Decoding the Role of the Electronic Commerce Act of 2000 (Republic Act No. 8792) in Business

Also read: Be SMART and roam around the GLOBE under the SUN: Highlights of Republic Act 11202 or the Mobile Number Portability Act

Modern technology in the form of information technology and communication plays a vital role in nation-building. With the enactment of Republic Act No. 8792 (RA 8792) or the Electronic Commerce Act of 2000, the information and communications technology modernized consumer transactions which made an impact on the Philippine legal system.

Objectives of Electronic Commerce Act

RA 8792 aims 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 to recognize the authenticity and reliability of electronic documents related to such activities and to promote the universal use of electronic transaction in the government and general public (Sec. 3 of RA 8792). In view thereof, consumers and businessmen may transact and consummate contracts through legal electronic means provided in RA 8792.

Legal Recognition of Electronic Documents, and Electronic Signatures

In cases of documents and signatures in electric form, the 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 (Sec. 6 of RA 8792). For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws (Sec. 7 of RA 8792).

On the other hand, as to electronic signature placed on the electronic document, it shall be equivalent to the signature of a person on a written document if that signature is proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which:

1. 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;
2. 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;
3. It is necessary for the party sought to be bound, in or order to proceed further with the transaction, to have executed or provided the electronic signature; and
4. 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. (Sec. 7 of RA 8792)

In furtherance of the support in favor of the recognition of electronic signature, it shall be presumed that electronic signature is the signature of the person to whom it correlates and it 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 noticed of defects in or unreliability of the signature or reliance on the electronic signature is not reasonable under the circumstances (Sec. 8 of RA 8792).

Communication of Electronic Data Messages or Documents

Under the Civil Code of the Philippines, all contracts have three (3) essential elements, these are, consent of the contracting parties, the object which is the subject matter of the contract and cause of the obligation which is established (Article 1318 of the Civil Code). Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract (1319 of the Civil Code). Under RA 8792, except when otherwise agreed by the parties, an offer and its acceptance and such other elements for the formation of contracts may be expressed, demonstrated, and proved by means of electronic data messages or electronic documents. 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 (Sec. 16 (1) of RA 8792).

With the passage of the foregoing, the State emphasized the principle that contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present (Article 1356 of the Civil Code).

Consummation of the Transaction Through Electronic Messages or Documents

The electronic transactions made through networking among banks, or linkages thereof with other entities or networks, and vice versa, 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. 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 (Sec. 16 (2) of RA 8792).

E-Commerce in Carriage of Goods

Aside from personal consumer transactions, RA 8792 also applies to contracts of carriage of goods. In the transport of the goods to the buyer or recipient, RA 8792 provides:

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.
2. The preceding paragraph applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for failing either to carry out the action in writing or to use a paper document.
3. If a right is to be granted to, or 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 unique;
4. For the purposes of paragraph (3), the standard of reliability required shall be assessed in the light of the purpose for which the right or obligation was conveyed and in the light of all the circumstances, including any relevant agreement.
5. Where one or more data messages are used to effect any action in undertaking to deliver goods to a named person or a person authorized to claim delivery or in granting, acquiring, renouncing, surrendering, transferring or negotiating rights in 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.
6. If a rule of laws 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 messages or electronic documents instead of by a paper document.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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