The Principle of Functional Equivalence in E-Contracts: Not A Simple Matter of Form?

By Atty. Oscar G. Raro

“…. but the best of laws, when not faithfully enforced become mere souvenirs of good intentions.”

Arturo M. Tolentino
Voice of Dissent, p. 25 [1990]

I. Introduction

While erstwhile senator Arturo M. Tolentino made the observation then in reference to the passage of the Anti-Graft Law, he may just as well be divining our wholesale engraftment of international electronic commerce laws (1) into our municipal laws. The process sometimes unwittingly imports a practice yet unsettled, incorporates a term yet unfamiliar, and prescribes rules of conduct for courts and litigants, who are yet to be initiated. For those few who have working knowledge of electronic commerce, we have one-eyed kings in the valley of the blinds; not a bright equalizing prospect for those who cannot see when a new light is shown as source of a right or action in our statute books or as a ground for state intervention in the realm of private rights.

The law defines an “electronic document” as “[i]nformation or the representation of information, data, figures, symbols or other modes of written expression, described or however represented, by which a right is established or an obligation extinguished or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically.” (2) One will note that the only substantial difference between the conventional written document and an electronic document is in the manner of storage, retrieval, and transmission. Both originated as a written document; an electronic document is first written in “pen and paper” (3) and thereafter scanned or directly written and encoded into the computer. A written document is, however, transmitted by physical delivery, while an electronic document is transmitted electronically. The various advantages of considerable speed in transmission, storage, and retrieval in the latter are what forced us to encourage the use of electronic documents, not only for non-commercial and private uses, but also for commercial and legal transactions.

Inherent, though, in the nature of a document being electronic, and being transmissible electronically across various jurisdictions, are the facts that the parties to an electronic contract may not even physically see each other to determine legal capacity; that the law on contracts varies across different fora, (4) and that personal jurisdiction is incarcerated by the rigidity of territoriality. Thus, by the very nature of electronic documents as “face-less” transactions, issues on their validity, enforcement of their provisions, and venue of action, among others, become legitimate concerns which are not only important to litigants and to the courts, in particular; but also to the future of electronic commerce itself, in general. Are we now, in hopelessness, resigned to the proposition that engaging in electronic transactions presents nothing more than a Hobson’s choice: take it with its pitfalls, loopholes, and dangers; or leave it with the prospect of concluding transactions at a snail’s pace that opportunities may be lost and businesses left behind by their failure to conform?

This paper attempts to unravel some provisions of the Electronic Commerce Act (5) on contracts under the principle of “functional equivalent”, which, to the author, may be fecund sources of legal problems and proposes possible solutions to such perceived problems within the existing legal infrastructure. In short, this is an initial attempt to resist the fate of the E-Commerce Act from being “mere souvenirs of good intentions,” at least, insofar as electronic documents as contracts are elevated as the functional equivalent of paper agreements.

II. The Question of Legal Capacity of the Contracting Parties

In mandating the recognition of electronic documents, the law states that “[f]or “evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.” Hence, except for the rules on authentication and best evidence, the E-Commerce Act “does not modify any statutory rule relating to the admissibility of electronic data messages or electronic documents” (6) and that no provision of the law shall apply “to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.” (7) Clearly, what we have here is a fiat of adaptation where the existing legal frameworks on contracts and their years of jurisprudence which naturally addressed issues pertaining to paper documents are being hewed wholesale in the hope of their workability to address novel issues engendered by electronic documents. When the law looks at electronic documents as merely a matter of form (functional equivalent), is not the law trying to fit a square peg in a round hole in the process? Let us see.

In contracts on paper, the parties usually meet and sign to conclude the agreement. If the document necessitates notarization, the parties, including their witnesses, physically appear before the notary public and swear that they voluntarily signed the document. In the process, determining legal capacity of the parties becomes immediately ascertainable by physical presence. In an electronic commerce environment, contracts may be perfected in various ways without the parties even seeing each other. This is so because there are various modes of electronic transmission and communication via the Internet, the more significant of which are:

1. Electronic Mail or E-mail. – where an individual is permitted to send an electronic message to another individual to communicate; (8)

2. Listservs or Chat-rooms. – listservs or electronic bulletin boards are where forums for individuals to discuss particular topics are provided where they can “post” messages for others to read. Chat-rooms are similar in the sense that a forum is likewise provided where individuals have real-time dialogues as each person types messages that are immediately seen or viewed by other individuals in the chat room; (9)

3. World Wide Web. – where intercommunications between a Web page and an individual who visits that page is allowed by permitting the individual to “navigate” the site through links and buttons to access additional texts and graphical material. (10)

4. Electronic Data Interchange (EDI). – where a “computer-to-computer transmission in a standardized format” is allowed. (11)

Doubtless, under the E-Commerce Act, all of these modes of transmission, individually or in combination, may be used, at least in intendment, to perfect a contract or create an agreement. These modes provide no way by which the parties may determine each other’s legal capacity to sign or enter into agreement. Worse, there is also no way of determining whether the person represented in the document is indeed the person who actually initiated and perfected the contract. The situation becomes bloodier in EDI where computers act merely as electronic agents for the formation of an agreement without human intervention. Do computers have legal capacity to enter into contracts as electronic agents of their principal whose humanity is at best presumed? Thus, merely elevating the status of electronic documents as the “functional equivalent” of a paper documents loses sight of the fact that electronic documents are not really the equivalent of paper documents what with their relatively phantom nature and manner of generation and transmission. In short, what we did in this jurisdiction is take the law off the peg without regard to how it will fit in our current legal infrastructure.

In Philippine jurisdiction, legal capacity to contract is determined by the ability of the parties to give valid consent. (12) Thus, unemancipated minors, insane or demented persons, and deaf-mutes who do not know how to write, cannot give consent to a contract. (13) The incapacity brought about by insanity, dementia, or deaf-muteness does not seem to pose any problem since electronic transactions, by their nature, require a certain level of computer literacy. Otherwise stated, a demented person or a deaf-mute who does not even know how to write may not even be expected to transact business in the Internet. Minority, however, is a serious concern, minors being, more often than not, more adroit in computer operation and internet “surfing” than most adults and it is here when the contracting parties would have no way of even assessing the minority of the other, and therefore, his legal capacity, the transactions being face-less. Thus, when later, after the electronic contract was formed and obligations created, may a minor repudiate the agreement simply on the ground of lack of capacity to contract by reason of his own minority?

In Mercado vs. Espiritu, (14) a decision rendered in 1917, the Supreme Court upheld the validity of a contract of sale entered into by a minor when he misrepresented his age:

“The courts, in their interpretation of the law, have laid down the rule that the sale of real estate, made by minors who pretend to be of legal age, when in fact they are not, is valid, and they will not be permitted to excuse themselves from the fulfillment of the obligations contracted by them, or to have them annulled in pursuance of the provisions of Law 6, title 19, of the 6th Partida; and the judgment that holds such a sale to be valid and absolves the purchaser from the complaint filed against him does not violate the laws relative to the sale of minors' property, nor the juridical rules established in consonance therewith. (Decisions of the supreme court of Spain, of April 27, 1860, July 11, 1868, and March 1, 1875.)”

What militates against the invalidity of the contract in Mercado is the minor’s bad faith in misrepresenting himself to be of majority age. Without such misrepresentation, the contract will be unenforceable if both parties are incapable of giving consent for reason of minority (15) and annullable or voidable if only one party is incapacitated by minority. (16) When there was no attempt to actively misrepresent a party’s age, the validity of the contract remains suspect. This much was clarified in Bambalan v. Maramba (17) where the Supreme Court qualified Mercado in this wise:

“As regards this minority, the doctrine laid down in the case of Mercado and Mercado vs. Espiritu (37 Phil., 215), wherein the minor was held to be estopped from contesting the contract executed by him pretending to be of age, is not applicable herein. In the case now before us the plaintiff did not pretend to be of age; his minority was well known to the purchaser, the defendant, who was the one who purchased the plaintiff's first cedula to be used in the acknowledgment of the document.”

What we have here, therefore, are settled jurisprudence from the distant past to solve the imminent problems of the near future: an electronic contract entered into by a minor who misrepresented his age is annullable. This jurisprudence on minority applies with equal force to electronic contracts, the “functional equivalent” of a paper agreement. The application of Mercado, however, may easily be determined if, in this jurisdiction, it may be made as a requirement that contracts concluded electronically must impose as condition a certification as to the age of the parties. This way, the issue of whether the misrepresentation is active or passive may easily be disposed of by the court regardless of the actual minority of the party involved.

III. The Issue of Personal Jurisdiction

By its very nature, the activity of electronic commerce traverses physical and geographical boundaries. Thus, somebody in the Philippines may order books from, say, Amazon.com (18) and audio compact discs or DVD movies from CDNow (19) which are principally based in the United States, but may be contacted and contracts concluded with any of its various electronic sites in other countries. As the perfection of the contracts may be made in one country, concluded in another, and delivery made and payment transmitted across various fora, a single transaction may be subject to the jurisdiction of various courts.

It is sad that during the deliberation of the E-Commerce Law, the provision on jurisdiction was dropped. (20) As then proposed “an electronic contract … shall indicate the jurisdiction whose laws apply to that system or whose law shall apply to the contract” in that “[i]n the absence of such indication, jurisdiction over the contract shall be acquired in accordance with existing laws.” (21) The hurdle to this proposed provision on jurisdiction then was that there was no existing law to determine the jurisdiction of electronic commerce transactions in the Philippines in the event that the parties failed to indicate the applicable jurisdiction in the contract. (22) Thus, instead of amending the provision on jurisdiction, the Bicameral Conference Committee of Congress abandoned courage for convenience: Simply drop the provision altogether instead of resolving the issues which may possibly arise in the law’s implementation. Thus, what we have now is a mongrel of a law which does not indicate how jurisdiction may be acquired as the electronic transaction is concluded across borders. Obviously, at least under the current state of the law in this country, court located in one jurisdiction could not exert its authority and power over a party residing outside of its territorial jurisdiction.

That said, the development in American jurisprudence provides some hope for extraction from this quagmire of procedural law. The initial salvo against the rigidity of territoriality as basis of jurisdiction was fired in 1945, in International Shoe Co. v. State of Washington, (23) where the Supreme Court of the United States advanced the doctrine of “minimum contacts” as sufficient to confer personal jurisdiction to courts so long as the party involved engaged in continuous activities within the court’s jurisdiction even without actual and physical presence by the party involved.

Through the years, this doctrine has been qualified, restricted, and expanded. In 1977, Shaffer v. Heitner (24) reaffirmed the doctrine of “mimimum contacts” when it concluded that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.” In 1980, World-Wide Volkswagen Corp. v. Woodson, (25) stated that “advanced means of distribution and other commercial activity have made possible modern methods of doing business, and have largely effaced the economic significance of State lines … removing much of the difficulty and inconvenience formerly encountered in defending lawsuits brought in other States” even while it qualifies “minimum contacts” to apply only when the contact with the forum is substantial enough for the defendant to “reasonably anticipate being haled into court there.” In 1987, Asahi Metal Industry Co. v. Superior Court of California (26) introduced the “stream of commerce” argument to limit personal jurisdiction even if the defendant is aware that its products will likely end up in the forum.

The query here is this: may Internet transactions qualify as “minimum contacts” to confer personal jurisdiction to courts where the transaction or any of its components occur? There seems to be discordant voices from different courts in their attempts to address the question. First, some courts asserted that personal jurisdiction is conferred: by the expediency of mere use of the Internet to transfer and sell goods within a particular jurisdiction or forum, or mere transmittal of e-mail messages into the forum concerning its business; (27) or by the act of advertisement and actual sale of products in the forum. (28) Second, other courts have ruled that use of the Internet alone is not sufficient to satisfy the minimum contact requirement. Thus, Internet websites that merely served as the defendant’s advertisement tool that were not intended for national audience even while accessible nationwide, may not be sufficient to confer personal jurisdiction where those advertisement are read or downloaded. (29) Third, several cases demand analysis synthesizing the previous two holdings mentioned above with particular attention to the manner by which a defendant uses the Internet. (30)

Whatever may be the merits of each approach to determine personal jurisdiction, the vacuum left out by the E-Commerce Act on jurisdiction may be filled by these growing body of American jurisprudence.

IV. The Statute of Frauds and Public Documents

The term "Statute of Frauds" refers to statutes which require certain classes of contracts to be in writing as a precondition for their enforceability. (31) The Statute is one that regulates formalities but does not deprive the parties the right to contract with respect to the matters therein involved. “The purpose of the statute is to prevent fraud and perjury in the enforcement of obligations depending for their evidence on the unassisted memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced by a writing signed by the party to be charged.” (32)

There seems to be no issue that when an electronic document is reduced into a hard copy and its authenticity affirmed by the parties, the document is deemed written in the context of the Statute of Fraud. The issue is whether per se, such document in its electronic form or in its paperless state, perceivable merely in computer monitors and existing only in computer memory, may be considered “written.” In that digital state, the document is nothing but a continuous stream of electrons or a long string of binary code cached in memory and processed by a program that enables one to view the information. (33) When this information is converted into a perceivable and understandable form, the information exists as a “record.” Note, that under the Statute of Fraud, the “writing” referred to need not be a formal document, but may constitute ”some note or memorandum,” provided it contains the “essential elements of the entire agreement;” (34) some sort of a “record” for all intents and purposes. May this “note, memorandum, or record” in its unprinted state qualify as a “written document” for purposes of the Statute of Fraud?

The E-Commerce Act seems to provide the answer with its definition of electronic document:

“Electronic document” refers to information or the representation of information, data, figures, symbols or other modes of written expression described or HOWEVER REPRESENTED, by which a right is established or an obligation extinguished or by which a fact may be proved and affirmed which received, recorded, transmitted, stored, processed, retrieved or produced electronically.” (35)

Thus, here, an otherwise “written expression” represented in whatever form will qualify as an electronic document entitled to be treated as the functional equivalent of a written document. (36)

In American jurisdiction, the resolution of this issue was rather straightforward upon the passage of the Uniform Computer Information Transactions Act (UCITA) (37) when instead of using the word “written,” the concept of “record” (38) was introduced. In the process UCITA improved the American concept of the Statute of Fraud. Hence, if a record indicates that a contract was formed and reasonably identifies the subject matter of the transaction, the “record requirement” (no longer “written requirement”) is satisfied under the Statute of Fraud. Thus, electronic documents in paperless state, if capable of being perceived, will qualify as a “record.” (39)

Also, for certain documents, such as notarial will, (40) sales of real property, power to administer property, or cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains, among others, are required to appear in a public document. (41)

Sadly once again, the E-Commerce Act was silent on the mechanics of reducing an electronic document into a public document. Instead, our lawmakers opted to pass on to the Supreme Court the responsibility of crafting electronic notarization and licensing of “cybernotaries.” (42)

Notarization, at least, at the current state of our traditional law on contracts, involved five (5) components: personal appearance, identification of the parties, determination of willingness, legal competence, and affirmation by the signer. Immediately, insistence upon compliance with these requirements is self-defeating in electronic contracts where parties may involve computer-to-computer transactions, remote geographical locations of the parties, and jurisdictional authority of the notary delimited by geographical territory, among others. Thus, this is one area of electronic commerce when the traditional modes and practice will simply not fit. This is where our E-Commerce Act has committed an egregious sin of omission. At the very least, it should have provided for the minimum standards by which presence before a notary may be substituted by some form of authentication or certification method or that digital signatures may operate to dispense with notarization altogether.

Common sense dictates that if a law on electronic commerce provides for electronic signature as sufficient to substitute for physical signatures, it is an anomaly to require “electronic signing” to be done in the presence of a notary for those contracts required to be in public documents or for the law to be silent on how public document may be executed in an electronic environment. At the very least, the law should have taken out public documents as outside its coverage; some sort of a “limiting scope” to make matters clear on things which the lawmakers themselves cannot resolve. (43)

Alternatively, the law should have been anticipatory. With the speed by which developments in computer science and digital technology move by leaps and bounds, the law should have provided that a digital signature (not electronic signature) attached to the document would have been sufficient to qualify the document as notarized or public. This is so because a digital signature provides for three levels of authentication which emulates the signature and notarization systems in the paper-based world. The first level of authentication arises from the digital signature itself where, like a manually-signed signature, a digital signature is unique and identifiable to the sender which shows that the signer has read the document and has affixed his signature to indicate his consent. The second level provides a notary function where the document is encrypted with the sender’s private key. And finally, the digital signature provides the means of preventing unauthorized alterations of the document by incorporating a message integrity code (“MIC”) computed to yield a “checksum” quantity unique to the particular combination of letters and spaces in the message at the time of transmittal. In short, a digital signature scheme is an authentication mechanism where the recipient of a message may forward it to a third party and prove irrefutably that the document has not been manipulated from the time the author sent it. (44)

Having said all that, the query here is whether an electronic document which is required under our laws to be notarized, but not so notarized, will retain its validity or binding force and effect? In certain cases, such as in donation of immovable property, validity is made dependent upon its execution in a public instrument, “specifying therein the property donated and the value of the charges which the donee must satisfy. (45) Acceptance, if made separately must likewise be in a public document. (46) In certain instances, however, such as in the sale of immovable property, its binding effect could not be impugned by the failure of the parties to reduce the same in a public instrument, “the necessity of a public document [being] merely only for convenience, not for validity or enforceability.” (47)

V. Conclusion

What we have here is a situation when the law precedes practice. But if “[t]he life of the law has not been logic, [but] has been experience,” (48) what we have here is a dead E-commerce law, if we are to take Holmes’s admonition at face value. But as shown, even while tight at times, our current body of law and jurisprudence, at least on contracts, may be made to fit the demands for precedence. After all, such contracts should not be discriminated to be less than any written instrument, they being their “functional equivalent” in most respects. This is how things should be if we are to disabuse our minds from a nagging suspicion that even the enactments of ours laws are dictated by diplomacy, to put it kindly; or forced by weakness, to put it recklessly. That said, the author hopes that our object has not been “to make a bouquet of the law” (49) for the delight of the international community. Either we “plant its roots where they will grow,” and later pruned, grafted, and nurtured by the substances of our experience and culture or we see it lying dead before us on the printed page, a perished “souvenirs of our good intentions,” at best; or an attestation to our mendicant foreign policy, (50) at worst. Even pride in the art of mimicry will not allow us to duplicate the fire lest we burn.

Endnotes:

(1) The Electronic Commerce Act is substantially patterned after the United Nations Commission on International Trade Law (UNCITRAL) Model Law (Vicente B. Amador, The E-Commerce Act and Other Laws@Cyberspace 9 (2002 ed.)

(2) Id. Section 5 (f).

(3) A phrase used by W. Harry Thurlow to differentiate a physical written document from an electronic document (W. Harry Thurlow, Electronic Contracts in the United States and the European Union: Varying Approaches to the Elimination of Paper and Pen, 5 Electronic Journal of Comparative Law [November 2001] available at http://www.ejcl.org/53/art53-.html [last visited 5 February 2006])

(4) Singapore’s Electronic Transactions Act (ETA) does not cover sale of immovable properties, powers of attorney, wills, negotiable instruments, and documents of title which are contracts required to be made in writing and signed by the contracting parties.

(5) Republic Act No. 8792.

(6) Id. Section 7

(7) Id. Section 7, par. (c), (ii); Also Implementing Rules, R.A. 8792: “Section Solemn Contracts. No provision of the Act shall apply to vary any and all requirements of existing laws and relevant judicial pronouncements respecting formalities required in the execution of documents for their validity. Hence, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract is proved in a certain way, that requirement is absolute and indispensable.”

(8) Kent D. Stuckey, INTERNET AND ONLINE LAW § 1.02 [4] [e]

(9) David J. Loundy, L.J. SCI. & TECH. 79 (1993)

(10) Kent D. Stuckey, INTERNET AND ONLINE LAW xvi

(11) John P. Fischer, Computers as Agents: A Proposed Approach to Revised U.C.C. Article 2, 72 IND. L.J. 545, 547 (1977)

(12) Article 1318, CIVIL CODE

(13) Id. Article 1327

(14) 37 Phil. 215 (1917); Also Sia Suan v. Alcantara, 85 Phil. 669 (1950)

(15) Article 1403 (3), CIVIL CODE

(16) Article 1390 (1)

(17) 51 Phil. 417 (1928; Also Braganza v. De Villa Abrille, 105 Phil. 456 (1959) where it was held that passive misrepresentation of a minor does not amount to estoppel to prevent him from repudiating an agreement, Mercado being a case which involves active misrepresentation by the party who is a minor.

(18) http://www.amazon.com/gp/
homepage.html/ref=tab_gw_gateway
_1/104-4062245-2227121

(19) http://www.amazon.com/exec/
obidos/tg/browse/-/3023481/
ref%3Dtab%5Fm%5Fgw%5Fl/
104-4062245-2227121

(20) Jesus M. Disini, Jr., THE ELECTRONIC COMMERCE ACT 13-14 (2001 ed.)

(21) Section 26, House Bill No. 9971

(22) Disini, supra. at p. 14

(23) 326 U.S. 310 (1945)

(24) 433 U.S. 186, 209 (1977)

(25) 444 U.S. 286, 293 (1980)

(26) 480 U.S. 102 (1987).

(27) CompuServe, Inc. v. Patterson, 89 F. 3rd 1257 (6th Cir. 1996).

(28) Gary Scott International, Inc. v. Baroudi, 981 F. Supp. 714, 716 (D. Mass. 1997); Digital Equipment Corp. v. Altavista Tech. , Inc., 960 F. Supp. 456, 465-466 (d. Mass. 1997); Maritz v. Cybergold, Inc., 947 F. Supp. 1328, 1330, 1333-1334 (E.d. Mo. 1996).

(29) Cybersell, Inc. v. Cybersell, Inc., 130 F. 3d 414, 419-420 (9th Cir. 1997); Bensusan Restaurant Corp. v. King, 126 F. 3rd 25, 27, 29 (2d Cir. 1997); SF Hotel Co. v. Energy Investments, Inc. 985 F. Supp. 1032, 1036 (D. Kan. 1997), among others.

(30) Zippo Mfg. Co. v. Zippo Do Com, Inc. 952 F,. Supp. 1119, 1124 (W.D. P. 1997; Weber v. Jolly Hotels, 977 f. Supp. 327, 333 (D.N.J. 1997)

(31) Article 1403, CIVIL CODE

(32) Torcuator v. Bernabe, G.R. No. 134219, June 8, 2005; Tolentino, IV CIVIL CODE OF THE PHILIPPINES 580 (1973 ed.)

(33) “If you open a binary file in a text editor, each group of eight bits will typically be translated as a single character, and you will see a (probably unintelligible) display of textual characters. If you were to open it in some other application, that application will have its own use for each byte: maybe the application will treat each byte as a number and output a stream of numbers between 0 and 255 — or maybe interpret the numbers in the bytes as colors and display the corresponding picture. If the file is itself treated as an executable and run, then the computer will attempt to interpret the file as a series of instructions in its machine language.” (Wikipedia, Binary File, http://en.wikipedia.org/wiki/Binary_file (last visited 14 April 2006)

(34) Yuviencio v. Dacuycuy, G.R. No. 55048, May 27, 1981: “To put it the other way, under the Statute of Frauds, the contents of the note or memorandum, whether in one writing or in separate ones merely indicative for an adequate understanding of all the essential elements of the entire agreement, may be said to be the contract itself, except as to the form.”

(35) Republic Act No. 8792, Section 5 (f)

(36) Id. Section 7

(37) Formerly Article 2B of the Uniform Commercial Code (UCC 2B).

(38) Section 201, UCITA

(39) Id. § 102 (a) (54): “Record” includes any stored information that is “retrievable in perceivable form.”

(40) Article 805, CIVIL CODE

(41) Id. Article 1357

(42) Disini, supra at 50

(43) Carolyn Daughters, Ins and Outs of E-Notarization, Presentation Written for and Delivered to the Colorado Bar Association, http://www.rmeditorial.com/cle_presentation.pdf (last visited 15 March 2006

(44) Singapore’s Electronic Transactions Act (ETA) and Brunei’s Electronic Transactions Order (ETO) contained “limiting scope” to require certain documents such as sale of immovable property or any interest therein, powers of attorney, wills, negotiable instruments, and documents of title to be made in writing and signed by the contracting parties.

(45) Paul R. Katz, Electronic documents and Digital Signatures: Changing the Way Business is conducted and Contracts are Formed, http://library.findlaw.com/1999/Mar/1/128295.pdf (last visited March 15, 2006

(46) Article 749, CIVIL CODE; DECS. V. DEL ROSARIO, G.R. NO. 146586. JANUARY 26, 2005

(47) Id.

(48) Dalion v. Court of Appeals, G.R. No. 78903. February 28, 1990,

(49) Justice Oliver Wendel Holmes, Jr. The Common Law (1881)

(50) Paraphrasing Justice Oliver Wendel Holmes, Jr., The Law, Lecture in the Suffolk Bar Association Dinner, February 5, 1885; R.A. Posner, The Essential Holmes 221 [1992 ed.]

(51) A phrase used by Claro M. Recto, in Our Mendicant Foreign Policy, Address before the graduating class of the University of the Philippines, April 17, 1951