PHILIPPINES Law and Practice Contributed by: Kerwin K. Tan, Veronica S. Balbin and Jose Maria B. Buenagua, Tan Hassani and Counsels
cially those with an international presence. Nonethe - less, it is recommended that data retention duration should be aligned with the claims period under the Labor Code of the Philippines and recording-keeping requirements under the NIRC and Anti-Money Laun - dering Act. 4.3 Liability The distinction between direct and indirect loss is rel - evant in determining the type of damages that can be claimed. Under Philippine laws, actual damages constitute compensation for sustained pecuniary loss. However, to be awarded actual damages, the pecuniary loss must be substantiated with concrete evidence, such as receipts. Both direct loss and indirect loss may be recoverable through actual damages but it is easier to prove direct loss since pecuniary loss is comparatively easier to prove in direct loss than in indirect loss. In the absence of such proof, temperate or moderate damages may be awarded. Temperate or moderate damages may be awarded when the court finds that some pecuniary loss has been suffered but its amount cannot be determined with certainty. Temperate or moderate damages can be awarded for either direct or indirect losses. Loss of profit forms part of actual damages which must be established with competent proof and a rea - sonable degree of certainty. Further, loss of profits on account of delay or failure of delivery may be recov - ered only if such damages were reasonably foreseen prior to contracting. On the other hand, loss of goodwill is considered part of moral damages. As a general rule, moral damages cannot be awarded to corporations. A corporation may acquire goodwill or reputation of its own, and when it is harmed, the corporation may recover moral damages. Under Philippine law, rights can generally be waived, though certain exceptions exist. Waivers are invalid if they are contrary to law, public order, public policy, morals, or good customs, or if they prejudice a third party with a legally recognised right.
Notably, any waiver of responsibility for future fraud is void, as responsibility arising from fraud is always enforceable. Lastly, with regard to liquidated damages, these are pre-agreed amounts specified by the parties to a con - tract. However, the amount of liquidated damages is limited to the agreed sum unless the nature of the breach does not correspond to the breach for which the liquidated damages were intended. In such cases, the measure of damages will be determined by law, not by the parties’ agreement. 4.4 Implied Terms Contracting parties may establish stipulations, claus - es, terms and conditions as they may deem conveni - ent, provided they are not contrary to law, morals, good customs, public order or public policy. This means that, generally, laws are deemed written into every contract, even special laws. Under the Elec - tronic Commerce Act of 2000, an electronic execu - tion of a contract and electronic records thereof are valid and admissible to the Rules of Evidence. For online operations, obligations under the Internet Transactions Act of 2023 apply to platforms, e-retail - ers, and merchants. This also includes co-operation with government agencies regarding referrals to an online dispute resolution facility. Although a contract is often described as the “law between the parties”, the provisions of positive law that regulate contracts are always considered to be incorporated within it. These statutory provisions consequently limit and govern the relationship between the parties. These fundamental legal principles hold true for all modern commercial agreements, including those for technology or out - sourcing. 4.5 Data Protection and Cybersecurity Under Philippine laws, if a PIP is processing personal information on behalf of a PIC as their client, the DPA requires that the contracting parties execute a con - tract or other legal act (like an outsourcing or subcon - tracting agreement) that will bind the PIP to the PIC. In outsourcing, the DPA requires that the PIC use contractual or other reasonable means to ensure that proper safeguards are in place to ensure con - fidentiality, integrity, and availability of the personal
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