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Law in the Virtual World

Atty. Gerard Nelson Manalo and Christian Andrew Labitoria Gallardo; Paladins of Law.

"Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window, or when you turn on your television. You can feel it when you go to work, when you go to church, when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.

Neo: What truth?

Morpheus: That you are a slave. Like everyone else, you were born into bondage, born into a prison that you cannot smell or taste or touch. A prison for your mind.”

Avid fans of sci-fi movies know this line too well from The Matrix. It revolutionized the genre itself, dealing with an alternate reality that has a very thin line to that of our "reality". Another equally essential sci-fi movie had the misfortune however of being released within the same period as The Matrix- The eXistenZ. It deals with the creation of a pod which connects directly to the nervous system through the spinal cord, thereby creating a virtual reality game which depends on one's memories, fears, traumas and inhibitions. We all know which among The Matrix and The EXistenZ became a huge hit.

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On the daily basis however, while we do not deal with such an extreme game to create an alternate reality, we create our own virtual identity through the use of information systems. Several legal questions arise: Will my acts through the use of information systems be binding? If so, how can it be proven in court?

Are electronic data messages and electronic documents binding?

The E-Commerce Act gives legal recognition to electronic data messages, electronic documents, and electronic signatures.[1] It is binding on a person in the same way that acts done and words uttered in the physical world binds him. More than that, it allows the formation of contracts in electronic form.[2] Provided that there was a perfected agreement between the parties, it is enforceable although made online and not evidenced by a hard copy.

Let us say that I saw an ad in Facebook Marketplace for a 1960s Tudor Big Rose watch. Since I have been looking for that watch for some time, I immediately messaged the seller “mine for P 30,000”. Seller then accepted my offer (what a steal would that have been!) and marked the listing as “sold”, with the payment to be made via Gcash. Would that bind me even if it was all made through the use of facebook, and even if I neither of us asked for a proof of identity of each other? Yes. Such would be a valid contract under the E-Commerce Act.

Suppose I immediately made the payment via Gcash as agreed upon, but after sending a screenshot to prove such payment, the seller then blocked me. Can I file a case against him? Definitely. Since it is a valid and legally enforceable transaction, it can be made a subject of a court action. The strength of the case however will have to depend on the quantum of evidence to prove the identity of the seller, the existence of the contract of sale between us and the failure of the seller to deliver my adorned 1960s Tudor Big Rose despite payment.

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Can electronic data messages and other electronic evidence be introduced in court?

The E-Commerce Act recognizes the legal effect of electronic data messages.[3] It likewise recognizes electronic documents as the legal equivalent of paper documents, and electronic signatures as the legal equivalent of handwritten signatures.[4] That being said, screenshot between the seller and I can be introduced in court to prove that there was indeed a transaction. Similarly, the screenshot of the Gcash receipt may be introduced to prove payment.

What is usually difficult to prove in digital transactions however is the identity of the other party. The digital field is, in a sense, an alternate reality where another identity can be taken without any difficulty. Signing up for a new gmail account takes only a few minutes, without any verification if the name used therein is remotely similar to the name appearing in the birth certificate or any government IDs. The same gmail account may be used to create a facebook profile, again without verification on the part of facebook if the name and the photos being used are indeed that of the person’s. For digital transactions therefore, the law recognizes the validity of Electronic signatures.

What are electronic signatures and how can it be proven?

Electronic signatures are any distinctive marks electronically affixed in a electronic document, which remains unaltered.[5] It is recognized as a “functional equivalent” of a physical signature[6] which similarly establishes the identity of a person.[7] Like the typical signature, it need not be in the initials of a person as long as it is the customary mark used to identity a person.

Given that it may still be forged, some requires a digital signature as a stronger level of protection. A digital signature is a subset of e-signatures which are duly registered and certified by an authority to be authentic. In the Philippines, the Philippine National Public Key Infrastructure (PNPKI) is the government authority which issues digital signatures and allows one to authenticate the digital signature of others. Once registered, a serial number shall be issued, just like any other official ID.

Going back to my case, while I can prove the transction and the fact of payment, I may have a difficult time to prove the identity of the seller, especially if his facebook profile is bereft of any photos or identifying marks to manifest his identity. Well, a P 30,000 for a Tudor Big Rose is too good to be true.

In the beginning, I talked about the movie eXistenZ. It is a macabre and gruesome movie, to put it mildly, as it involves death on different levels of "reality". The ending, as usual for sci-fi movies dealing with alternate realities, is that the main characters are equally confused as to whether or not they are already living in the "real" world, and whether or not they can still kill who they thought of as "deceivers". It is a very interesting movie. Really. What is equally "real" as well is the fact that our dealings online can legally bind us, and we must, as in our physical dealings, be careful with it. Another thing “real” is the free legal advice and updates that we offer through our facebook group Business and Labor Forum. Check it out at the link below.

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Atty. Gerard Nelson C. Manalo, has been working with Atty. Pol since 2013. He graduated at Far Eastern University Institute of Law and passed the 2017 bar examinations. He is a junior partner at the Sangalang & Gaerlan, BusinessLlawyers since June of 2018 and he has been handling litigation, labor and business laws and cases. He may be contacted at His mobile number is 09778233825.

He was assisted by Christian Andrew Labitoria Gallardo, a recent graduate of the Ateneo School of Law with a Juris Doctor degree, and is currently an associate of the Sangalan and Gaerlan, Business Lawyers, a law firm specializing in labor, corporate and business law. You may reach him through a phone call or message (09157042132) or via email (

[1]§ 6 to 13, RA 8792. [2] § 16, RA 8792. [3] § 6, RA 8792. [4] §7, RA 8792. [5] § 7 (a) RA 8792. [6] Rule 6 § 1, Rules on Electronic Evidence. [7] § 5 (e), RA 8792.


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