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RA 8792 Highlights, Notes, and Presentation Preparation

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REPUBLIC ACT NO. 8792 June 14, 2000

Electronic Commerce Act (Highlights)

An act providing for the recognition and use of electronic commercial and non-commercial transactions, penalties for unlawful use thereof, and other purposes

Context

To make information and communications technology prevalent and accessible to everyone:

  • To promote ICT products to the point that everyone leverages it for their own and the nation’s benefit
  • To develop a communication network and provide information services that solidifies our national information infrastructure

In other words, modernize our traditional approach to information to adapt to the information age.

Objective

  • To promote and make digital/electronic transactions to the government and general public
  • To recognize the reliability and validity of using electronic/digital data and documents in domestic and international, commercial and non-commercial, contracts, transactions, deals, and etc.

Terminologies (Direct Copied)

(a) “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 document.

(b) “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, project, 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.

(c) “Electronic data message” refers to information generated, sent, received or stored by electronic, optical or similar means.

(d) “Information and Communication System” refers to a system for generating, sending, receiving, storing or otherwise processing electronic data messages or 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 data message or electronic document.

(e) “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.

(f) “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.

(g) “Electronic key” refers to a secret code which secures and defends sensitive information that crosses over public channels into a form decipherable only with a matching electronic key.

(h) “Intermediary” refers to a person who in behalf of another person and with respect to a particular electronic data message or electronic document sends, receives and/or stores or provides other services in respect of that electronic data message or electronic document.

(i) “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.

Acknowledgement of the Validity of Electronic Message and Documents

  1. Information coming from these sources of information are legally valid (e.g., can be used as evidence in court or as an obligation to be provided):
    1. electronic message
    2. unaltered electronic documents
      1. the document should also be viewable to who it is being presented to and it still follows formalities required for document to be valid (like notarization)1
    3. This act only pertains to the best evidence and authenticity of electronic documents and messages:
      1. Therefore, it doesn’t affect admissibility of evidence. Judge can still deny the evidence for reasons such as:
        1. It’s a private conversation between lawyer and client
        2. It’s hearsay/gossip
        3. It’s irrelevant
      2. This also means that digital documents, as long as its authenticity and integrity are verified, can satisfy the best evidence rule, that is, it can count as the original document evidence (and not merely a copy)
    4. As long as it’s been done the proper way, electronic signatures is equivalent to physical signatures. This assumes the following
      1. there is a method to identify the signer and shows that they can see the document they will sign and be bounded to
      2. the signer signed it and the other party can verify it
        1. integrity is assessed through completeness and unalteration
      3. If person offering the contract to be signed notices a defect/unreliability, electronic signature is invalid
  2. Electronic data and documents provided are authenticated through the following ways:2
    1. an validated electronic signature (or any security procedures intended for authentication) is tied with their electronic message/document
    2. appropriate security procedures were employed to authenticate the electronic data/document and verify the sender
    3. anyone introducing electronic data/document is burdened with proving its authenticity. If they lack evidence, they must show that:
      1. the storage used for the information was not operating in a way that negatively affects the integrity of the electronic data
      2. the data was stored by an unbiased party
  3. it should not be denied on the basis of it being electronic form
  4. the requirement to retain the original form of the electronic data is satisfied when:
    1. it is still accessible for later use
    2. it keeps its original format and can still be represented accurately later
    3. the time it was sent, received, and the people who sent and received it are still identifiable
  5. its authenticity can be validated through a sworn statement (affidavit) by the deponent (person who made the statement). Court assumes it will be valid once affidavit is submitted without an computer expert to validate it, unless challenged
  6. adverse party can challenge/cross-examine the affidavilt3

Communication of Electronic Data Messages or Electronic Documents

  1. Offers expressed through electronic means (e.g., contracts formed using electronic documents/messages) are valid and cannot be denied on the grounds that they are electronically expressed4
  2. Electronic transactions involving the debit of cash (money taken out), credit of cash (money taken in) is finalized regardless of the initiator. It assumes that the bank is legally obligated to perform their duties and not be subject to the process of preference of credits
  3. declaring will or other statements cannot be denied due to just it being of the electronic form
  4. You are only deemed as the source of an electronic data or message if you are the sender5
    1. This counts if they were approved to act on behalf of originator with respect to the message. Your are liable to your proxy’s actions
    2. also for an information system acting on their behalf
    3. (4) doesn’t count if receiver receives notice and understands that the sender disapproves of their proxy’s electronic message/document/signature. if receiver knew or should’ve known that it wasn’t the sender’s message, (4) also doesn’t count.
      1. the receiver should in good faith and with care that the origin of the message was actually from the receiver
    4. If the receiver notices red flags or was informed later that there was a mistake in the message, they can’t treat the message as the original message of the sender.6If they also ignored any verification procedure indicating that there was something wrong with the message, they are not entitled.
  5. multiple electronic messages/documents are counted as separate, unless they are verified to be duplicates
  6. errors in the electronic message/document involving an information system makes the receiver lose the entitlement to call the received message/document as the sender’s. they had the responsibility to verify that7
  7. if both parties (sender/receiver) agree that an acknowledgement of receipt of electronic data/message, the following rules apply:8
    1. If the sender hasn’t agreed that the receiver has not yet acknowledged the message/document sent, the receiver can sent an acknowledgement that it has been received; otherwise, it wouldn’t count as if the sender knew that the receiver received their message
    2. it would be valid for the sender to make an agreement that a message hasn’t been sent unless it’s been acknowledged.
    3. if a time period was agreed expecting an acknowledgement from receiver, and the receiver doesn’t acknowledge the message; the sender has the right to consider their sent message as not being sent
  8. 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 originator910 or of the person who sent the electronic data message or electronic document on behalf of the originator.
  9. If the addressee has designated an information system for the purpose of receiving electronic data messages or electronic documents, receipt occurs at the time when the electronic data message or electronic document enters the designated information system:11 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.12
    1. 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 addressee13
    2. 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.
  10. Regardless of the physical location of my sending device and your receiving device, my sending address for the electronic data is at my business address, and your receiving address is at your business address and not the physical location of where your device receiving the message is. This is so that the rules of another place don’t apply, only your business address’s place apply
    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.
    2. If the originator or 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.
  11. you can choose your own security method for your electronic data, provided that it is subject to the laws and guidelines promulgated by the Department of Trade and Industry

Electronic Commerce in Carriage of Goods

Section 26:14 If the law requires you use paper documents to carry out actions in section 25, you are still allowed to use electronic documents or messages

Qualifiers:

  1. if right/obligation is given to only one person and law requires that right/obligation is given to them using paper, that requirement is met if they use electronic means as long as its unique (kind of like a special right/obligation)
  2. Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of Section 25, 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.15 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.

Rule of law applicable to carriage of goods actions involving paper documents and messages is also applicable to electronic ones

Electronic Transactions in Government

Section 27. Government Use of Electronic Data Messages, Electronic Documents and Electronic Signatures. Notwithstanding any law to the contrary, within two (2) years from the date of the effectivity of this 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 filling 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, shall16

Section 28. RPWEB To Promote the Use of Electronic Documents or Electronic Data Messages In Government and to the General Public.* - Within two (2) years from the effectivity of this Act,17 there shall be installed an electronic online network in accordance with Administrative Order 332 and House of Representatives Resolution 890, otherwise known as RPWEB, to implement Part IV of this Act to facilitate the open, speedy and efficient electronic online transmission, conveyance and use of electronic data messages or electronic documents amongst all government departments, agencies, bureaus, offices down to the division level and to the regional and provincial offices as practicable as possible, government owned and controlled corporations, local government units, other public instrumentalities, universities, colleges and other schools, and universal access to the general public.

Section 29. Authority of the Department of Trade and Industry and Participating Entities. - The Department of Trade and Industry (DTI) shall direct supervise the promotion and development of electronic commerce in the country with relevant government agencies

Final Provisions

Section 30: The service provider is not liable if they have no knowledge of the crime happening, they do not benefit from illegal activity, they are not directly responsible for it

Section 31: The e-sig is only for the individual to authorize documents. You cant use it if the owner is not consenting to it. Only they can use the e-key, e-sig, etc.

Section 32: If you’ve been shared confidential electronic stuff, just share it to those who they were expected to be shown. Don’t show it to unrelated parties

Section 33: You can be fined or imprisoned for the following:

  1. hacking or gaining unauthorized access to perform malicious acts without the consent of the owner of info.
  2. piracy
  3. Violations of the Consumer Act of Republic Act No. 7394 and other relevant to pertinent laws through transaction covered by or using electronic data messages or electronic documents, shall be penalized with the same penalties as provided in those laws;
  4. Other violations of the provisions of this Act, shall be penalized with a maximum penalty of one million pesos (P 1,000,000.00) or six (6) years imprisonment.

Section 35 is irrelevant since the first three years since this act has been effective is over

Section 37: its based on an international origin and therefore should adhere to its uniform application and accepted principles and conventions

Section 38: any provision of this Act may be varied by agreement between and among the parties involved in processing electronic data.

Section 39: any benefits in this act only applies to parties whose country of origin grants the same benefits to Filipino citizens

Section 40: The provisions of this Act are hereby declared separable and in the event of any such provision is declared unconstitutional, the other provisions, which are not affected, shall remain in force and effect.

Section 41: All other laws, decrees, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

MCC INDUSTRIAL SALES CORPORATION, PETITIONER, VS. SSANGYONG CORPORATION, RESPONDENT.

Web Clipped w/ Highlights: G.R. No. 170633

Court & Legal Jargon

  • Supreme court - has administrative supervision over all courts and court personnel. (Article VIII, §6) It exercises this power through the Office of the Court Administrator.
  • Court of Appeals - second highest tribunal in the country, the supreme court can
  • review on certiorari - higher court asks lower court for records of a case for them to review
  • A civil action is a noncriminal lawsuit initiated by an individual, business, or entity against another to resolve a private dispute or seek compensation
  • A demurrer to evidence is a legal motion to dismiss a case filed after the opposing side rests their case. It argues that the evidence presented is legally insufficient to establish a right to relief or sustain a guilty verdict
  • Plaintiff the one who files lawsuit in a civil case
  • Admissibility refers to the legal rules and principles that determine whether evidence or a claim is acceptable in a court of law.
  • The Best Evidence Rule is a legal principle stating that the original of any written document, recording, or photograph must be presented in court to prove its content

Business Jargon

  • A proforma invoice is a preliminary, good-faith estimate of a sale sent by a seller to a buyer before the delivery of goods or services
  • L/C (Letter of Credit) is a financial document issued by a bank that guarantees a seller will receive payment in full, provided the delivery and shipping conditions specified in the agreement are met

Who?

  • MCC (MCC Industrial Sales Corporation) is a stainless-steel products wholesaler and Binondo, Manila-based importer
    • Gregory Chan - MCC Manager and President of Sanyo Seiki’s Stainless Steel Corporation
  • Ssangyong is an international trading company from South Korea that supplies stainless steel to MCC
  • POSCO (Pohang Iron and Steel Corporation) is the manufacturer in Korea Ssangyong bought the stainless steel from

Important Dates/Timeline

  1. ==April 13, 2000 - order confirmation of 220 MT worth of steel==
  2. April 17 2000 - Ssangyong sends invoice containing the terms and conditions of transaction. MCC pays using L/C
    1. Ssangyong buys the order for MCC from POSCO
  3. April 20 2000 - Ssangyong informs Chan that the ~200 MT of stainless steel is ready for shipping. Chan signs document with fax to respond to the L/C opening request
  4. June 22 2000 - Ssangyong informs Chan and Sanyo Seiki that they were able to make the price 30 USD less and also changes to shipping
    1. Shipping is split to two tranches: 1) same day and 2) not later than June 27 2000
    2. They reiterate their request for the L/C opening
  5. June 26 2000 - Ssangyong requests for L/C details from Sanyo Seiki and sets deadline for opening L/C to June 28 2000
  6. June 28 2000 - Ssangyong sends a letter to MCC saying that they are in a difficult situation due to them not opening the L/Cs
  7. June 29 2000 - MCC asks Ssangyon to wait since they ran out of credit line. Ssangyon was having financial issues due to delayed opening of L/C. They ask MCC how soon they can pay them back
  8. June 30 2000 - letter hints that Ssangyon was asking for a 20 USD discount from POSCO for MCC
  9. July 6 2000 - another follow up of opening L/C by Ssangyon
  10. Aug 15 2000 - Ssangyon warns MCC & Sanyo Seiki that failure to open L/C will force them to cancel the contract and hold MCC liable for damages amounting to ~100k USD of warehouse expenses
  11. Aug 16 2000 - announcement of adjustments by Ssangyon to order price (100 MT per invoice), thereby reducing price to 1700 USD per MT
  12. Aug 17 2000 - ==MCC FINALLY opens an L/C and pays for 100MT of stainless steel==
  13. Aug 22 2000 - MCC asks for discount because the prevailing price for steel at the time order was made (Aug 16) was 1500 USD per MT
    1. They argue that this lost them a lot of money due to a recent strike
  14. Aug 23 2000 - Sangyong rejects the request and demands them to open the other L/C of 170k USD
    1. If it is not opened by Aug 26, Ssangyong cancels the contract and holds MCC liable for 64k USD
  15. Sep 11 2000 - Ssangyong cancels the contract/orders and demands payment of 98k for losses
  16. November 16 2001 - Ssangyon files a civil action lawsuit against MCC and Sanyo Seiki before the regional trial court (RTC) at Makati City
    1. They allege a breach of contract when the defendants (MCC & Seiki) failed to open the L/C of 170k for the remaining invoice
    2. The defendants filed a demurrer to Evidence (dismiss case due to insufficient evidence), claiming that the civil action was based on a non-original copy of the pro forma invoice (underpinned by electronic copies)
  17. April 24 2003 - Court denies defendants demurer
  18. December 16 2002 - The admissability of evidence (invoice) was supported by RA 8792
  19. March 24 2004 - RTC renders decision in favor of Ssangyong
    1. Trial rules that contract regarding 186k USD was already perfect
    2. Sanyo Seiki is excluded from liability for lack of competent evidence
    3. MCC & Chan has to pay plaintiff:
      1. damages of 93k USD w/ 6% interest rate per annum from March 30 2001
      2. Attorney’s fees sum of 50k + 2k per counsel’s appearancei n court
      3. Cost of suit
  20. April 22 2004 - filed their Notice of Appeal
  21. March 9 2005 - MCC and Chan raised before the CA errors of the RTC
  22. August 31 2005 - CA affirms RTC decisions but absolves Chan of liability
  23. Oct 4 2005 - MCC files a motion of reconsideration for CA’s decision. Ssangyong opposes it, claiming that it has become final considering that MCC failed to file said motion within reglementary period (15 days)
  24. Nov 25 2005 - The motion was denied without ruling on the procedural issue raised
    1. Aggrieved, MCC filed a petition for review on certiorari[56] before this Court, imputing the following errors to the Court of Appeals:

E-Commerce Act

Game

This focuses on Electronic Data Messages and how the law protects the “originality” of digital info.

  • The Setup: A high-speed game of “Digital Telephone.”
  • The Goal: The “Receiver” at the end must compare their data to the “Sender.”
  • Message: heard that the prevailing price for titanium was 500 pesos per metric ton. Because of that, I’m demanding that you pay for my company’s loss. I want to cancel the contract and will not respond to your invoice.

Relevant Sections

Validating

  • Section 6. Legal Recognition of Electronic Data Messages - 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.
  • Section 18. 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:
      • (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 messages as his own.
  • Section 25. Actions Related to Contracts of Carriage of Goods. - Without derogating from the provisions of part two of this law, this chapter 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.
  • Section 26. Transport Documents. - (1) 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 data messages or electronic documents.

Invalidating/Protections

  • Section 18. 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 treasonable care or used any agreed procedure, that the transmission resulted in any error in the electronic data message or electronic document as received.18

Philippine National Public Key Infrastructure (PNPKI): Benefits

Source: https://dict.gov.ph/pnpki

It Reinforces the Identity Verification Procedure

Passwords are the most common go-to for authenticating computer and application access. Nonetheless, at it’s basic form, they offer very little protection. For example, a 10 character length password provides only a trifling 80-bits of security. If you were to strengthen this, you would need to apply something inconvenient. This is where a Digital Certificate issued by the PKI comes in. At minimum, they have a 2048-bit system generated to protect user identity. In practice, it even goes further than that; it incorporates complex computations which significantly hinders any attempts to compromise a Digital Certificate.

They Pave the way for Data to Be Admissible Evidence.

Numerous countries like the United States, Singapore, and the Philippines have already setup a legal framework through which digitally signed data can be formally acknowledge as proper evidence in court. For this reason, signing a digital document can be equivalent to signing a physical document. With digital certificates, you can imbue integrity to data which enables it to be a valid evidence. Signing the digital document will be tamper-proof due to its meticulous detection of any changes during verification.

It is a Crucial Safeguard for Common Communications

Our current government heavily depends on Information and Communications Technology or ICT. Nonetheless, due to how it was designed, it is incompatible with traditional security methods. The importance of the PNPKI is demonstrated by traditional encryption methods being unreliable due to the lack of regulation, and also the usage of ICT by enemies of the state; thereby, users will need to employ similar, or even better, technologies to be ahead of them. To highlight how impressive the PKI’s 4096-bit capability is; Wi-Fi, at-most, can only use a 96-bit password to encrypt traffic.

Footnotes

  1. Section 7.c.ii (Chapter 2) ↩

  2. Section 11 ↩

  3. Section 15 (Chapter 2) ↩

  4. section 16 ↩

  5. Section 18 ↩

  6. Section 18 paragraph 5 ↩

  7. section 19 ↩

  8. section 20 ↩

  9. If it is editable or alterable, it is not considered sent (I think) ↩

  10. Section 22 ↩

  11. Normally, an electronic data is received when it enters the receiver’s information system ↩

  12. if same platform/information system, the time when i seen it ↩

  13. Irrespective of the information system it was sent to (even if it was not the designated one), if the intended receiver receives it, time of reception will be the time they’ve retrieved it ↩

  14. Missing some details in the official gazette link ↩

  15. if you convey the transfer or negotiate rights in goods or rights and obligations under the contract using electronic means, that means that you cant use paper documents unless you replace the use of electronic messages/documents w/ paper ones. ↩

  16. Even if an old law requires you use paper documents, this law forces government institutions, departments, etc. to require or accept the use of electronic documents and messages by within 2 years this act is in place ↩

  17. An online network for facilitating electronic operations (like transmission) in the government and general public should be implemented within 2 years of effectivity of this act. This is to promote usage of electronic documents and messages ↩

  18. Red flags and time limit ↩

Graph View