ACYRFBT: E-Commerce Act - RA 8792

E-Commerce Act

Aims to:

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 data messages or electronic documents related to such activities.

3. to promote the universal use of electronic transactions in the government and by the general public.

Sphere of Application

The Act shall apply to any kind of 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.

Computer

Refers to any device or apparatus singly or interconnected which, by electronic, electro-mechanical, optical and/or magnetic impulse, or other means with the same function, can receive, record, transmit, store, process, correlate, analyze, projects, retrieve, and/or produce information, data, text, graphics, figures, voice, video, symbols or other modes of expression or perform any one or more of these functions.

Information and Communications System

Refers to a system for generating, sending, receiving, storing, or otherwise processing electronic documents and includes the computer system or other similar device by or in which data is recorded or stored and any procedures related to the recording or storage of electronic document.

Originator

Refers to a person by whom, or on whose behalf, the electronic document purports to have been created, generated and/or sent. The term does not include a person acting as an intermediary with respect to that electronic document.

Addressee

Refers to a person who is intended by the originator to receive the electronic data message or electronic document, but does not include a person acting as an intermediary with respect to that electronic data message or electronic data document.

Intermediary

Refers to a person who in behalf of another person and with respect to a particular electronic document sends, receives and/or stores, provides other services in respect of that electronic data message or electronic document.

Service Provider

Refers to a provider of:

1. Online services or network access or the operator of facilities therefor including entities offering the transmission, routing, or providing of connections for online communications, digital or otherwise, between or among points specified by a user, of electronic documents of the user's choosing; or

2. The necessary technical means by which electronic documents of an originator may be stored and made accessible to designated or undesignated third party.

Service Provider

Such service providers shall:

a. Have no authority to:

i. modify or alter the content of the electronic document received or

ii. to make any entry therein on behalf of the originator, addressee or any third party unless specifically authorized to do so,

b. Retain the electronic document in accordance with the specific request or as necessary for the purpose of performing the services it was engaged to perform.

Electronic Data Message

Refers to information generated, sent, received or stored by electronic, optical or similar means.

Electronic Signature

Refers to any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and 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.

Electronic Key

Refers to a secret code which secures and defends sensitive information that crossover public channels into a form decipherable only with a matching electronic key.

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.

Legal Recognition of Electronic Data Messages

The principle that states that Information shall not be denied validity or enforceability solely on the ground that it is in the form of electronic data message purporting to give rise to such legal effect, or that it is merely incorporated by reference in that electronic data message.

Legal Recognition of Electronic Documents

The principle that states that electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and:

a. Where the law requires a document to be in writing, that requirement is met by an electronic document if the said electronic document:

i. maintains its integrity and reliability and

ii. can be authenticated so as to be usable for subsequent reference, in that:

(1) 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

(2) The electronic document is reliable in the light of the purpose for which it was generated and in the light of all relevant circumstances.

Legal Recognition of Electronic Documents

The principle that states that electric documents shall have the legal effect, validity or enforceability as any other document or legal writing, and:

b. Paragraph (a) applies whether the requirement therein is in the from of an obligation or whether the law simply provides consequences for the document not being presented or retained in its original from.

Legal Recognition of Electronic Documents

The principle that states that electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and:

c. Where the law requires that a document be presented or retained in its original form, that requirement is met by an electronic document if-

i. 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

ii. That document is capable of being displayed to the person to whom it is to be presented: Provided, That no provision of the Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.

True

(True or False) For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.

True

(True or False) The Act does not modify any statutory rule relating to admissibility of electronic data massages or electronic documents, except the rules relating to authentication and best evidence.

Legal Recognition of Electronic Signatures

The principle that states that an electronic signature on the electronic document shall be equivalent to the signature of a person on a WRITTEN DOCUMENT if:

a. the signature is an electronic signature and

Legal Recognition of Electronic Signatures

The principle that states that an electronic signature on the electronic document shall be equivalent to the signature of a person on a WRITTEN DOCUMENT if:

b. proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which-

i. 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;

ii. Said method is reliable and appropriate for the purpose for which the electronic document was generated or communicated, in the light of all circumstances, including any relevant agreement;

iii. 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

iv. The other party is authorized and enable to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same.

Presumption Relating to Electronic Signatures

In any proceedings involving an electronic signature, it shall be presumed that:

a. The electronic signature is the signature of the person to whom it correlates; and

Presumption Relating to Electronic Signatures

In any proceedings involving an electronic signature, it shall be presumed that:

b. The electronic signature was affixed by that person with the intention of signing or approving the electronic document unless

i. the person relying on the electronically designed electronic document knows or has notice of defects in or unreliability of the signature or

ii. reliance on the electronic signature is not reasonable under the circumstances.

True

(True or False) The electronic signature is affixed by the person with the intention of signing or approving the electronic document, unless the person relying on the electronically designed electronic document knows or has notice of defects in or unreliability of the signature or the reliance on the electronic signature is not reasonable under the circumstances.

Original Documents

1. Where the law requires information to be presented or retained in its ORIGINAL FORM, that requirement is met by an electronic data message or electronic document if:

a. the integrity of the information from the time when it was first generated in its final form, as an electronic document is shown by evidence aliunde or otherwise; and

b. where otherwise it is required that information be presented, that the information is capable of being displayed to the person to whom it is to be presented.

Original Documents

2. For the purpose of subparagraph (a) of paragraph (1):

a. the criteria for assessing integrity shall be whether the information 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

b. the standard of reliability required shall be assessed in the light of purpose for which the information was generated and in the light of all the relevant circumstances.

Authentication of Electronic Data Messages and Electronic Documents

Until the Supreme Court by appropriate rules shall have so provided, electronic documents, electronic data messages and electronic signatures, shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user, device, or another entity is an information or communication system, among other ways, as follows:

a. The electronic signatures shall be authenticated by proof that a letter, character, number or other symbol in electronic form representing the persons named in and attached to or logically associated with an electronic data message, electronic document, or that the appropriate methodology or security procedures, when applicable, were employed or adopted by such person, with the intention of authenticating or approving in an electronic data message or electronic document;

Authentication of Electronic Data Messages and Electronic Documents

Until the Supreme Court by appropriate rules shall have so provided, electronic documents, electronic data messages and electronic signatures, shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user, device, or another entity is an information or communication system, among other ways, as follows:

b. The electronic data message or electronic document shall be authenticated by proof that an appropriate security procedure, when applicable was adopted and employed for the purpose of:

i. verifying the originator of an electronic data message or electronic document, or

ii. detecting error or alteration in the communication, content or storage of an electronic document or electronic data message from a specific point, which, using algorithms or codes, identifying words or numbers, encryptions, answers back or acknowledgement procedures, or similar security devices.

Supreme Court

The court that may adopt such other authentication procedures, including the use of electronic notarization systems as necessary and advisable, as well as the certificate of authentication on printed or hard copies of the electronic documents or electronic data messages by electronic notaries, service providers and other duly recognized or appointed certification authorities.

True

(True or False) The person seeking to introduce an electronic data message or electronic document in any legal proceeding has the burden of proving its authenticity by evidence capable of supporting a finding that the electronic data message or electronic document is what the person claims it on be.

Integrity of the Information and Communication System

The integrity of the information and communication system in which an electronic data message or electronic document is recorded or stored may be established in any legal proceeding:

a. By evidence that:

i. at all material times the information and communication system or other similar device was operating in a manner that did not affect the integrity of the electronic data message or electronic document, and

ii. there are no other reasonable grounds to doubt the integrity of the information and communication system,

Integrity of the Information and Communication System

The integrity of the information and communication system in which an electronic data message or electronic document is recorded or stored may be established in any legal proceeding:

b. By showing that the electronic data message or electronic document was recorded or stored by a party to the proceedings who is adverse in interest to the party using it; or

Integrity of the Information and Communication System

The integrity of the information and communication system in which an electronic data message or electronic document is recorded or stored may be established in any legal proceeding:

c. By showing that the electronic data message or electronic document was recorded or stored in the usual and ordinary course of business by a person who is not a party to the proceedings and who did not act under the control of the party using the record

Admissibility and Evidential Weight of Electronic Data Message or Electronic Document

In any legal proceedings, nothing in the application of the rules on evidence shall deny the admissibility of an electronic data message or electronic document in evidence:

a. On the sole ground that it is in electronic form; or

b. On the ground that it is not in the standard written form, and the electronic data message or electronic document meeting, and complying with the requirements under Legal Recognition of Electronic Data Messages and Electronic Documents mentioned above, shall be the best evidence of the agreement and transaction contained therein.

Assessment of the Evidential Weight of an Electronic Data Message or Electronic Document

In assessing the evidential weight of an electronic data message or electronic document, the following shall be given due regard:

a. the reliability of the manner in which it was generated, stored or communicated,

b. the reliability of the manner in which its originator was identified, and

c. other relevant factors.

Retention of Electronic Data Message or Electronic Document

Notwithstanding any provision of law, rule or regulation to the contrary:

a. The requirement in any provision of law that certain documents be retained in their original form is satisfied by retaining them in the form of an electronic data message or electronic document which -

i. Remains accessible so as to be usable for subsequent reference;

ii. Is retained in the format in which it was generated, sent or received, or in a format which can be demonstrated to accurately represent the electronic data message or electronic document generated, sent or received;

iii. Enables the identification of its originator and addressee, as well as the determination of the date and the time it was sent or received.

True

(True or False) The matters referred on admissibility and on the presumption of integrity, may be presumed to have been established by an affidavit given to the best of the deponent's knowledge subject to the rights of parties in interest as defined in the cross-examination provided.

Deponent of an Affidavit

The party that may be cross-examined as of right by a party to the proceedings who is adverse in interest to the party who has introduced the affidavit or has caused the affidavit to be introduced.

True

(True or False) Any party to the proceedings has the right to cross-examine a person who is not a party to the proceedings and who did not act under the control of the party using the record proving that the electronic data message or electronic document was recorded or stored in the usual and ordinary course of business.

Formation of Validity of Electronic Contracts

1. Except as otherwise agreed by the parties, (1) an offer, (2) the acceptance of an offer and (3) such other elements required under existing laws for the formation of contracts may be expressed in, demonstrated and proved by means of electronic data messages or electronic documents and 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 contracts is expressed, demonstrated and proved by means of electronic data messages or electronic documents.

Formation of Validity of Electronic Contracts:

2. Electronic transactions made through networking among banks, or linkages thereof with other entities or networks, and vice versa:

a. shall be deemed consummated upon the actual dispensing of cash or the debit of one account and the corresponding credit to another, whether such transaction is initiated by the depositor or by an authorized collecting party.

b. The obligation of one bank, entity, or person similarly situated to another arising therefrom shall be considered absolute and shall not be subjected to the process of preference of credits.

Recognition by Parties of Electronic Data Message or Electronic Document

As between the originator and the addressee of an 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 an electronic data message or electronic document.

Electronic Data Message or Electronic Document is that of the Originator

Such happens if:

a. The electronic data message or electronic document was sent by the originator himself.

Electronic Data Message or Electronic Document is that of the Originator

Such happens if:

b. 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:

i. 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

ii. by an information system programmed by, or on behalf of the originator to operate automatically.

Attribution of Electronic Data Message

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:

a. 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

b. 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 message or electronic documents as his own.

Attribution of Electronic Data Message

The attribution does not apply:

i. 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

ii. in a case within paragraph (2) sub-paragraph (b), at any time when the addressee knew or should have known, had it exercised reasonable care of used any agreed procedure, that the electronic data message or electronic document was not that of the originator.

iii. That the transmission resulted in any error in the electronic data message or electronic document as received.

Attribution of Electronic Data Message

3. 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:

a. To the extent that it duplicates another electronic data message or electronic document and

b. 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

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 -

a. That the transmission resulted in any error therein or in the electronic data message or electronic document enters the designated information system, or

b. That electronic data message or electronic document is sent to an information system which is not so designated by the addressee for the purposes.

Acknowledgement of Receipt of Electronic Data Message or Electronic Document

General rule: It is not necessary.

Exceptions:

a. If the parties agree to it.

b. The originator requested in the electronic data message or electronic document.

Modes of Acknowledgement

Shall be followed, if required:

a. Agreement as to particular method - to be followed

b. No agreement as to particular method:

a. Any communication by the addressee

b. Any conduct of the addressee sufficient to indicate the receipt to the originator

Instances When the Originator can Regard Non-Receipt of Acknowledgement

These instances include:

a. When the originator stated the effect or significance of acknowledgment or the Electronic Document is CONDITIONAL upon receipt.

b. No statement as to effect/significance - originator gave notice stating that no acknowledgement has been received and specifying a reasonable time by which acknowledgement is to be received, and no acknowledgement is received within such reasonable time.

Time of Dispatch of Electronic Data Messages or Electronic Documents

General rule: 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.

Exception: When otherwise agreed upon.

Time or Receipt of Electronic Data Messages or Electronic Documents

Unless otherwise agreed between the originator and the addressee, the time of receipt of an electronic data message or electronic document is as follows:

a. Upon entry in the designated information system - if the parties has designated an information system for the purpose of receiving electronic data messages or electronic documents

b. Upon retrieval by the addressee:

i. There is a designated information system, but the originator and the addressee are both participants in the designated information system;

ii. The electronic message or electronic document enters an information system of the addressee that is not the designated information system;

c. Upon entry in the information system of the addressee - The parties did not designate an information system.

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.

Place of Dispatch and Receipt of Electronic Data Messages or Electronic Documents

Unless otherwise agreed between the originator and the addressee, an electronic data message or electronic document is deemed to be:

1. dispatched at the place where the originator has its place of business and

2. 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 other portable device to transmit or receive his electronic data message or electronic document. These rules shall also apply to determine the tax situs of such transaction.

True

(True or False) The electronic data message or electric 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.

Originator or Addressee Has More than One Place of Business

The place of dispatch/receipt of electronic data message or electronic document, is the place which has the closest relationship to the underlying transaction or, where there is no underlying transaction, the principal place of business.

Originator or Addressee Does Not Have a Place of Business

The place of dispatch/receipt of electronic data message or electronic document, is made reference to the habitual residence of either the originator or addressee.

Originator or Addressee is a Corporate Body

The place of dispatch/receipt of electronic data message or electronic document, is the place where such originator or addressee is incorporated or otherwise legally constituted.

Choice of Security Methods

Subject to applicable laws and /or rules and guidelines promulgated by the DTI with other appropriate government agencies, parties to any electronic transaction shall be free to:

1. Determine the type of level of electronic data message or electronic document security needed, and

2. To select and use or implement appropriate technological methods that suit their need.

Actions Related to Contracts of Carriage of Goods

Applies to any action in connection with, or in pursuance of, a contract of carriage of goods, including but not limited to:

a. (i) furnishing the marks, number, quantity or weight of goods;

(ii) stating or declaring the nature or value of goods;

(iii) issuing a receipt for goods;

(iv) confirming that goods have been loaded;

b. (i) notifying a person of terms and conditions of the contract;

(ii) giving instructions to a carrier;

c. (i) claiming delivery of goods;

(ii) authorizing release of goods;

(iii) giving notice of loss of, or damage to goods;

d. giving any other notice or statement in connection with the performance of the contract;

e. undertaking to deliver goods to a named person or a person authorized to claim delivery;

f. granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;

g. acquiring or transferring rights and obligations under the contract.

Transport Documents

a. Where the law requires that any action referred to contract of carriage of goods be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more electronic data messages or electronic documents.

b. If (a) a right is to be granted to, or (b) an obligation is to be acquired by, one person and no person, and if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer, or use of, a paper document, that requirement is met if the right or obligation is conveyed by using one or more electronic data messages or electronic documents: Provided, that a reliable method is used to render such electronic data messages or electronic documents unique.

c. Where one or more electronic data messages or electronic documents are used to effect any action in subparagraph (f) and (g) of the above (Actions Related to Contracts of Carriage of Goods), no paper document used to effect any such action is valid unless the use of electronic data message or electronic document has been terminated and replaced by the used of paper documents. A paper document issued in these circumstances shall contain a statement of such termination. The replacement of the electronic data messages or electronic documents by paper documents shall not affect the rights or obligation of the parties involved.

d. If a rule of law is compulsorily applicable to a contract of carriage of goods which is in, or is evidenced by, a paper document, that rule shall not be inapplicable to such a contract of carriage of goods which is evidenced by one or more electronic data messages or electronic documents by reason of the fact that the contract is evidenced by such electronic data message or electronic documents instead of by a paper document.

Government Use of Electronic Data Messages, Electronic Documents and Electronic Signature

Within two (2) years from the date of the effectivity of the Act, all departments, bureaus, offices and agencies of the government, as well as all government-owned and -controlled corporations, that pursuant to law require or accept the filing of documents, require that documents be created, or retained and/or submitted, issue permits, licenses or certificates of registration or approval, or provide for the method and manner of payment or settlement of fees and other obligations to the government, shall:

a. accept the creation, filing or retention of such documents in the form of electronic data messages or electronic documents;

b. issue permits, licenses, or approval in the form of electronic data messages or electronic documents;

c. require and/or accept payments, and issue receipt acknowledging such payments, through systems using electronic data messages or electronic documents; or

d. transact the government business and/or perform governmental factions using electronic data messages or electronic documents, and for the purpose, are authorized to adopt and promulgate, after appropriate public hearing and with due publications in newspapers of general circulation, the appropriate rules, regulations, or guidelines.

Extent of Liability of a Service Provider

General rule: No person or party shall be subject to any civil or criminal liability in respect of the electronic data message or electronic document for which the person or party acting as a service provider, merely provides access if such liability is founded on.

Including: The making, publication, dissemination, or distribution of such material or any statement made in such material, including possible infringement of any right subsisting in or in relation to such material. Provided that:

a. The service provider does not have actual knowledge, or is not aware of the facts or circumstances from which it is apparent, that the making, publication, dissemination or distribution of each material is unlawful or infringes any rights subsisting in or in relation to such material.

b. The service provider does not knowingly receive a financial benefit directly attributable to the unlawful or infringing activity.

c. The service provider does not directly commit any infringement or other unlawful act and does not cause another person or party to commit any infringement or other unlawful act and/or does not benefit financially from the infringing activity or unlawful act or another person or party.

Extent of Liability of a Service Provider

Exceptions:

a. The obligations and liabilities of the parties under the electronic data message or electronic document.

b. Any obligation founded on the contract.

c. The obligation of a service provider as such under a licensing or other regulatory regime is established under written law.

d. Any obligation imposed under any written law.

e. The civil liability of any party to the extent that such liability forms the basis for injunctive relief issued by a court under any law requiring that the service provider take or refrain from action necessary to remove, block or deny access to any material, or to preserve evidence of a violation of law.

Lawful Access

Access to an electronic file, or an electronic signature of an electronic data or message or electronic document shall only be authorized and enforced in favor of the individual or entity having a legal right to the possession or the use of plaintext, electronic signature or file or solely for the authorized purposes. The electronic key for identity or integrity shall not be made available to any person or party without the consent of the individual or entity in lawful possession of that electronic key.

Obligation of Confidentiality

States that, except for the purposes authorized under the E-Commerce Act, any person who obtained access to any electronic key, electronic data message, or electronic document, book, register, correspondence, information, or other material pursuant to any powers, shall not convey to or share the same with any other person.

Hacking or Cracking

Unauthorized access into or interference in a computer system/server or information and communications system; or any access in order to corrupt, alter, steal, or destroy using a computer or other similar information and communication devices, without the knowledge and consent of the owner of the computer or information and communications system, including the introduction of computer viruses and the like, resulting in the corruption, destruction, alteration, theft or loss of electronic data messages or electronic documents.

Minimum of P100,000 and Maximum - Damage Incurred

The fine to be imposed upon hacking or cracking.

Six (6) Months to Three (3) Years

The number of years of imprisonment for hacking or cracking.

Piracy

The unauthorized copying, reproduction, dissemination, or distribution, importation, use, removal, substitution, modification, storage,

alteration, uploading, works downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted including legally protected sound recording or phonograms or information material on protected works, through the use telecommunication networks,

of such as, but not limited to, the

internet, in a manner that infringes intellectual property rights

Minimum of P100,000 and Maximum - Damage Incurred

The fine imposed on piracy.

Six (6) Months to Three (3) Years

The number of years for imprisonment for piracy.

Minimum of P100,000 and Maximum - Damage Incurred

The fine imposed on the violation of the E-Commerce Act.

Six (6) Months to Three (3) Years

The number of years for imprisonment for the Violation of the E-Commerce Act.

Maximum of P1,000,000

The fine for the other violations of the provisions of the E-Commerce Act.

Statutory Interpretation

Unless otherwise expressly provided for, the interpretation of the E-Commerce Act shall give due regard to:

a. Its international origin.

b. The need to promote uniformity in its application and the observance of good faith in international trade relations.