Jurists Lecture (Electronic Commerce Act)

1. Electronic Commerce Act (RA 8792) took effect on June 19, 2000. It is based on the UNCITRAL Model Law on E-Commerce (1996) and Singapore Electronic Transactions
Act (1998).
a. To facilitate domestic and international dealings and transactions through the use of electronic, optical and similar mediums. Thus, it does not only involve
electronic mediums but also optical and similar ones.
b. To recognize the authenticity and reliability of electronic documents.
c. To promote universal use of e-transaction in the government and the general public.
2. It applies to any kind of electronic data message and electronic document used in commercial and non-commercial activities, including domestic and international
dealings and transactions. The title of the Act is somewhat misleading because it also covers non-commercial dealings.
3. E-Data Message refers to information generated, sent, received or stored by electronic, optimal or similar means.
a. Any of those transactions renders the message e-data. Even if it is not generated electronically, it becomes an e-data message if it is received electronically.
4. E-Document:
a. Definition:
i. Information or representation of information, data, figures, symbols or other modes (FIDSO) of written express. If you scan a picture, it is not an
electronic document because it does not contain a mode of written expression.
ii. By which a fact may be proved, a right established, or an obligation extinguished.
iii. Which is received, recorded, retrieved, produced, transmitted, stored and processed (3R2P TS)
iv. Electronically
b. Memorize the definition of e-document, no need to memorize e-data message.
c. ED are used interchangeable with EDM.
d. 3 Kinds of E-Docs:
i. Electronic writings
ii. Electronic Signatures
iii. Originals
e. 5 Categories of E-Docs (not exclusive) (CWEST)
i. Computer-stored/general docs
ii. Website data
iii. Emails
iv. Social media communications and postings
v. Text messages (it is now more of an EDM rather than an ephemeral electronic message because data now is stored and retained in phones unlike
before, outbound messages are not retained).
5. Legal Recognition of E-Docs
a. Information shall not be denied of its legal effect, validity or enforceability (EVE) solely on the grounds of it being in the form of or incorporated in an e-doc.
b. Principle of Non-Discrimination: e-docs should not be discriminated against but should be given the same legal status as their paper-based counterparts.
c. Parity Rule: e-docs shall have the same legal effect, validity or enforceability as any other document or legal writing.
d. If a law requires a document to be in writing, that requirement is met by an e-doc if the e-doc maintains its integrity or reliability and can be authenticated so
as to be usable for subsequent reference.

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 i. (Riguerra) Just ignore the later phrase, instead: If a law requires a document to be in writing, that requirement is met by an e-doc so long as it can be
accessed for a subsequent reference (under UNCITRAL).
ii. Laws requiring documents to be in writing:
1. Statute of Frauds (Art. 1403); if sale of land is in an electronic document, it is enforceable.
2. Negotiable instruments
3. Donation of personal property > P5,000 (Art. 748); thus, if you text the donation, it is valid.
4. Stipulation to pay (contractual, not punitive) interest (Art. 1956);
5. Power of attorney to sell land or interest therein (Art. 1874)
e. The confidential character of a privileged communication is not lost solely on the ground that it is in the form of an electronic document.
i. Argument that emails can be easily shared is not a valid. Thus, a lawyer can be held liable if he shares the information.
f. Functional equivalence of e-docs: for evidentiary purposes, an e-doc shall be the functional equivalent of a written document under existing laws.
i. Whenever a rule of evidence refers to the term writing, document, record, instrument, memorandum or any other writing (WIRD MO), this term shall
also be deemed to include an electronic document. Best Evidence Rule applies also to e-docs.
ii. Some Evidentiary Rules Requiring Evidence to be in Writing:
1. Best Evidence Rule (what if the text is deleted, can you prove it? Yes. Under documents lost, destroyed or unavailable can be proven by
secondary evidence; even if deleted, it retains its character as an e-doc)
2. Statute of Frauds
3. Parol Evidence Rule (once a contract has been reduced into writing, it cannot be changed because terms are incorporated in writing)
4. Business Entries, exception to hearsay
5. Official Records, exception to hearsay
6. Public Documents
6. Authentication of E-Docs:
a. It is no longer governed by Section 11 but on Rules on Electronic Document.
b. E-docs, EDM and E-signatures shall be authenticated by (DSR)
i. Evidence that it had been digitally signed by the purported signer (this ensures that document is not altered during transit)
ii. Appropriate security procedures or devices as may be authorized by law or rules have been applied to the document (it is inapplicable because of “as
may be authorized”; no laws at the moment that provide security procedures or devices)
iii. Other evidence showing its reliability and integrity to the satisfaction of the judge (most common way of authenticating; it’s a catch-all phrase; Rules
on Evidence do not have this catch-all phrase)
1. Rules on Electronic Evidence incorporates the Principle of Authentication by circumstantial evidence.
2. What do you mean by authentication by circumstantial evidence? If there is no eyewitness to the execution or writing of the document or
evidence for attesting the genuineness of the maker’s signature or handwriting, the document may still be authenticated using circumstantial
evidence).
a. Important concepts:
i. Self-Authenticated Document: where information in the writing contains codes or details which could have been known by
the writer or participating parties, such as dates, amounts (ex. Plane ticket; commercial invoices, bill of lading)

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 ii. Reply-Authenticated Letter: a reply refers to and affirms the receipt of the sending of the letter, thus the reply
authenticates the letter (the letter is genuine because I replied to it and the reply itself is authenticated because it shows a
correspondence being carried on between two people; both the letter and reply are authenticated when there is a
correspondence)
1. There are two rules:
a. Authenticated Letter
b. Reply Letter Rule
2. This applies to emails and text messages. Thus, there is no need to authenticate the text message as long as the
response is shown or it can be self-authenticated.
3. Evidence that an email is a timely response to an earlier message addressed to the purported sender is sufficient
foundation analogous to a Reply-Letter Doctrine (State vs. Pullens, 2011)
4. Several ways to authenticate email:
a. Emails may be authenticated by use of e-mail address, which many times contains the name of the
sender. The signature or name of the sender or recipient in the body of the e-mail is also relevant to
authentication.
b. Reply-Letter Doctrine
c. Contents of email and other circumstances may be utilized to show its authorship.
5. Possibility of an alteration or misuse by another of the e-mail addressed generally goes to weight, not admissibility.
Thus, email should still be received and evidenced.
7. E-Signature
a. This refers to:
i. Any distinctive mark in the e-form representing the identity of the person and attached to or logically associated with the e-doc (primary purpose is to
identify to person signing)
ii. As methodology of approving, authenticating or singing transactions; it includes digital signatures (a digital signature is a subset of electronic
signatures; thus all digital signatures are electronic signatures but not vice versa primary purpose is to approve the e-document)
b. Illustration:
i. To access my BPI account, I enter my user name and my password (e-signature because this identifies me as the accountholder)
ii. To confirm a trade, I enter my password (e-signature because it approves the transaction)
c. It is equivalent to a manual signature.
d. Authentication is almost the same as e-doc.
8. Retention of E-Doc: requirement in any provision of law that certain documents retained in their original form is satisfied by retaining them in the form of an electronic
document (before, original be kept in the public record; now, it an be digitalized)
9. Formation and Validity of E-Doc:
a. Except as otherwise agreed by parties, an offer, acceptance and other elements for formation of contracts may be expressed, demonstrated and proved by an
e-doc (this applies in donations through text where offer and acceptance were expressed; if you want to opt out from the general rule, you must indicate the
manner of acceptance to be under “otherwise agreed by parties”)

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 b. A contract shall not be denied validity or enforceability on the ground that it is in the form of an e-doc, or that any or all elements is expressed, demonstrated
or proved by an e-doc.
c. Freedom to Opt Out: parties may opt out as shown by the phrase “except as otherwise agreed by parties”
10. Interbank (ATM) E-Transactions: this is a provision which is specifically tailored to ATM transactions
a. E-transactions made through networking through banks and linkages with other entities or networks shall be deemed consummated upon actual dispensing of
cash or debit of one account and corresponding credit to another. It is as if I got the money from BPI.
b. Urban Bank Case: knowing that they had severe liquidity problems, the BOD of Urban Bank declared a bank holiday on 6pm of a particular date. But depositors
were using the ATMS until 10pm. Although there was a bank holiday on 6pm, they tried to deny other banks from crediting from them the ATM withdrawals.
Urban Bank asked BPI and other banks to go to insolvency proceedings. In order to avoid this situation, transactions were declared to be absolute as if Urban
Bank advanced the money to the depositor. Thus, there is an absolute obligation to reimburse the member banks of the ATM network. It should not be
subjected to preference of credits.
11. Service Provider
a. There are certain responsibilities and criminal liabilities that service providers are subject to.
b. This refers to provider of:
i. Online services or network access or operator of facilities (PLDT, Globe) including entities offering transmission for online communications
ii. Technical means for e-docs of an originator to be stored and made accessible to designated or undesignated third party.
1. Originator  SP  3rd party
c. Service Provider under the Cybercrime Prevention Act:
i. Any entity that provides ability to communicated by means of a computer system.
ii. Any other entity that processes or stores computer data on behalf of such communication service or users of such service.
d. Liability of service providers:
i. No person or party shall be subject to any civil or criminal liability in respect to the e-doc for which person or party acting as a service provider merely
provides access if such liability is founded on:
1. Obligations and liabilities of parties under e-doc (service provider is not a party to the contract; a contract on binds the parties)
2. Making or dissemination of material, including possible infringement of any right in such material (general rule: if you only uploaded, you are
not liable). Service provider shall not be liable as long as (KFCI):
a. It does not have actual knowledge, or is not aware of apparent facts that making or dissemination of material is unlawful or infringes
any rights in such material.
b. It does not knowingly receive a financial benefit directly attributable to the unlawful or infringing activity.
c. It commits infringement itself or induces others.
e. Lawful access (Privacy of E-Files)
i. Access to an e-file or e-sign shall only be authorized and enforced in favor of the individual or entity having a legal right to its possession or use and
solely for authorized purposes.
ii. Electronic key for identity or integrity shall not be available to any person without consent of individual or entity in lawful possession of it (BPI cannot
give it to an enforcement agent, subject to some exceptions such is if there is terrorist communications, suspicious transactions and money launder;
court intervention is required).
12. Crimes penalized under ECA:

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 a. H (hacking)
i. AID (unlawful access to a computer system; interference; or access in order to destroy, alter, corruptor steal including the introduction of computer
viruses). Mere access is considered hacking.
ii. Penalty: Unli fine (minimum of 100,000 and maximum commensurate to the damage incurred) and Mandatory Imprisonment (6 months to 3 years;
you cannot be a subject for probation)
iii. Prosecution under both ECA and CPA could give rise to double jeopardy notwithstanding Section 7 of CPA (Disini vs. Secretary of Justice, 2014).
Hacking is penalized both in ECA and Cypercrime Prevention Act although the legislature has defined them as different offenses.
b. P (online piracy)
i. D MUCUS DBP (Unauthorized copying, dissemination, use, modification, storage, uploading, downloading, making available to the public or
broadcasting of protected material, e-sign or copyrighted works including legally protected sound recordings or phonograms, or information material
on protected works through the use of telecommunication networks like the internet in a manner that infringes IP rights)
ii. Penalty: Unli fine (minimum of 100,000 and maximum commensurate to the damage incurred) and Mandatory Imprisonment (6 months to 3 years;
you cannot be a subject for probation)
c. CO (violations of Consumer Act or other laws)
13. Content-related offenses in CPA (penalized as Special Crimes)
a. Cyber child porn (it is also penalized in Anti-Child Pornography Act but subject to double jeopardy)
b. Cyber sex
c. Cyber libel (it is also penalized in RPC but subject to double jeopardy)
14. Digital signatures: it is a form of e-sign
a. It is an e-sign consisting of an encryption of an e-doc using an asymmetric cryptosystem such that the relying party can safely rely on the identity of the digital
signer and authenticity of the e-doc.
i. For purposes of Bar, it is a e-sign consisting of an encryption of an e-doc.
b. Advantages of a digital signature over e-sign:
i. The e-sign provides identification from a sender, a d-sign gives the recipient reason to believe that a message was created by a known sender.
ii. Sender cannot deny having sent the message (it provides for non-repudiation)
iii. Message was not altered in transit (non-alteration)
c. It is important in financial transactions, software distribution, other cases where it is important to detect tampering or forgery
15. A digital certificate is an exception to the hearsay rule, thus there is no need for the issuer of the certificate to attest it in court. It is considered like a public document
that no longer needs to be authenticated and prima facie proof of the facts stated therein.
a. It is presumed that:
i. Information contained in the digital certificate is correct.
ii. Digital certificate had been issued by the certification authority indicated in it.
iii. There is no case for invalidation or revocation of the certificate.
b. Because of these presumptions, a person presenting a digital certificate need no present witnesses from certification authority. It is an additional exception to
the hearsay rule.