I.

INTRODUCTION
The right to Internet access, also known as the right to broadband, is now

acknowledged the view that all people must be able to access the Internet in order to exercise and
enjoy their rights to fFreedom of expression and opinion and other fundamental human rights,
and that states have a responsibility to ensure that Internet access is broadly available, and that
states may not unreasonably restrict an individual's access to the Internet.1
The Philippine Declaration on the Internet Rights and Principles, recognizes, that the
Internet is a global commons and a public resource that should further the public interest.
It,affirmsing that all human rights that apply or are enjoyed offline, particularly those enshrined
in the Universal Declaration of Human Rights, including the International Covenant on Civil and
Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural
Rights (ICESCR), and in the Convention on the Rights of the Child (CRC), Convention on the
Rights of Persons with Disabilities (CRPD), and Convention on the Elimination of All Forms of
Discrimination against Women (CEDAW), should likewise also apply and should be protected
enjoyedonline.2
It further provides that,everyone has the right to affordable and quality access to the
Internet. The State must narrow the digital divide in order to provide quality universal access and
ensure an enabling environment for fair competition that will benefit all stakeholders and
promote consumer protection. Consistent with the distributed nature of the Internet, communityowned and driven information infrastructure and networks should also be promoted as
alternatives or complements to national-level infrastructure. 3Thus, it can be concluded
thatinternet these days is one of the most important technologies, and no doubt it is really a great
help in our daily lives, whether it is a school work office work, entertainment and business.
Business companies are depending on the use of the internet when it comes to marketing
their business worldwide and not limited to the existing business place. Due to the wide range of
internet opportunities in business, now it is not limited to gigantic companies but it also reaches
the level of the small business or the retailers.

1 N. Lucchi, "Access to Network Services and Protection of Constitutional Rights: Recognizing the Essential Role
of Internet Access for the Freedom of Expression", Cardozo Journal of International and Comparative Law (JICL),
Vol. 19, No. 3, 2011.

2 http://internetrightsdeclaration.fma.ph/
3 Ibid.
1

Online sales isis one particular business activity, which is made possible and facilitated
by the internet. Undeniably, the online salesisisreally rampantprevalent(use a more positive
word) today.Buying what we want and what we need without leaving the house is now possible
due to the emergence and convenience brought by the virtual human and social networkingthat
was created by the internet. Online sSale is within the realm of what is so-called Electronic
Commerce or simply, E-Commerce.
Electronic Commerce or E-commerce (electronic commerce or EC) is the buying and
selling of goods and services, or the transmitting of funds or data, over an electronic network,
primarily the Internet. These business transactions occur either business-to-business, business-toconsumer, consumer-to-consumer or consumer-to-business. The terms e-commerceand ebusiness are often used interchangeably. The term e-tail is also sometimes used in reference to
transactional processes around online retail. E-commerce is conducted using a variety of
applications, such as email, fax, online catalogs and shopping carts, Electronic Data
Interchange (EDI), File Transfer Protocol, and Web services. Most of this is business-tobusiness, with some companies attempting to use email and fax for unsolicited ads (usually
viewed as spam) to consumers and other business prospects, as well as to send out e-newsletters
to subscribers.4
A. HISTORY
(MAKE SURE YOUR SENTENCES ARE PROPERLY WRITTEN; AVOID FRAGMENTS
AND IMPROPER LUMPING OF STATEMENTS)
(INDICATE DIRECT QUOTES PROPERLY; CITE ACCORDINGLY)
It would rightly be back-tracked by the time people felt the need to send interactive
content to be displayed on television and Videotex came into being (fix this sentence). Research
was going on from the early 1960s, and more corporations got interested in sending information
and thus it matured while Michael Aldrich of Redifon Computers Ltd gave the concept of
teleshopping and did good business in United Kingdom.5(fix sentence; sounds too cramped;
break down if necessary)

4http://searchcio.techtarget.com/definition/e-commerce
5 http://www.instantshift.com/2010/03/26/the-history-of-online-shopping-in-nutshell/
2

Online service of videotext, Minitel was launched in France in 1982 and was accessed
using telephone lines, similar model failed in UK (fix this sentence). It was a real success till
WorldWideWeb.6 (what do you mean? fix this sentence)
The researchers who were working on Videotex in US with services like The Source
and CompuServe in 1979 (contemporary of UK-based research: BBC with Prestel,
BritisTelecom with Viewdata, ITV with ORACLE) got interested in creating a solution for
customer-targeted payment processing whose target audience would be the software developers
and shareware authors., Tthey created Swreg in 1987 in US, thus enabling the first Online market
for the developers community.7
In 1990, Tim Berners-Lee, a British scientist working at CERN laboratory, wrote the
first web browser WWW which then changed most research processes and ways of businesses
seeing a whole new market to evolve (rather a whole new world The web world). 8 (fix
sentence; sounds to cramped; break down if necessary)
People saw new technologies evolving with new market, and then around 1994,a
company called Netscape released a browser, enabling anyone to type a name in the Navigator
browser and visit a webpage (which might look dumb right now, but was a real exploration
making them the real champs of the market and even challenging market leaders).Soaring stock
prices, Pizza Hut taking orders online and a wide variety of products being available online. 9(fix;
sounds like a fragment)
Then transactions and business started happening over the web urging every company to
have a .com. To address security issues, Netscape 1.0 introduced SSL encryption, for secure
transaction. Online retailer Amazon.com was launched, and selling each andsold practically
everything online. E-bay the online auction house founded by computer programmer Pierre
Omidyar. [Yipee everything on internet] (what is this?)10
United States postal service goes online, Acquisitions of majors overtaking smaller ones
for technological advancement; the whole environment was so technologically charged. This
6Pioneers of Online Shopping, Aldrich Archive, University of Brighton, www.aldricharchive.com
7 Ibid.
8 Berners-Lee, Tim (ca 1993/1994). "A Brief History of the Web"
9 "History of SSL at IBM.com".Publib.boulder.ibm.com.
10 http://www.instantshift.com/2010/03/26/the-history-of-online-shopping-in-nutshell/
3

went on till the year 2000 when finally the Bubble (The Dot Com bubble) burst with record high
in stock prices.11 (fix this sentence)
When money was involved in doing business over the internet, PayPal was launched,
providingfacility for online payment.and Now, it enjoyspractically hasa share of 70% (till
date,of what?) it provides facility for online payment. (cite basis)
Aggressiveness in the market especially in the online shopping market paved thegiving
way forto new tricks like giving out Coupons for customer loyalty. Likwise, and in an attempt
to keeps clients reverting back major benefits are being offered with decent discounts tokeep and
maintain clients,and further promote online shopping.12
B. Online Sales in the Philippines
Selling through the internetstarted in the Philippines in 1994. Since then, eE-commerce
has takenook a new manifestation form. Now, and businessesmen can now sell their goods
through ones their ownwebsites and are able to close sales transaction either online or through email.

Websites

like

PinoyDelikasi.com,

Load.com.ph,

RegaloService.com,

Lazada,

OkayOkay.com, Lenddo.com.ph, Shopinas, Island Rose, Heartland Malls, Chikka.com,

Cashsense,Metrodeal are examples of websites that sells goods and services online to consumers
based in the Philippines.13

Filipinos love going to the malls, which for decades has been a big part of the everyday
lifestyle, where the youth congregate, families bond, and everyone hangs out to escape the
sweltering heat. It is no wonder, then, that the country is home to three of the worlds biggest
malls, including the biggest one in Southeast Asia the SM Megamall. (basis)

In recent years, the Filipinos love for shopping has spilled over in a big way to the online
world, as more and more Filipinos are havestarteding to embrace e-commerce andstarting to

11 Ibid.
12http://www.instantshift.com/2010/03/26/the-history-of-online-shopping-in-nutshell/ (visited January 9,
2016)
13 Digitalfilipino.com/e-commerce-100/ (Visited Feb. 17, 2016)
4

spend lesser time at the malls,with asonline stores mushroomeding over the past few years,
offering a more convenient alternative to mall-shopping in the Philippines.14

Online retail has experienced steady growth in the country, boosted by the flurry of steep
markdowns, such as discounts of up to 70 percent. Sites like Lazada, CashCashPinoy, Zalora,
Groupon, and LivingSocial have brought excitement to e-commerce and have helped to build a
growing market of online buyers.15

HoweverDespite all these, other oneresearch has found out that the Philippines still has
the lowest online retail reach in the Asia-Pacific region at 53 percent, compared to the leader
Vietnam at 76.7 percent, according to comScores Southeast Asia Digital Future in Focus 2013
study. Yet, interest in online shopping is on the rise, promising bright prospects for the sector.
Specifically, local visitors to Lazada swelled dramatically, up 46 percent in 2013 due to an
expansive portfolio of bargains for even the traditionally priciest items. This trend led to more
online retail sites opening shop in the Philippines to tap local and global markets. 16

It shows that internet greatly affects the commercial transactions, and how the people
were given the opportunity to use this available means. (vague; fix this sentence)
C. ADVANTAGES AND RISK INVOLVED
(PROVIDE BASES/SOURCES; IF THROUGH OWN PERSONAL EXPERIENCE, BACK
THE STATEMENTSWITH CREDIBLE INFO)
Looking at the concept of the online sale, no doubt it is really advantageous to both seller
and buyer.The following are some of the instances that online buyers and sellers may encounter:
As to Advantages17(indicate direct quotes properly)
14http://www.exist.com/e-commerce-philippines/ (visited April 30, 2015)
15 https://www.islandrose.net/blog/2014/03/02/online-retail-becoming-popular-in-philippines-by-jamesdantow-the-manila-times/
16http://www.manilatimes.net/online-retail-becoming-popular-in-philippines/79528/ (visited May 2, 2015)
17 http://ecommercebootcamp.digitalfilipino.com/lesson/advantages-disadvantages/
5

1. Increased Revenue
A growing number of businesses today have realized that they can extend their
reach

online

by

making

their

products

available

through

online

portals

like Lazada, Ensogo, CashCashPinoy, and generate sales. For fashion, Zalora is a hotspot
for clothing and fashion brands to gain exposure. (source?)
2. Access international markets
Sites like Alibaba also allows Filipinos to look for potential products and
suppliers they want to market in the country. For businesses, it can also serve as a site to
promote products for export. (source?)
For the online service I Want TVe I Want TV, itstheir service allowed anyone in
the world to watch ABS-CBN TV programs and subscribe to them. (source?)it.
3. Customer information and trading exchange
Classified sites like OLX (formerly Sulit) and Istorya provided avenue for online
trading, where a member can become both a buyer can also beand a seller. Its feedback
system or reputation-scoring served as means to guide anyone who would like to trade
whether to trust another online member or not. (source?)
4. Reduce procurement and operation cost
For service providers and freelancers, getting clients typically involves face-toface client meetings and negotiations. With online services like Upwork, providers can
now bid for projects online. Companies can also use the platform to lookseek for hard-tofind skills and monitor and manage the project performance and deliverables done.
(source)
For advertisers looking for blogging platforms to market to, Nuffnang
Philippines is a popular destination to get exposure. For bloggers, the platform is also a
vehicle to generate income for ones blog. (source)
For logistic entities, e-commerce provided new revenue opportunities as more
companies and individuals now sell products online and have them shipped through
entities like LBC, JRS Express, Air21 and the like. (basis)
Businesses who also would like to bid for government requirements can also
check PhilGEPS. This electronic procurement system platform requires government
agencies requires to post their requirements. (basis)
6

5. Venue for trial marketing

Instead

of

just

advertising

with

no

guaranteed

returns,

deal

sites

like Metrodeal give companies a channel where they can market their products and
services where the customer pay to avail it at discounted rates. This way, the advertising
money is spent on companies who avail of the special offer instead.(basis)
Munchpunch is a site also tapped by the restaurant sector to give freebies and
perks to its site visitors. Encouraging prospective customers to try their offerings. 18
(indicate direct quotes properly)

As to Disadvantages/Individual risks19(indicate direct quotes properly)

Online Shopping, is not unequivocally beneficial.There are risks and dangers which are not
present in more conventional and face-to-face transactions.And it will be argued in this paper
that significant legal and institutional challenges to lawyers and legislature are requiredto provide
ways to reform the online sales method in order to enhance its economic security and efficacy.
The following are the common risks that may be encounteredby the buyer in an online sale.
1. You can lLosseyour ofprivacy (use third-person account)
The only means of reaching the buyer is trough the information given by
them. The name, contact number and the delivery address are information
required in order to enter into this kind of transaction.
2. You can be misinformedMisinformation
Not all information found on the Internet can be considered as true and
accurate, especially in online sales, the description of the products they are selling
does not corresponds to the description posted in the internet. Thus, deceiving
buyers can be deceives(?). (fix sentence)
3. Possibility of fraudCredit card and personal information
Credit Card and Personal information can be used to defraud not only the
buyer but the seller as well.
18http://ecommercebootcamp.digitalfilipino.com/lesson/advantages-disadvantages/
19 Ibid.
7

4. The products you ordered may not arrive on time or may not arrive at allNondelivery/failure of delivery
What consummates the contract of Sale is the delivery of the goods
purchased. The delivery of the goods purchased is the aim of the contract of sale
on the part of the buyer, non-delivery and late delivery would definitely prejudice
the buyer.

5. Cancellation of Orders
Orders once placed, cancellation is either impossible or if possible it
cannot be wmade without hassleinconvenience.

Risk to the Sellers

1. Fraudulent Buyers
One of the most common problems that online sellers are facing these days is that of
bogus buyers. Unscrupulous people are placing orders on online marketplaces, and are making a
fast buck on the sellers expense. A buyer can reject an order at the doorstep in case of COD,
return the product saying it does not meet the mark (possibly because the buyer found a cheaper
deal elsewhere), steal the product, replace it and return it, order the same thing multiple times or
simply cancels orders, which results in a poor seller rating, or other repercussions for the seller.
All this can accumulate to heavy losses for the seller, not to mention a drop in ratings and
performance in the marketplace.20
2. Third Party Source

A "third-party source" means a supplier (or service provider) who is not directly
controlled by either the seller(first party) or the customer/buyer (second party) in a
business transaction. The third party is considered independent from the other two, even if hired
by them, because not all control is vested in that connection. There can be multiple third-party

20 http://indianonlineseller.com/2015/11/dealing-with-fraudulent-buyers-heres-how-you-can-protectyourself-from-getting-duped/
8

sources with respect to a given transaction, between the first and second parties. A second-party
source would be under direct control of the second party in the transaction.21
When it comes to selling products online, the seller finds it to be more practical, easier and even
cheaper when working with a third-party platform. In doing so, the seller will not invest in an
expensive website, and will not figure out how to accept payments and other matters associated
with online sales.
A third-party marketplace is a web-based platform, which offers a range of capabilities
that connects sellers with buyers, for example wholesale companies, end customers (Ince, 2004).
(cite) A third-party marketplace offers users an interface to the suppliers product catalogues and
may additionally support payment, logistics, or ordering.22
Basically, the distinguishing factor of the online sales and the ordinary sales is the means
used, the former is through electronic means and the latter is on hand transactions.
Conventional law on Law on Sales, particularly Articles 1458 up to 1637 of the New
Civil Code and Republic Act No. 7394, otherwise known as TThe Consumer Act on the
Philippines, which primarily governs the sales transactionfor the protection of the consumer (fix
sentence). In 2000, Republic Act No. 8792, otherwise known as the Electronic Commerce Act,
was enacted. Bby virtue of the e-Commerce Act, electronic data messages, electronic documents
and electronic signatures attained legal recognition. Information shall not be denied validity or
enforceability solely on the ground that it is in the form of an electronic data message or
electronic document. Electronic data messages or electronic documents shall have the legal
effect, validity or enforceability as any other document or legal writing.23
Given the state of Philippine laws that presentlygovern sales transactions, this paper
seeks to argue that there are indeed areas that needs further study, especiallyto determine whether
the abovementioned laws adequately covers all aspects of this particular modern-day sales
transaction, as toably and fully protect the rights and interests of parties to the transaction and
leave no room for doubtful interpretation that may prejudice the parties.

II.

BACKGROUND

21"Definition - third party", Yale.edu, 2011, web: YLic, states: "not directly involved in the transaction".
22 Tsalgatidou and Pitoura, 2001
23 Sec.7 implementing rules and regulation of e-commerce act
9

A. ONLINE SALE PROCESS

This is a typical process of online sSales based on the study in the

North Carolina Portal. (cite) This process is also adopted here in the
Philippines. (basis?)
(fix layouting problems; consider making these as appendices, to avoid layouting
problems)

5. Transaction
Customer finds
product.is processed through merchant account or other payment method.

6. Funds
Flow to your business.
2. Customer can see reviews and information to allow
for sale.

7. Client
3. May call for more details or buy right
away.receives confirmation and receipts.

Products or services are delivered.

4. Clients add to shopping cart or clicks to8.order.

Illustration no.1
To further understand online sale, here is another example of transaction,
personally transacted with Lazada, one of the prominent online seller in the Philippines.

ADVERTISEMENT

PRODUCT/ PRODUCT DESCRIPTION

10

PRODUCT CONFIRMATION CONSUMERS DETAILS

PAYMENT DETAILS

CONFIRMATION OF ORDER
ORDER DETAILS

NAME/ADDRESS

ADDRESS

Illustration No.2

1. ADVERTISEMENT
As defined under RA 7394, Art.4 (b),Advertising is the business of conceptualizing,
presenting or making available to the public, through any form of mass media, fact, data or
information about the attributes, features, quality or availability of consumer products, services
or credit. (indicate direct quotes properly)
Advertising is the starting point of business, and one reason for a successful businessis a
good and effective advertisement. (basis)Familiar advertising tools utilized in online sales
include web banners or banner ads, including the use of facebook, instagram and other social
media.
11

There are certain rules provided by law that must be observed in advertisements:
1. Joint DTI-DOH-DA (expand acronym) Administrative Oorder No.1,sSeries of 2008,
Rules and regulations for consumer protection in a transaction covered by the Consumer
Act of the Philippines (R.A. 7394) through electronic means under the E-Commerce Act
(R.A. 8792):
2.
Sec.4. Requirements for Adopting Fair Marketing and Advertising
Practices-Retailers, sellers, distributors, suppliers or manufacturers
engaged in electronic commerce with consumers shall refrain from
engaging in any false, deceptive and misleading advertisement
prohibited under the provisions of Title III, Chapter VI of the Consumer
Act of the Philippines and its IRR, and shall comply with the advertising
and promotion requirements therein, and other advertising and
promotion guidelines issued by the respective departments in compliance
with other relevant laws.
3. The Consumer Act of the Philippines, alsos well has provisions against "special
claims", which is dealt with under Article 115 thereof where:
Article 115. Special Claims - Any advertisement which makes special claims
shall;
a) substantiate such claims; and
b) properly use research results, scientific term, statistics or quotations.
4. Furthermore it is provided under the Code of Ethics ratified by the Internet & Mobile
Marketing Association of the Philippines, with regard to superlative claim. It is stated
therein that:
a. Particular care must be exercised in the use of superlative claims. General
superiority claims like the best, and No.1 may not be used unless factually
substantiated.

b. The substantiation claim shall cover at least the immediately preceding 12

month period and should be supported by data from independent sources. In the
absence of data pertaining to the last 12-month period, the substantiation may be
based on the latest available reliable and bona fide figures. (cite)

5. INFORMATION AND REVIEWS

12

Online Sale, by its very nature, is considered as sSales of goods by description, as

enunciated under the provision of the Civil Code in that the seller sells things being of a certain
kind and the buyer merely relies on the sellers representations or descriptions. Generally, the
buyer has not previously seen the goods. The buyer merely relies on the information given by the
seller, as to the sellers themselves, and as to the products they are offering to the consumers.
(cite)
i.

Information load
The buyer, in transacting with the seller, merely relies on the information load provided

by the latter. Information Load is a product of the spatial and temporal arrangements of stimuli in
the web store.24 Compared with conventional retail shopping, the information environment of
virtual shopping is enhanced by providing additional product information such as comparative
products and services, as well as various alternatives and attributes of each alternative, etc.25

Online stores describe products for sale with text, photos, and
multimedia files, the basic descriptions such as sizes and colors some
provides or link to supplemental product information, such as instructions,
safety procedures, demonstrations, or manufacturer specifications.Some
provide background information, advice, or how-to guides designed to help
consumers decide which product to buy.

However, under the Joint DTI-DOH-DA Administrative order No.1 series

of 2008, the following disclosures must be observed:

As to the disclosure on the part of the seller,

Section 5. Requirements for On-line Disclosure of Information.
1.) Information About the Retailers, Sellers, Distributors, Suppliers or
Manufacturers. Retailers, sellers, distributors, supplies or manufacturers
engaged in electronic commerce shall provide accurate, clear and easily
24 Mehrabian, A., & Russel J.A. (1974) An Approach to Environmental Psychology. Cambridge, MA:
The MIT Press.
25Huang, M. (2000) Information load: its relationship to online exploratory and shopping behavior.
International Journal of Information Management 20: 337347.
13

accessible information to identify themselves, which includes but not limited

to the following:
1.1) Department of Trade and Industry (DTI) and/or Securities Exchange
Commission (SEC) registration;
1.2) Name of the owner/proprietor of a retail establishment in case of a
single proprietorship and names of directors and other officers in case of a
corporation;
1.3) Principal geographical address of the retailer, seller, distributor,
supplier or manufacturer, and when applicable, of offices or agents in the
Philippines;
1.4) Website, e-mail address or other electronic means of contact,
telephone and fax numbers, of the retailer, and when applicable, of its offices
or agents in the Philippines;
1.5) Any relevant local or foreign government registration/license numbers
such as but not limited to the local government units permit to operate,
Taxpayers Identification Number (TIN), when applicable;
1.6) Contact details about any business association or organization
membership, when applicable.
1.7)Representative agent(s) in the Philippines for purposes of summons.

As to the disclosure on the part of the product offering by the seller to

the consumers,
Sec. 5 (2) Information about the Products or Services.
Retailers, sellers, distributors, suppliers or manufacturers engaged in electronic
commerce with consumers shall provide:
2.1) fair, accurate, clear and easily accessible information describing the products
or services offered for sale such as the nature, quality and quantity thereof;
2.2) fair, accurate, clear and easily accessible information sufficient to enable
consumers to make an informed decision whether or not to enter into the transaction;
and
2.3) such information that allows consumers to maintain an adequate record of the
information about the products and services offered for sale.

ii.

Rate and review

14

One source of information in online sale is the Rate and review by the previous buyers,
some online shops allows to commenting or rating their items. There are also dedicated review
sites that host user reviews for different products; even blogs give customers the option. Product
review sites may be supported by providing affiliate links to the websites that sell the reviewed
items. (source)
6. PRODUCT CONFIRMATION
This is the stage wherein the buyer has selected the product he wished to buy.,Mmost of
the online stores provides for a cart which signifies that the buyer is done in selecting the
items, just like in buying in the brick and mortar stores.
In this stage of online transaction, the seller will also confirm to the buyer whether or not
the items selected are available or out of stock. (cite source)
7. BUYERS DETAILS
Upon confirmation of the availability of the product, the seller will now ask the buyer fill
up a form which consists of the following: , the nName, address, contact number and other
details that may deemed sufficient for the seller in order to deliver the purchased goods to the
buyer.
8. PAYMENT
In Online Sales, the mode of payment depends on the policy of the online seller.,Oothers
provides for cash on delivery, while the others uses, credit cards, and other modes of payment.
Among the Other payment methodss are done through the following entities and sites: (cite
sources and bases)
1. Smart Money& GCash
Smart Money, one of the first ewallet services in the Philippines provided by telco Smart
Communications, provides a payment service for both merchants and online shoppers. GCash,
telco Globes counterpart to Smart Money, is also being used by online sellers and shoppers, and
other payment gateways. Users likewise have to own a Globe SIM. By activating a GCash
account, users just have to put in their mobile number linked to their GCash account on the
designated ecommerce site, and the balance will deducted from the wallet. It also uses an SMS
notification feature that informs the user of transactions.
2.

DragonPay

15

Payment gateway DragonPay launched in 2010 during the height of daily deals in the
Philippines, aiming to offer alternative payment methods for ecommerce sites in the Philippines.
To date, DragonPay has hundreds of merchants using the payment system in the areas of daily
deals, retail, travel, and other online stores.
3.

JuanPay
A Cebu-based startup which launched in 2013, JuanPay, also offers an alternative

payment method for ecommerce merchants in the Philippines by integrating its software on their
websites. Smaller scale sellers on Facebook and Instagram can also coordinate with JuanPays
support team to have accept payments using JuanPays payment system.
4.

PesoPay
PesoPay is a service by e-payment service provider AsiaPay, which focuses on providing

payment options for merchants and consumers in the Philippines. Similar to other payment
gateways, its payment system can easily be integrated to the site.
5. PayEasy
One of the services provided by internet-based services company Mozcom is PayEasy,
which also integrates it payment system into ecommerce sites shopping carts.
6. MolPay
Malaysia-based payment company Money Online (MOL) is an online payment platform
for games throughout Asia. In addition to this, it also gives merchants more options to accept
payments through its local partnerships with different countries in Southeast Asia Malaysia,
Singapore, Philippines, Thailand, China, Indonesia and Vietnam.
7.

WeePay
WeePay is another recent addition to the list of payment gateway startups in the

Philippines. The payment company is a subsidiary of brokerage company Accord Capital

Equities.
8. 7 Connect
The huge convenience store franchise 7 Eleven has likewise jumped into offering
payment options for merchants and consumers in a few Asian countries. This service is available
in the Philippines and is already being utilized by some online sellers.
9.

Coins.ph\
The cryptocurrency Bitcoin has become a new way to send money anywhere, including

merchants. In the Philippines, Bitcoin trading platform Coins.ph has also created a payment
service for ecommerce sites in the country. It jumpstarted the service by offering the Bitcoin
payment service to top daily deal sites Metrodeal and CashCashPinoy.
10. PayPal
Paypal is undoubtedly the most popular online payment service on the world wide web. It
allows any individual, from almost anywhere in the world, to instantly transfer money
16

electronically to any recipient with an email address - through the internet. Any person can use it
to buy products on shopping and ecommerce sites or to pay for various web services. It's an
excellent and easy-to-use alternative to the traditional credit cards, checks and money orders.
Lots of web based merchants support this payment method and accept Paypal orders on their
shopping sites. These online vendors will gladly take your e-payment for any of their offerings.
Paypal stores enable you to buy things that you need or want anyway, with the money that you've
been accumulating in your account. Such websites can easily be identified either by displaying
the Paypal logo on their pages or simply by stating it on their main or FAQ page (usually under
the "Payment Methods" section).The ability to easily send and receive funds through the net
(both locally and internationally) has turned Paypal into one of the most popular forms of
payment and transaction processing methods worldwide.26
11. Couriers Service with payment collection servicescollection
Some of the local courier service providers offer payment collection as part of their
service,although the information is not directly published on their site on the rates and scope of
this service. 27
LBC
LBC Bills Xpress is one-stop shop for paying bills. Partnership with Bayad
Center lets you can settle your accounts to more than 100 merchants nationwide
from credit card bills, to utilities, to government service fees, you can settle it all
at our branches, fuss free.28
XEND
2GO
Air21
12. Cebuana
Besides pawning, money transfer, insurance, and banking, Cebuana Lhuillier also offers a
host of other services to address the needs of clients. Foreign exchange and business to business
transactions such as bills payment, e-load and corporate payout are also available in selected
branches.29

9. CONFIRMATION

26 http://www.ppaccepted.com/
27 http://digitalfilipino.com/accepting-payments-online/
28 http://www.lbcexpress.com/category/lbc-express/payments-and-remittance#bills-express
29 https://www.cebuanalhuillier.com/other-services/
17

It is the stage wherein the seller will now confirm that the transaction has been processed
and ready to be delivered to the buyer. Usually an email will be sent to the buyer stating therein
that the purchased items has been process and it will be delivered in a few days by a certain
courier service which will be named by the seller. (basis)
10. DELIVERY
In online sales, there are various modes of delivery employed. It may be made primarily
throughpersonal delivery, where the seller or a representative delivers the items to the buyers
doorstep. Parties may also opt to meet at a mutually agreed place of delivery for a cash-ondelivery transaction,meet-ups as they are called.In delivering the goods purchased in online
saleLikewise, the online seller can engage in the services of a courier.or in any other cases
personal delivery like meet-ups is done. Couriers like LBC, JRS, Federal express, 2GO and the
like.
Delivery of goods purchased is made upon the payment of the price or other sellers make
such delivery upon depositing of the part of the purchased price.
B. THIRD PARTY PROVIDERS
Third party e-commerce platform plays a very important role in the development of ecommerce. Third party e-commerce platform is a platform that provides a virtual place for
sellers, buyers, suppliers and banks to make transactions and communicate with each other. The
functions of third party mainly include: providing a public platform for information posting that
contains information collection, classification and organization; providing am on-line place for
communication; offering network notarization to reduce on-line risk. With the development of
online shopping, there come many problems. As the vitality of internet, the phenomenon of
selling fake goods, infringement and fraud are popular in e-commerce market, which cause the
contradiction between buyers and sellers become more intense and intense. The third party ecommerce platforms are trying to mitigate the trust crisis between consumers and sellers. 30 (fix
sentence construction and grammar issues of this paragraph)
i.

AS TO THE MARKETPLACE

Online sales involves different modes of marketing its product, first, is the development
of own online store, through its own webpage, nowadays, we can see these online stores in
instagram, facebook and the like they are also called online retailers. Second, those who are
engage with third party providers, such as but not limited to the following:
30http://worldsciencepublisher.org/journals/index.php/AITM/article/view/456/402
18

1. Lazada
2. Ebay
3. OLX by sulit
4. Hallo2 Mall
5. Shopinas.com
These online shops consist of a third party stores and seller, and serves as a mediator to
provide convenience to both sellers and buyers.
ii.

AS TO DELIVERY

As previously mentioned, iIn the delivery ofing the goods purchased, there are two
commercially established modes:;
1. Meet-ups;
2. Through the service of a courier,
3. aAmong the courier providerswhich are as follows:
1.LBC
2.JRS
3.Xend
4.Abest
5.Vrush, etc.
The abovementioned providers give as variety of choices and convenience that buyers
ever wanted, however, this is without problem, complaints over the internet arises, such as but
not limited to, late delivery, non-delivery, and defects in delivery, the defense of the seller is that
they placed the items of the buyer in good condition thus, the buyer sometimes left without
recourse. Another issue over these providers is the hidden charges that buyer incurred. (fix
sentence construction and grammar issues)
C. COMMON COMPLAINTS
Conveniencee, it is the primary purpose and objectivereason why online saleshas
becoame rampant popular today and is continuously patronizedzing by many buyersthe public.
But in Despite of the convenience it brings, it is not without complaints raised by the buyers.
The following are the common complaints raised by the buyers against the online sellers.
1. Cancellation
We purchased a voucher for Aquatiq10 hotel Feb 23 via metrodeal.com. The
voucher was sent and then we found out that the dates we wanted were no longer available.
We checked the terms and conditions of metrodeal which indicate on section 5.4 that we
19

have 5 business days to cancel. We sent an email to them (as per instructions regarding
cancellation) and much to our surprise, they denied our request to cancel without any valid
reason. They just said that the transaction now has been finalized which is totally against
the terms and conditions on their website.31
2. Refund not provided
I bought a metrodeal voucher for P 4,999.00 via credit card last December 2015.
Unfortunately, the date I wanted to be booked was not available. So I ended up requesting
for a refund, which appears to be the worst decision I ever made.
.
Dec 19 2015 - I contacted metrodeal for the refund, and I was advised 7-14 business days for
the request to be processed. Three days after, the voucher has been cancelled.
Jan 20 2016 - I've been checking my online banking everyday, but not a cent refunded. So I
waited for my Jan SOA to verify this. Unfortunately, the latest SOA issued Jan 20 still had
no refund provided.32
3. Fake Items
I bought a Kingone K5 BT Speaker supposed to be as a gift because I already own
one
and I'm very satisfied with the quality. Given that Lazada makes sure that all the items
being sold in the online shop was genuine, I bought it because it's the lowest price. But
when I received the product, I can tell in the packaging itself, that there's something
wrong with the item I bought. It should be a tin rectagular can but it's in a carton box.
When I open the box, the back side of item was different from the original. Right then, I
am
disappointed
with
the
item
I
received.
The Seller lures the buyers by posting the photo of the original item but it didn't state
there that it is not the actual product.33
4. Non-delivery of Paid Items
I ordered a Cherry Mobile phone with cash cash pinoy last June 35 and paid it
over Daragon Pay Cebuana. They sent me a voucher confirming my payment. Until today
no phone is delivered to me. I keep emailing them for an update they keep giving me
excuses that there is no reply from logistics with regards to the status. In their website they
said 3 days for manila. It is now July 3 and no delivery. Every-time you chat to their
customer service they give you the same reason. No resolution and the item is paid. They
do not even have a number to call. This site has to stop selling. The number of victims are
increasing34
5. MISLEADING ADVERTISEMENTS
31http://complaintsboard.ph/main/category/35/10/20
32 Ibid.
33 Ibid.
34 Ibid.
20

I was charged with additional shipping fee but the fine print says my items are
of FREE DELIVERY. Also, there's a note that says the items will be delivered 1 day after
purchase and will expire on the 10th day. Today is the 9th day already but i haven't got my
orders yet!35
The above-enumerated complaints are raisedthrough various complaint boards, forums websites,
even social networking sites and accounts created in the internet by the e-shoppers in the
Philippines.

III.

STATEMENT OF THE PROBLEM

i.

Whether or not the New Civil Code, specifically Law on Sales Art. 1458 to 1637
as a fundamental law in Contract of Sales,, is applicable in Online Sale
Transactions.

ii.

Whether or not RA 7394, otherwise known as the Consumer Act of the

Philippines, in relation to E-commerce Act, sufficiently addresses all the issues
concerning online sales.

iii.

Whether or not RA 10173, or otherwise known as Data Privacy Act, is sufficient

in order to protect the information disclosed by the parties.

iv.

Whether or not the remedies provided under the applicable laws are adequate
and effective for the redress of to the prejudiced parties.

IV.

APPLICABILITY

OF

EXISTING

LAWS

IN

ONLINE

SALES

TRANSACTIONS
1. APPLICABILITY OF CIVIL CODE AND RA 7394
NEW CIVIL CODE
The New Civil Code, particularly the Law on Sales Art. 1458 to 1637, is the fundamental
law that governs the Contract of Sales, wherein the protection and remedies to both contracting
parties are safeguardedprovided.

35 Ibid.
21

Art. 1458 of the Civil Code defines sale as contract whereby one of the contracting
parties (seller) obligates himself to transfer the ownership, and to deliver the possession, of a
determinate thing; and the other party (buyer) obligates himself to pay therefore a price certain in
money.36
Given the definition of contract of sale, its perfection brings about the creation of two sets
of obligations: first is the obligation of the seller to transfer ownership and deliver the
possession, and second, is the obligation of the buyer to pay the price. Both sets of obligations
are real obligations and can be the proper subject of actions for specific performance.37
This is clearly the governing law on all kinds of sales transaction, and the online sale falls
within the ambit of this provision.The primarydifference is as to the means employed in
transacting with this kind of sale due to the emerging technology and the presence of internet.
Thus, the obligations of both partiesunder a contract of sale are similarly applicable in online sale
transaction, including the specific performance upon the perfection of the contract.
i.

PERFECTION OF CONTRACT OF SALE

Under the New Civil Code,Art. 1475, the contract of sale is perfected at
the moment there is a meeting of minds upon the thing which is the object of
the contract and upon the price. And from that moment, the parties may
reciprocally demand performance. This meeting of the minds speaks of the
intent of the parties entering into the contract respecting the subject matter
and the consideration thereof.38
The meeting of the minds in contract of sale is upon the acceptance of
the offer. Acceptance under Art.1319 of the New Civil code must be absolute,
and a qualified acceptance constitutes a counter-offer.

OFFER

36 Alfredo v. Borras, 404 SCRA 145 (2003); Cruz v. Fernando, 447 SCRA 173 (2005)
37 Villanueva, law on sales
38 Santos v. Heirs of Jose P. Mariano, 344 SCRA 284 (2000); Katipunan v. Katipunan,
375 SCRA 199 (2002)
22

For the perfection of a valid sale, there must be a meeting of minds,

which means that an offer certain is met by an absolute acceptance; any
offer which is not certain, no matter how absolutely it is accepted, can never
give rise to a valid sale.39

In the Law on Sales, what makes an offer certain is when it is floated

by the offeror having within its term the description of the subject matter
that has all three requisites of possible thing, licit, and determinate or at
least determinable; and with the price that has the requisite of being real,
money or its equivalent, and must be certain or at least ascertainable,
including on the terms of payment thereof. The absence of even just one of
the essential requisites pertaining to either subject matter or price in the
terms of the offer, makes such offer uncertain and cannot give rise to a valid
sale.40

Clearly, in contract of sale, the requirements of offer must be certain

in order to give rise to a valid sale. In online sales, specifically those sellers
using the social media, like facebook and instagram, which is really in
demand as of now, they simply post a picture of the items of the products
they offer to the buyers containing therein the mere description of the items,
without stating the price of the product. (faulty sentence; fix) (See illustration
below.)

39villanueva
40villanueva
23

Illustration No.3
This illustration shows,how an example of a post of an online seller
whereinsdo,the prices of the product being offeredsare is not specifically
provided. They Thiscannot be considered as an isolated cases due to the
fact that this practice is ey are of numerousrampant nowadays.

The illustration above is clearly not within the ambit of Contract of

Sale,as defined under the New Civil Code. In order to have a definite offer,
the following requisitesshould be present:
1. Possible thing, licit, and determinate or at least determinable;
2. Price that has the requisite of being real, money or its equivalent,
3. Must be certain or at least ascertainable, including on the terms of
payment thereof.

Absence of any of the three does not make an offer certain and will not
give rise to a valid contract of Sale. This is whatconventional Law on Sale
teachesus.
It may be raised that this is the modern trend that the changing
world brings us.There now seems to bean emerging concept of offer and
definite offer in the world of internet and online transactions. While there is
indeed a variation ofinthe concept under the New Civil Code, what is certain
is that this kind of offer is capable of triggering a sales transaction in the
internet.

However, there is neithero law nor jurisprudence telling us that this

variationwill give producethe same effect as the settled concept of definite
offer as enunciated in the New Civil Code. Even the E-Commerce law does
not provide for the same.In the absence of such, still we must observe the
conventional law of the Law on Sale in the New Civil Code.
24

Another argument that is presented is the manner of how an online

seller makesan offer to the buyer. The only means that online seller make
its offer is through Advertisement.howeverHowever, the Article 1325 of the
New Civil Code tells usprovides for the following rule as to advertisements.:.
It

ADVERTISEMENT
The NewCivil Code Art. 1325 provides that business advertisements of things
for sale are not definite offers, but mere invitations to make an offer.
The general rule for advertisements is that they are less than
offers, and constitute merely an invitations to make an offer, or
mere proposals; the direct acceptance of such advertisements
thereof do not give rise to a valid and binding sale. The exception is
when it appears otherwise, in which case such advertisements
would constitute offers, and if certain and accepted directly, would
give rise to a valid and binding sale.41

According to Villanueva, the better view is that even when the advertisement contains a
certain offer, it remains legally a mere invitation so long as it addressed to the public at large, and
the exception comes in whenever it expressly provides that the first absolute acceptance shall be
binding, or when it is addressed to a particular offeree.42
The advertisements in online sale using web banners, instagram, facebook and other social
media per se are not definite offer applying the provision of the New Civil Code.
Analyzing the provision of the Civil Code in connection with the online sale transaction,
advertisement in the abovementioned means is the only way that these online sellers can offer
their products, In the view of Villanueva, as abovementioned, online sales is a mere invitation by
41 Villanueva p. 137
42 Villanueva p. 138
25

its very nature. Thus, the concept of advertisement is not an offer but only a mere invitation is
not applicable to online sales.
In understanding the concept of Advertisement, vis--vis the kind of offer and acceptance
that cwould give rise to the valid perfection of contract of sale, it appears that in the strict sense
that it does not apply to the online sale transaction. The question that is left then in our mind is,
as to when the online sale transaction, being a contract when it is deemed perfected.

ACCEPTANCE
As to the concept of acceptance,in order for an acceptance to have the
effect of converting an offer to sell into a perfected contract, it must be plain
and unconditional, and it will not be so, if it involves any new proposition, for
in that case, it will not be in conformity with the offer, which is what gives
rise to the birth of the contract. 43 Clarifying the extent by which acceptance
must be absolute, Beaumont v. Prieto44, held that promises are binding when
and so long as they are accepted in the exact terms in which they are made,
and that it would not be legally proper to modify the conditions imposed by
the offeror without his consent.45

Thus, in a conventional contract of sale transaction, the acceptance as

a general rule must be plain and unconditional, otherwise, it will not
constitute a perfected sale, applying the transaction in online sale, and
acceptance of the buyer must comply with what is required by law.
(faulty; fix this sentence)

ii.

CONSUMMATION

43 Zayco v. Serra 44 Phil. 326 (1923)

44 41 Phil. 670 (1916)
45 Villanueva p.172
26

In the case of PNB vs. Ling, GR.No. L-26937, October 5, 1927, the Supreme Court
heldthatdelivery and actual transfer of ownership of the thing together with the payment of the
price marks the consummation of the contract of sale. Under Art. 1497 of the New Civil Code,
tThe thing sold shall be understood as delivered when it is placed in the control and possession
of the vendee, which is also called as actual delivery wherein it primarily governs the online sale.
(faulty; fix this sentence)
The concept of Consummation under the New Civil Code still applies to anthe Online
Sale transaction, wherein upon the delivery of the goods ordered by the buyer over the internet
consummates the contract. Thus, the placing of the goods into the hands of the buyer through
delivery is the primordial objective of the contract.
In an online sale transaction, the seller in delivering the goods has the option to
personally delivers it to hrough the sellerbuyer(or the so-called meet-ups) or to engagesthe
service of a courier. Engagement of the service of a courier is not a new in case in contract of
sale. This courier is within the ambit of the Common Carrier, which is governed by Code of
Commerce.
The Common Carrier in the Carriage of goods has the following primary obligations:
1. Duty to deliver the goods to the proper person;
2. Duty to accept the goods;
3. Duty to seasonably deliver the goods to the destination;
4. Duty to transport the goods safely to the agreed destination; and
5. Duty to exercise eExtraordinary diligence.46
As to the tTime of delivery, it will depend if there is a stipulation provided or in the
absence of the latter. In case there is a stipulation in the cContract orf in the Bill of Lading
(fix), the carrier is bound to fulfill the contract and is liable for any delay no matter from
what cause it may have arisen. The reason behind is that it is presumed that the carrier might
have provided a contingency for such delay.47 When there is no stipulation, (1) the delivery
must be within a reasonable time which shall depend on the expected date of the arrival in
the bill of lading or on the nature of the goods, and (2) the cCarrier is bound to forward them
in the first 1stshipment of the same or similar goods which he may make to the point of
delivery.48

46 Aquino & Hernando, Transportaion Law supra at 44

47 Saludo, Jr. vs. CA Gr. No. 95536, March 23, 1992
27

II.

RA 7394 (THE CONSUMER ACT OF THE PHILIPPINES) AND RA 8792 (ECOMMERCE ACT)
Aside from the New Civil Code, RA 7394, otherwise known as The Consumer Act of the

Philippines (enacted on April 13, 1992),has the stated primary objective of protecting the interest
of the consumers. It lays down all the rules and regulations that basically protect the consumers,
and the obligation of the seller to comply with the requirements.
However, this law does not clearly states therein whether or not it is applicable to online
sales or confined to the conventional sales transactions.
In 2000, RA 8792, otherwise known as Electronic Act or E-Commerce Act, was enacted.
It , and this law serves this law serves to facilitate domestic and international transactions and
agreements through the utilization of electronic and similar medium, . This law was also enacted
and to promote the universal use of electronic transactions in the government and by the general
public. By virtue of the e-Commerce Act, electronic data messages, electronic documents and
electronic signatures attained legal recognition.
RA 7394, otherwise known as the Consumer Act of the Philippines, in connection with
RA 8792, otherwise known as E-Commerce Act, are the special laws that primarily govern the
online sale transactions. The former states thatit is the policy of the State to protect the interests
of the consumer, promote his general welfare and to establish standards of conduct for business
and industry.,Online the buyers online are classified as consumers within the ambit of this law,
thus, covered by the Consumer Act of the Philippines. 49The latter was enacted for the recognition
and use of electronic commercial and non-commercial transactions and documents, penalties for
unlawful use thereof and for other purposes.50
i.

Matters covered by special laws in connection with Online Sale Transaction

The following are matters, which are governed by the above-mentioned special laws

concerning the online sales transactions:

1. Chapter 1, Title 2 of the Consumer Act provides for the right of the consumer to the
quality and safety products.
48 Art. 358, Code of Commerce
49 Art.2, R.A 7394
50 Art.2, R.A. 8792
28

The injurious, hazardous and safety products are prohibited by law, there are
certain standards that must be observed by the seller. (fix this)
2. Chapter 2, Title 2 of the Consumer Act provides that the food, drugs cosmetics and
devices are regulated through the Department of Health as to itsquality and measures.
3. Chapter 1, Title 3 of the Consumer Act, particularly Article 48,provides that the State
shall promote and encourage fair, honest and equitable relations among the consumer
transactions and protection against deceptive, unfair and unconscionable sales or practice,
and the Department of Trade and Industry is the implementing agency assigned under the
said law.
4. Article 67 of the Consumer Act also includes and governs the warranties of the products
offered by the seller. The warranties provided under the New Civil Ccode are also
observed.
5. Article 97 of the Consumer Act provides for the lLiability for dthe Defective pProducts
whereinaAny Filipino or foreign manufacturer, producer, and any importer, shall be liable
for redress, independently of fault, for damages caused to consumers by defects resulting
from design, manufacture, construction, assembly and erection, formulas and handling
and making up, presentation or packing of their products, as well as for the insufficient or
inadequate information on the use and hazards thereof.
6. Article 110 of the Consumer Act provides forthe guidelines regarding false, deceptive or
misleading advertisement wherein, it shall be unlawful for any person to disseminate or
to cause the dissemination of any false, deceptive or misleading advertisement by
Philippine mail or in commerce by print, radio, television, outdoor advertisement or other
medium for the purpose of inducing or which is likely to induce directly or indirectly the
purchase of consumer products or services.
7. RA 8792gives legal recognition of electronic data messages, electronic documents and
electronic signatures.
8. Section 16 of RA 8792 allows the formation of contract in eElectronic form.
9. Section 31 of RA 8792 provides thataAccess to an electronic file, or an electronic
signature of an electronic data 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;
This enumeration clearly covers the different aspects of online sales, from the guidelines
regarding the advertisement, the product security and the recognition of the contract through
electronic means.

29

However, despite the enactment of special laws applicable to the online sale, there still
are significant aspects of the online sale transaction thatare not covered and which seem to be too
important not to be addressed, such as but not limited to: (you may summarize these below as
your recommendations)
1. As to the Cancellation of the Order
In the business, cancellation of orders cannot be avoided; we are used to it in our
conventional stores. However, this is the common problem in online transaction; cancellation of
a placed order cannot be done without inconvenience or sometimes may not be done at all. ,
fFew online shops provides for the cancellation option but it is not easy to cancel the placed
orders due to the immediate processing of it. Thus, the buyer is without recourse but to just
accept the supposedcancelled orders and pay the same. This situation is prejudicial on the part of
the buyers, who will accept the supposed cancelled orders due tobythe sheer absence and
unavailabilitylacking of the option to cancelation option.

Under the Distance Selling Regulation in UK:

Right to cancel an order starts the moment you place your order and doesn't
end until 14 days from the day you receive your goods. You should also be
provided with a cancellation form at the point of sale, although you don't have
to use it. You can cancel an online order in writing, by fax or by email, though
its sensible to stick with the process the seller has set up - if its reasonable.
The seller shouldnt make cancelling an online order unnecessarily difficult.51

Cancellation of the order must be a matter of right on the part of the buyer, there must be
a specific time within which such right must be exercised in order for the buyer to be observed.
Simply providing for the cancellation option in the online store does not warrant that such
cancellation will be processed, it will caused hassle and inconvenience to the consumer, and thus,
it will defeat the purpose of the online sale. (fix this sentence)
The abovementioned foreign regulation must be adopted here in the Philippines, so that
cancellation of the placed order will be regulated. It will certainly be a great help and
advantageous to both seller and consumer. (replicate below as a recommendation)

51 http://www.onlineshoppingrights.co.uk/understanding-uk-distance-selling-regulations.html
30

2. Copy of the contract entered into by the parties.

Article 16 of RA 8792 recognizes the formation (use a more accurate term) of athe
contract through electronic form. However, there is no provision under RA 8792 and RA 7394
requiring the seller to provide for a copy of the contract of sale to the buyer or its confirmation.
Providingsuchevidence of the contract within a reasonable time is a great protection to the
consumers. Although some sellers, for instance, in transacting with Lazada, send a confirmation
notice of the purchased items through email, still not all online sellers provide or have the
capability of providing such confirmation. Moreover,there is the issue of whether such
confirmation is in accordance with what is required by law. Thus, there must be a regulation
concerning this.
The importance advantage of having a copy of a contract no matter how big or small the
amountinvolved it deals with is that an aggrievedthepartybuyer, who will be prejudiced in
transacting with the seller, willmay be able to present the contract as evidence, wherein it and as
such can will be givengreat weight by the courts under the Rules on Eevidence. Without such
proof of the transaction, both the aggrieved buyer and seller, who will bear the burden of proving
cause of actions may be prejudiced.The sellerThe defendant can simply invoke that he or she did
not enter into anycContract of sSale withto the buyerother, due toin view of the absence
ofevidence of the contract on the part of the buyer who has burden of proof to assail that a
contract has been entered into. The fact that Since the transaction has been done online, by
electronic means, the seller can simply delete the data entered into, thus the buyer could beis left
without recourse.

3. Timeliness of making a refund

A refund is the money returned to a payer or the act of returning money previously
received. A refund usually refers to the reimbursement of funds to a customer for a product or
service provided, for reasons such as defects in merchandise or dissatisfaction with labor
performed.52

52http://www.investorglossary.com/refund.htm
31

Timeliness of making a refund is important. The above-mentioned sSpecial lLaws

abovementioned does not provide anything for the provisions regarding the timeliness of the
refund.
One of the common issues raised by the online buyers is regarding the refund, although
some sellers do providesthat for the right of the buyer has the recourse to a refund in case of a
defective product delivered and non-delivery of paid products purchasedsold items. However,
there is a need forof a specific provision of a law, regulating the same, and providing that refund
on the part if the buyer is a matter of right and cannot be simply ignored.

4. As to payment

In linewith this, the Bangko Sentral issued Circular No.542,sSeries of 2006,for

Consumer Protection for Electronic Banking which provides:

The Monetary Board in its Resolution No. 999 dated 11 August 2006
approved the following rules and regulations concerning consumer protection for
electronic banking (e-banking) products and services.

These shall govern the implementation of e-banking activities of the bank

for purposes of compliance with the requirements to safeguard customer
information; prevention of money laundering and terrorist financing; reduction of
fraud and theft of sensitive customer information; and promotion of legal
enforceability of banks electronic agreements and transactions.

In paying for the products purchased online, the following problem arises:
A. Hidden Charges
It is a common connotation perception that buying good online can be
cost-effectivesave as a lot of money; but this is not true at all times. One cCommon
issue is the charges added to the purchased price of the product. However, there is
no provision under the Consumer Act governing the hidden charges. It is willthebe
open tofor abuses on the part of the seller by not disclosing therein that an
additional payment is needed, this is mostly added to particularly with respect to the
32

delivery charges. Sellers wouldill merely post NO DELIVERY CHARGES which

would fall within the ambit of misleading advertisement assuming arguendo that the
buyer can invoke such prejudicial act as misleading advertisement, it will not be
that sufficient (faulty; fix this). A proper disclosure of charges must be made to the
seller given the fact that in any sale transaction, the fiduciary relationship between
the buyer and the seller is always present.
5. Regulation as to the disclosure of the information
A. As to the Product
Under the Joint DTI-DOH-DA Administrative Oorder No.1, series of 2008, Sec.5
(2)thereof also provides the duty of the seller to disclose not only the information or identity of
themselves but also the product they are offering to the consumers.
2.) Information about the products or services.rRetailers, sellers, distributors,
suppliers or manufacturers engaged in electronic commerce with consumers shall
provide:
2.1) fair, accurate, clear and easily accessible information describing the
products or services offered for sale such as the nature, quality and quantity
thereof;
B. As to the Parties
i.

Seller

The fiduciary nature in contract of sale is inevitable (use more accurate and appropriate
term). The credibility of the parties therein must be assured, the buyer must be mindful of the
transaction he is entering into, whether or not the seller is a legitimate one, given the fact that
they are only transacting without actually seeing the person behind such transaction, thus,
protection must properly be given to the buyer .
Under the Jjoint DTI-DOH-DA Administrative Oorder No.1 series of 2008 Sec.5, it is
provided that:
Section 5. Requirements for On-line Disclosure of Information.
1.) Information About the Retailers, Sellers, Distributors, Suppliers or
Manufacturers. Retailers, sellers, distributors, supplies or manufacturers
engaged in electronic commerce shall provide accurate, clear and easily
accessible information to identify themselves, which includes but not limited
to the following:
1.1) Department of Trade and Industry (DTI) and/or Securities
Exchange Commission (SEC) registration;

33

1.2) Name of the owner/proprietor of a retail establishment in case of a

single proprietorship and names of directors and other officers in case of a
corporation;
1.3) Principal geographical address of the retailer, seller, distributor,
supplier or manufacturer, and when applicable, of offices or agents in the
Philippines;
1.4) Website, e-mail address or other electronic means of contact,
telephone and fax numbers, of the retailer, and when applicable, of its offices
or agents in the Philippines;
1.5) Any relevant local or foreign government registration/license
numbers such as but not limited to the local government units permit to
operate, Taxpayers Identification Number (TIN), when applicable;
1.6) Contact details about any business association or organization
membership, when applicable.
1.7)Representative agent(s) in the Philippines for purposes of summons.
Doing business means earning income, and basically liable for business taxes, which can
be either Value-Added Tax (VAT) or pPercentage tax. Hence, you arebusinessesare required to
register with the BIR (expand acronym) and other agencies (like what?). Home-office can be
registered as business addresses, particularly the online shop, which is basically a home-based
business.
In the Philippines, businesses can usually be formed as a sole proprietorship, partnership
or corporation.Partnership and corporations are required to register with the Securities and
Exchange Commission (SEC), while sole proprietorshipsareis required to register with the
Department of Trade and Industry (DTI) for its trade name registration. The two most common
forms of companies in the Philippines are single proprietorship and corporation, although there
are also a number of Filipinos whobusinesses that operate register a company as a partnership.
(basis?)
Merely hHaving a certificate of registration from DTI doesnot make the business legal or
legitimate. It doesnot give the seller the license to operate as a business. Certificate of DTI
registration is only a registration of the Business or Trade Name. It only gives the permit to use
business name but not the permit to operate as a business until completion of registration with
other agencies, like the Mayors Office and BIR. (this is also quite true for corporations and
partnerships)

34

Thus, in an online transaction, the seller is mandated to provide the abovementioned

requirements; absence of such will create a presumption in the mind of the buyer or the
consumer that he is not a legitimate seller.
Given there is a presence of the abovementioned requirements, what is the determining
factor of the buyer that the said information are true and correct, one of the logical means is to
manually check to the DTI or to the SEC whether that certain seller is registered (fix this).
However, this is not practical one, doing so is such an inconvenience, the very essence of online
sale will be negated (fix).
Most of the online retailers provide in their online store only the words DTI
REGISTERED, without indicating therein the number or other reference indicators that they are
the legitimate sellers authorized by the government to do such business. Unlike the conventional
stores that they all are required to display in their principal place of business the DTI permits,
bBusiness permits and any other government-issued permits in order for the buyer to be assured
that they are transacting with the government authorized business establishment (fix this;
sentence fragment).
Thus, this requirement of law may be open tofor abuses. (how?)
ii.

Buyer

Undeniably, there is a law that provides and regulates the consumers protection,
primarily RA 7394, otherwise known as The Consumer Protection Act of 1992.However,
Let us place ourselves inthe shoes of considerthe seller that,who legitimately engages in the
business of online sales and complies with all the requirements prescribed by law.How can
itbe protected when there is no law regulating the information given by the buyer?In effect,
when placing orders on the internet, consumers are essentially anonymous, since there is no
face-to-face or one-on-one contact.Because the seller naturally has no awareness of the
actual physical identity of the consumer who is purchasing his or her products and services,
there is always the likelihood of transacting with fraudulent buyers or the so-called bogus
buyers.
Bogus buyeris the term of the sellers online for the scammers who would reserve for
the selling item over the internet, through text messages, and chat and the like. They would
reserve and arrange for meet you up with the seller at an agreedin a place where you agreed to
have your meet-up, or where you usually do meet-ups,and after all the waiting and wasting
time, that buyer would not show up! That is painful! That is an example of a deal with a Bogus
Buyer.53 (indicate if its direct quote; if not, fix it because it is too informal)
III.

PRIVACY

53http://antoniogoodmannews.blogspot.com/2010/06/beware-of-bogus-buyer-online.html
35

(indicate properly with marks if you are just merely quoting directly from your sources)
Trust is one of the most important factors in stimulating purchases over the internet.It is
the essential component of all successful buyer-seller relationships. However, there is a renewed
focus on trust when buyer-seller relationships are conducted through electronic media.54
Privacy has a strong influence on whether an individual trusts an e-commerce business. This trust
in turn influences the individuals behavioral intentions to purchase from or visit the site again.
Additionally, one of the most important factors in fostering trust in online transaction is the legal
and institutional framework within which it operates. A sound legal framework for online
consumers must have an effective level of consumer protection, the existence of which will be a
significant driver in the growth and facilitation of online sale. 55
RA 10173,or An Act Protecting Individual Personal Information In Information And
Communications System In The Government And The Private Sector, And Creating A
National Privacy Commission And For Other Purposes, enacted on August 15, 2012, applies
to the processing of personal information as it enunciated in Sec.3 (g) whereinit states
that Personal information refers to any information whether recorded in a material form or not,
from which the identity of an individual is apparent or can be reasonably and directly ascertained
by the entity holding the information, or when put together with other information would directly
and certainly identify an individual. (too long; fix)
In an online transaction, one of the issues raised is the disclosed information that has been can be
obtained and used through fraud and other acts fraudulent act that would prejudice the parties,
specifically the information disclosed by the buyer. Secs. 12 and 13 of RA 10173,Sec.12 and 13
giveprovide for the parameters on when and on what premise can data processing of personal
information be allowed, and its basic premise is when a data subject has given direct consent.
SEC. 12. Criteria for Lawful Processing of Personal Information. The
processing of personal information shall be permitted only if not otherwise
prohibited by law, and when at least one of the following conditions exists:
(a) The data subject has given his or her consent;

(b) The processing of personal information is necessary and is related to the

fulfillment of a contract with the data subject or in order to take steps at the
request of the data subject prior to entering into a contract;

54 http://www98.griffith.edu.au/dspace/bitstream/handle/10072/30094/59740_1.pdf?sequence=1
55 Ibid.
36

(c) The processing is necessary for compliance with a legal obligation to which
the personal information controller is subject;

(d) The processing is necessary to protect vitally important interests of the data
subject, including life and health;

(e) The processing is necessary in order to respond to national emergency, to

comply with the requirements of public order and safety, or to fulfill functions of
public authority which necessarily includes the processing of personal data for the
fulfillment of its mandate; or

(f) The processing is necessary for the purposes of the legitimate interests pursued
by the personal information controller or by a third party or parties to whom the
data is disclosed, except where such interests are overridden by fundamental
rights and freedoms of the data subject which require protection under the
Philippine Constitution.

Although there are criteria, and even law, that govern the processing of the information
disclosed by the buyers to the seller, still it is open to abuses. Sec.12(b) states that, information is
to be processed for the fulfillment of a contract. Disclosed information in online sales falls within
the ambit in this section, and it can be abused by the seller by simply raising that it would be
necessary in order to process a contract entered into between him and the buyer. There would be
no grant of security on the part of the buyer who will simply invoke that requiring the buyer to
disclose information would result to the speedy and effective transaction of the contract (fix).
Oftentimes, this privacy issue is raised when it comes to the disclosure of information
through payments throughby the use of credit cards.However, it the law does not specifically
provide for such, as the law covers all the information gathered, and thus, charging of penalties
for the tortfeasor will not be that easy because of the alibi that might be raised by the latter.
(vague; fix)
IV.

REMEDIES AVAILABLE

i.

Remedies provided under the New Civil Code

A. As to the Seller

37

1. Automatic rescission shall take place in the interest of the seller if the buyer, upon
the expiration of the period for delivery of the thing, (a) should not have appeared
to receive it, or (2) hHaving appeared, should not have tendered the price at the
time, unless a longer period is stipulated for its payment.56 The reason behind is
that the delay is prejudicial to the vendor since personal properties are not capable
of maintaining a stable price in the market.57 It applies only when the thing sold
has not been delivered to the buyer.
2. Specific performance or action for collection. As expressly provided under Art.
1595 of the New Civil Code, when the ownership of the goods has passed to the
buyer and he wrongfully neglects or refuses to pay for the goods according to the
terms of the contract, the seller may maintain an action against him for the price
of the goods.
3. And pPayment of damages, under Art. 1596 of the New Civil Code, when the
buyer wrongfully neglects or refuses to accept and pay for the goods.
B. As to the Buyer
1. In case of failure of seller to deliver, the buyer may seek action for specific
performance, without giving the seller the option of retaining the goods on
payment of damages.58
2. In case of breach of sellers warranty, the buyer may, at his election, avail the
remedies of (1) Recoupment, to accept or keep the goods and set up the sellers
breach to reduce or extinguish the price; (2) Accept the goods and maintain an
action for damage of warranty; (3) Action or counterclaim for damages; (3)
Rescission wherein the buyer will rescind the contract and refuse to receive the
goods; or if goods have been already been received, return them or offer to return
them and recover what was paid or any part of it concurrently with return or
immediately after it.59
ii.

Remedies provided under the Special Laws

56 Art. 1593 New Civil Code

57 DE LEON, Sales, supra at 384
58 Art. 1598 New Civil Code
59 Art. 1599 New Civil Code
38

Even if the business activity is only conducted online, there are four (4) Philippine laws that
maygovern the transaction. Andas there is aare lots of issues and technicalitiesy with regard to
online transactions, that may give arises to conflicts between the parties, the following are the
remedies that can be availed of by the aggrieved party.

1. Republic Act No. 8792, or the Electronic Commerce Act of 2000

This law provides for penalties on computer hacking, introduction of viruses and piracy
of copyrighted works of at least P100,000 and maximum commensurate to the damage incurred,
and imprisonment of six (6) months to three (3) years, among others. Promotes e-commerce in
the country, particularly in business-to-business and business-to-consumer transactions whereby
Business relations are enhanced and facilitated and consumers are able to find and purchased
product.(fix this paragraph) (cite)

2. DTI Department Administrative Order No. 8 , or Prescribing Guidelines for the

Protection of Personal Data in Information and Communications System in the Private
Sector

This governs data protection certifiers and processing of all types of personal data. The
intention of the guidelines is to encourage and provide support to private entities to adopt privacy
policies for the protection of the personal data in an information and communications system in
the private sector. (cite)

3. DTI-DOH-DA Joint Department Administrative Order (JDAO) No. 1, entitled Rules

39

and Regulations for Consumer Protection in a Transaction Covered by the Consumer Act
of the Philippines
The JDAO aims to protect consumers doing online transactions, specifically on the
purchase of products and services pursuant to the Consumer Act of the Philippines. It applies to
all retailers or sellers, whether located here or abroad, engaged in electronic commerce with
consumers. Moreover, it adopts the provisions of the Consumer Act on fair business practices
and the prohibition from engaging in false, deceptive and misleading advertisements. (cite)

To enable consumers to make an informed choice or /decision, the guidelines require the
online disclosure of accurate, clear and easily accessible information about the retailers or
sellers, the products or services being offered, and the terms, conditions and costs of the
consumer transaction. Also under the guidelines, retailers and /sellers are mandated to set up and
make operational internal complaint-handling mechanism for consumer complaints, without
prejudice to the rights of the consumers to seek legal redress. (cite)

Aside from this, it also provides procedure or structure address or /resolve a complaint
filed before concerned implementing agencies (i.e., DTI, DA and DOH). As to a consumer
transaction involving a Philippine resident consumer and a retailer or seller of another country,
said consumer has the option to file his complaint either with the Philippine trade/consular
office/embassy therein or directly with the foreign government agency or regulator where the
retailer or seller is located with the assistance of the counterpart Philippine government agency
concerned. (cite)

Given that remedies are available, still the enforcement of the sameitcan is not effectively
be done.There still are lots of complaints over the internet blogs regarding fraud, non-delivery,
disclosure of information, hidden charges, defect in the products purchased and the like without
knowing where is the proper fora to the address their concern, and thus, it just lapse into time and
they are left without recourse. Proper governmental agencies, must educate the consumer on how
to address their complaint, by doing so, the prevention of online offenses will be reduced and
the offenders will be punished accordingly, (fix paragraph) (cite source if necessary)

40

V. RECOMMENDATIONS AND CONCLUSION

(make sure that you summarize and include the recommendations you made above)

Onlinesales is undeniably convenient for all the consumers.engaging in this transaction,

Hhowever there are problems facing this kind of transaction. This paper discussed the problems
arising from online sales, and the individual risks that both the buyer and the seller are facing
ofconfronted with. First, the lack of information or misinformation by the seller. B, by the nature
of online sale, the buyer cannot see nor examine the goods they are purchasing, the merely rely
on the description and pictures given by the seller, and when it comes into their doorstep, it lacks
quality they are expecting as provided in its product description, fake items were also delivered
to the buyer, and they left without recourse upon paying and delivering the goods (too long; fix).
Second, the cancellation of orders. I, it seems to be a right of a buyer to cancel his placed order
within a specified time, but there is no provision of law regulating the right to cancel the placed
order, some online stores provides for a cancellation option, but most of the online sellers does
not provide for such (too long; fix). This cCancellation process must not simply be a matter of
discretion on the part of the seller in order to prejudice the buyers. Thirdis,iInformation.,While
tthere is a law governing information to be disclosed by the seller, but this does not satisfy the
information needed by the buyer in order to assure himself that a certain seller is a legitimate one
and the product is really what he is looking for. And another issue with regard to information is
the lack of law mandating the buyer to provide certain information for the protection of the
seller, so that the so-called bogus buyer can at least be prevented from their fraudulent desires.
Fourth, as to the privacy issue which is the common concern of the parties in this transaction
process, access to the accounts in case of payment, and the other information that may transgress
by other party, specifically the addresses given by both. Thus, Online Sale is not without
problem, its eitherboth fromon the side point of view of the buyer andoron the seller.,however
However, the available laws seem tilted in favor of the buyer alone. On the contrary, the, laws
must be in favor of both parties.
It has been argued in this paper that the rise in the use of online shopping has presented
the community and the law with a number of vital challenges regarding consumer protection.
The author has argued that the following areas and aspects are either inapplicable or, if
applicable, arenot inadequate to provide the consumer and the seller in the digital
environment,and thus, presenting many legal challenges to be found.
First, the conventional law of the New Civil Code, specifically Law on Sales, is the
fundamental law that governs our contract of sale, the transaction we are entering into in relation
to any kind of sale is governed by the said law (vague; fix sentence; use third person). Basic is
the rule that in entering into a contract, we must ascertain first whether is has been perfected or
not, and the three elements are needed in order to create a perfected contract, (1) consent of the
41

contracting parties; (2) object certain which is the subject matter of the contracting parties; (3)
the cause of the obligation which is established (fix; use third person). However, the question
arises as to when it is consider as a valid offer, in connection with the advertisement, in order to
come up with a perfected contract, in applying the provisions under the New Civil Code into
online sale transaction, there are diversions into the said law, and in order to come up with a
perfected contract of sale (too long; fix). Thus, analyzing the transaction, the conventional law,
its basic concept is not applicable. (fix)
Second, the special laws enacted by the legislature are still insufficient to protect the both
parties. Basically, the enactment of Consumer Protection Act benefits is for the
consumersthemselvesonly; the enactment of the Ee-commerce Aact is for the recognition of the
usage of the electronic means in connection with commercial transactions;, and the Ddata
Privacy law, is for the protection of the data disclosed needed for the transaction. In analyzing
these special laws, consumers are rightly given the protection.,however it But the protection is
not adequate, , itand does not cover all the concerns of online transactions.,Hence, abuses therein
is rampantare highly likely. On the part of the sellers, protection must also be given, we are all
aware on how the internet works, how the people can easily commit fraud (fix; use third person).
Bogus buyers are also numerous in this kind of transaction and laws must be upheld in favor also
of the seller.
Third, assuming that laws sufficiently coverall the aspects of the online transaction, law
must be reinforced or the existing laws enforcement measures must be strengthened to ensure
that consumers have effective protection when engaging in electronic commerce. Enforceable
undertakings must be the most effective way to improve and enforce compliance with in light of
the existing consumer protection laws. In enforcing the existing laws available, agencies must
also make a concerted effort to enforce existing laws stringently against the online users or to
those parties entering into transaction trough electronic means who willfully and flagrantly
ignore the law. However, in the enforcement by the proper agency of the laws provided,
regulation must first be observed, this is one of the problem that proper agencies encounter, i.e.,
how can a business establishment can be regulated when at the first instance it is not registered.
Furthermore, the most important is the consumer education and it should always be
upheld.;Eeducating the consumers about the risk of online shopping will increase the general
understanding of the nature of the transaction and will result to awareness.
Based on the problems facing the online sale transaction, the author suggests that the
means to solve the problem effectively and adequately is to mandatorily require all the online
seller to register all their online business,and thisand must be a mandatory requirement, a must
be issued licenses must be given to them, in doing so.,Rregulation can be done easily,and the
buyers can easily be informed as to know whether or not the seller he is engaging intotransacting
42

with is a legitimate one. Furthermore, complaints can be addressed to the proper fora or the
proper government agency before resulting into a court action.,Tthere must be first bean
immediate remedy that can be resorted to by the aggrieved party,and not justsuch that the latter
may not just be helpless and would just ratherby raisingresort toit to the public complaint boards
over the internet to air their grievances, but without doing any concrete legal consequences
action.The available laws enacted by the legislature must be reviewed and amended in order to
facilitate all the issues concerning online transaction, because all those laws does not cover all
the stages of the transaction process, and there are certain areas in the transactions that can be
used to defraud the parties involved.

Check your sentences; you tend to lump several statements into a sentence, which
sound awkward and ungrammatical; please break them down to separate
sentences.
Check words that are unnecessarily capitalized, and those that need to be
capitalized but are not so capitalized
Use third-person account (no you, we, I, etc.)

43