international dealings, transactions, arrangements,
agreements, contracts and exchanges and storage of information through the
utilization of electronic, optical and similar medium, mode, instrumentality and
technology ;
2. To recognize the authenticity and reliability of electronic documents related to
such activities; and
3. To promote the universal use of electronic transaction in the government and
general public.
Scope of Application
Applies to any kind of data message and electronic document used in the context
of commercial and non-commercial activities to include domestic and
international dealings, transactions, arrangements, agreements, contracts and
exchanges and storage of information.
Definition of Terms
1. Electronic Data Message - refers to information generated, sent, received or
stored by electronic, optical or similar means.
2. Electronic Signature - refers to
• any distinctive mark, characteristic and/or sound in electronic form,
• representing the identity of a person
• attached to or logically associated with the electronic data message or
electronic document or any methodology or procedures employed or
adopted by a person and executed or adopted by such person
• with the intention of authenticating or approving an electronic data
message or electronic document.
Definition of Terms
3. Electronic Document –
• refers to information or the representation of information, data, figures,
symbols or other modes of written expression, described or however
represented,
• by which
a right is established or
an obligation extinguished, or
by which a fact may be proved and affirmed,
• which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically.
Are electronic documents and data
messages legally recognized?
Yes.
Hence, information shall not be denied legal effect, validity or
enforceability solely on the grounds:
• that it is in the data message purporting to give rise to
such legal effect, or
• that it is merely referred to in that electronic data
message.
In terms of legal effect, validity and enforceability,
how do electronic documents compare
with other documents (e.g., paper, etc.)?
Electronic documents shall have the legal effect, validity or
enforceability as any other document or legal writing.
What are the rules in giving legal effect, validity or
enforceability to electronic documents?
1. Where the law requires a document to be in writing, that requirement is met by
an electronic document if the said electronic document maintains its integrity
and reliability and can be authenticated so as to be usable for subsequent
reference, in that –
• The electronic document has remained complete and unaltered, apart
from the addition of any endorsement and any authorized change, or
any change which arises in the normal course of communication,
storage and display; and
• The electronic document is reliable in the light of the purpose for
which it was generated and in the light of all the relevant
circumstances.
This applies whether the requirement therein is in the form of an obligation or
whether the law simply provides consequences for the document not being
presented or retained in its original form.
What are the rules in giving legal effect, validity or
enforceability to electronic documents?
2. Where the law requires that a document be presented or retained in its original
form, that requirement is met by an electronic document if –
• There exists a reliable assurance as to the integrity of the document from
the time when it was first generated in its final form; and
• That document is capable of being displayed to the person to whom it is to
be presented: Provided, That no provision of this Act shall apply to vary any
and all requirements of existing laws on formalities required in the
execution of documents for their validity.
3. For evidentiary purposes, an electronic document shall be the functional
equivalent of a written document under existing laws. Hence, in any legal
proceedings, an electronic data message or electronic document shall not be
denied admissibility in evidence on the sole ground that it is in electronic form.
Are electronic signatures legally recognized?
Yes.
An electronic signature on the electronic document shall be
equivalent to the signature of a person on a written document.
How are electronic signatures proved?
It must be shown that a prescribed procedure, not alterable by the parties
interested in the electronic document, existed under which –
• A method is used to identify the party sought to be bound and to indicate
said party’s access to the electronic document necessary for his consent or
approval through the electronic signature;
• Said method is reliable and appropriate for the purpose for which the
electronic document was generated or communicated, in the light of all the
circumstances, including any relevant agreement;
• It is necessary for the party sought to be bound, in order to proceed further
with the transaction, to have executed or provided the electronic signature;
and
• The other party is authorized and enabled to verify the electronic signature
and to make the decision to proceed with the transaction authenticated by
the same.
What are the presumptions relating to
electronic signatures?
In any proceedings involving an electronic signature, it shall be
presumed that –
• The electronic signature is the signature of the person to
whom it correlates; and
• The electronic signature was affixed by that person with
the intention of signing or approving the electronic
document unless the person relying on the electronically
signed electronic document knows or has notice of
defects in or unreliability of the signature or reliance on
the electronic signature is not reasonable under the
circumstances.
When are electronic data message or electronic
document equivalent to an original written document?
1. If it can be proved that the information retained its integrity
from the time when it was first generated in its final form as
an electronic data message or electronic document (i.e., it
has remained complete and unaltered, apart from the
addition of any endorsement and any change which arises in
the normal course of communication, storage and display);
and
2. Where it is required that information be presented, if its is
capable of being displayed to the person to whom it is to be
presented.
Are electronic contracts valid?
Yes.
Except as otherwise agreed by the parties, an offer, the
acceptance of an offer and such other elements required
under existing laws for the formation of contracts may be
expressed in, demonstrated and proved by means of
electronic data message or electronic documents.
Hence, no contract shall be denied validity or enforceability on
the sole ground that it is in the form of an electronic data
message or electronic document, or that any or all of the
elements required under existing laws for the formation of the
contracts is expressed, demonstrated and proved by means of
electronic documents.
Recognition by parties of electronic data message
or electronic document
As between the originator and the addressee of a electronic
data message or electronic document, a declaration of will or
other statement shall not be denied legal effect, validity or
enforceability solely on the ground that it is in the form of a
electronic data message.
What are the rules of attribution of
electronic data message?
1. An electronic data message or electronic document is that
of the originator if it was sent by the originator himself.
2. As between the originator and the addressee, an electronic
data message or electronic document is deemed to be that
of the originator if it was sent:
• by a person who had the authority to act on behalf
of the originator with respect to that electronic data
message or electronic document; or
• by an information system programmed by, or on
behalf of the originator to operate automatically.
What are the rules of attribution of
electronic data message?
3. As between the originator and the addressee, an addressee
is entitled to regard an electronic data message or
electronic document as being that of the originator, and to
act on that assumption, if:
• in order to ascertain whether the electronic data
message or electronic document was that of the
originator, the addressee properly applied a
procedure previously agreed to by the originator for
that purpose; or
What are the rules of attribution of
electronic data message?
• the electronic data message or electronic document
as received by the addressee resulted from the
actions of a person whose relationship with the
originator or with any agent of the originator
enabled that person to gain access to a method used
by the originator to identify electronic data
messages as his own.
What are the rules of attribution of
electronic data message?
4. However Rule #3 does not apply:
• as of the time when the addressee has both received
notice from the originator that the electronic data
message or electronic document is not that of the
originator, and has reasonable time to act accordingly;
or
• in a case within Rule #3, 2nd paragraph, at any time
when the addressee knew or should have known, had it
exercised reasonable care or used any agreed
procedure, that the electronic data message or
electronic document was not that of the originator.
What are the rules of attribution of
electronic data message?
5. Where an electronic data message or electronic document
is that of the originator or is deemed to be that of the
originator, or the addressee is entitled to act on that
assumption, then, as between the originator and the
addressee, the addressee is entitled to regard the
electronic data message or electronic document as
received as being what the originator intended to send,
and to act on that assumption. The addressee is not so
entitled when it knew or should have known, had it
exercised reasonable care or used any agreed procedure,
that the transmission resulted in any error in the electronic
data message or electronic document as received.
What are the rules of attribution of
electronic data message?
6. The addressee is entitled to regard each electronic data
message or electronic document received as a separate
electronic data message or electronic document and to act
on that assumption, except to the extent that it duplicates
another electronic data message or electronic document
and the addressee knew or should have known, had it
exercised reasonable care or used any agreed procedure,
that the electronic data message or electronic document
was a duplicate.
What are the rules pertaining to error on electronic
data message or electronic document?
The addressee is entitled to regard the electronic data message
or electronic document received as that which the originator
intended to send, and to act on that assumption, unless the
addressee knew or should have known, had the addressee
exercised reasonable care or used the appropriate procedure –
• That the transmission resulted in any error therein or in
the electronic document when the electronic data
message or electronic document enters the designated
information system; or
• That electronic data message or electronic document is
sent to an information system which is not so designated
by the addressee for the purpose.
What are the rules on acknowledgment of receipt of
electronic data message or electronic document?
The following rules shall apply where, on or before sending an
electronic data message or electronic document, the originator and
the addressee have agreed, or in that electronic document or
electronic data message, the originator has requested, that receipt
of the electronic document or electronic data message be
acknowledged:
1. Where the originator has not agreed with the addressee that
the acknowledgment be given in a particular form or by a
particular method, an acknowledgment may be given by or
through any communication by the addressee, automated or
otherwise, or any conduct of the addressee, sufficient to
indicate to the originator that the electronic data message or
electronic document has been received.
What are the rules on acknowledgment of receipt of
electronic data message or electronic document?
2. Where the originator has stated that the effect or significance
of the electronic data message or electronic document is
conditional on receipt of the acknowledgment thereof, the
electronic data message or electronic document is treated as
though it has never been sent, until the acknowledgment is
received.
What are the rules on acknowledgment of receipt of
electronic data message or electronic document?
3. Where the originator has not stated that the effect or
significance of the electronic data message or electronic
document is conditional on receipt of the acknowledgment,
and the acknowledgment has not been received by the
originator within the time specified or agreed or, if no time
has been specified or agreed, within a reasonable time, the
originator may give notice to the addressee stating that no
acknowledgment has been received and specifying a
reasonable time by which the acknowledgment must be
received; and if the acknowledgment is not received within
the time specified, the originator may, upon notice to the
addressee, treat the electronic document or electronic data
message as though it had never been sent, or exercise any
other rights it may have.
What is the rule on the time of dispatch of electronic
data message or electronic document?
Unless otherwise agreed between the originator and the
addressee, the dispatch of an electronic data message or
electronic document occurs when it enters an information
system outside the control of the originator or of the person
who sent the electronic data message or electronic
document on behalf of the originator.
What is the rule on the time of receipt of electronic
data message or electronic document?
Unless otherwise agreed between the originator and the
addressee, the time of receipt of an electronic data message or
electronic document is as follows:
1. If the addressee has designated an information system for
the purpose of receiving electronic data message or
electronic document, receipt occurs at the time when the
electronic data message or electronic document enters the
designated information system: Provided, however, that if
the originator and the addressee are both participants in
the designated information system, receipt occurs at the
time when the electronic data message or electronic
document is retrieved by the addressee.
What is the rule on the time of receipt of electronic
data message or electronic document?
2. If the electronic data message or electronic document is
sent to an information system of the addressee that is not
the designated information system, receipt occurs at the
time when the electronic data message or electronic
document is retrieved by the addressee.
3. If the addressee has not designated an information system,
receipt occurs when the electronic data message or
electronic document enters an information system of the
addressee.
What is the rule on the time of receipt of electronic
data message or electronic document?
4. These rules apply notwithstanding that the place where
the information system is located may be different from
the place where the electronic data message or electronic
document is deemed to be received.
What is the rule on the place of dispatch and receipt of
electronic data message or electronic document?
Unless otherwise agreed between the originator and the
addressee, an electronic data message or electronic document
is deemed to be dispatched at the place where the originator
has its place of business and received at the place where the
addressee has its place of business.
This rule shall apply even if the originator or addressee had
used a laptop or other portable device to transmit or receive
his electronic data message or electronic document.
What is the rule on the place of dispatch and receipt of
electronic data message or electronic document?
This rule shall also apply to determine the tax situs of such
transaction.
For the purpose hereof –
1. If the originator or the addressee has more than one place
of business, the place of business is that which has the
closest relationship to the underlying transaction or, where
there is no underlying transaction, the principal place of
business.
What is the rule on the place of dispatch and receipt of
electronic data message or electronic document?
2. If the originator of the addressee does not have a place of
business, reference is to be made to its habitual residence;
or
3. The “usual place of residence” in relation to a body
corporate, means the place where it is incorporated or
otherwise legally constituted.
End of
lecture,
thank you.
