a. What are the relevant provisions on choice of law and jurisdiction of that contract?

Under the Governing Law, clause 26.1 of sephora.ph’s terms of use, it states that:

These Terms, and any dispute or claim (including non-contractual disputes or claims)
arising out of or in connection with it or its subject matter or formation, shall be governed
in accordance with the law of the Philippines, without giving effect to any principles of
conflict of laws.1

Thus Philippine law is the choice of law of Sephora.ph, as seen in their terms of use contract and
that the Philippines has jurisdiction as seen in the Governing Law, clause 26.2 of sephora.ph’s
terms of use, which states:

You agree that the courts of the Philippines shall have exclusive jurisdiction to settle any
dispute or claim (including non-contractual disputes or claims) arising out of or in
connection with these Terms or its subject matter or formation.2

b. What are the contractual risk mechanisms in the contract? Identify five, and explain.

1. According clause 8.1 of sephora.ph’s terms of use, any risk of damage or loss is passed onto
the consumer/buyer at the time of delivery of the product ordered and Sephora.ph will no longer
be responsible for any damage or use, thus limiting their liability. Clause 8.1 of sephora.ph’s
terms of use states, “Risk of damage to or loss of the products shall pass to you at the time of
delivery, or, if you wrongfully fail to take delivery of the products, at the time when
Sephora has tendered delivery of the products.” 3 Thus the contractual risk mechanism here
is Sephora.ph limiting their liability on the damage or loss of any product(s) bought by the
consumer/buyer.

2. In clause 3.7 of the terms of use contract, Sephora makes a disclaimer by stating that the
accuracy of the information on their site is not error free and not always updated thus indicating
that there may be certain inaccuracies, which will not be liable for. Clause 3.7 states that:

While we try to provide an accurate description of the products, we do not warrant that
the descriptions, colours, information, pricing, promotions or other content available on
the Sites is accurate, current or free from error. Sephora may correct any errors,
inaccuracies or omissions and to change or update information or cancel orders if any

1
Sephora Online Store - Terms of Use, Retrieved from https://www.sephora.ph/terms (last accessed Mar.
10, 2020)
2
supra note 1.
3
supra note 1.
 information on the Sites is inaccurate at any time without prior notice, including after you
have submitted your order.4
Thus, the contractual risk mechanism here is sephora.ph making a disclaimer on the level of
accuracy and how updated the information on their website is.

3. The contractual risk mechanism employed in clause 11.6 of sephora.ph’s terms of use contract
are termination as it reserves its right to terminate a user’s account at any given moment for any
reason they deem fit or in accordance to their convenience or upon finding fault with a user.
Clause 11.6 states that, “Sephora reserves the right to suspend or terminate your account
without prior notice for any reason including if these Terms are violated or if it is in
Sephora’s best interests to do so.” 5

4. In clause 18.1 and clause 18.2, Sephora.ph makes a contractual risk mechanism by
terminating its obligations to a consumer/buyer in force majeure events. Clause 18.1 states
that:
Transmissions over the Internet and electronic mail may be subject to interruption,
blackout or delays due to internet traffic, or incorrect data transmission due to the public
nature of the Internet. We will not be liable for any non-compliance or delay in
compliance with any of the obligations we assume under a Contract when caused by
events that are beyond our reasonable control (“Force Majeure Events”).6

Clause 18.2 states that:

Force Majeure Events shall include any act, event, failure to exercise, omission or
accident that is beyond our reasonable control, including, among others, the
following:
strike, lockout or other forms of protest;
civil unrest, revolt, invasion, terrorist attack or terrorist threat, war (declared or not)
or threat or preparation for war;
fire, explosion, storm, flood, earthquake, collapse, epidemic or any other natural
disaster;
inability to use trains, ships, aircraft, motorized transport, logistics delivery or other
means of transport, public or private;
inability to use public or private telecommunications systems;

4
supra note 1.
5
supra note 1.
6
supra note 1.
 acts, decrees, legislation, regulations or restrictions of any government or public
authority; or
failure or accident in maritime or river transport, postal transport or other type of
transport. 7

5. In order to limit its liabilities, Sephora.ph employs a contractual risk mechanism through
clause 16.3 where it does not hold itself liable for any damage arising from the use of its Sites or
services. Clause 16.3 states:

To the extent permitted by law, Sephora will not be liable for any damages of any
kind arising out of or in connection with the use of the Sites or the Interactive
Services. This is a comprehensive limitation of liability that applies to all damages of
any kind, including but not limited to direct, indirect, incidental, punitive or
consequential damages, loss of data, income or profit, loss of or damage to property
and claims of third parties. 8

c. In what way did the seller comply with Section 5 of the Consumer Protection regulations
in E-Commerce? In what way did it not? Provide one example each, if any.

Sephora.ph complied with Sec. 5 of the Consumer Protection regulations in e-Commerce by:

1. providing “payment mechanisms that are reliable, easy to use and offer security that is
appropriate for the transaction and details of payment terms”9 This is evident as upon checkout,
users are shown the different modes of payment that they can use to pay for the items they wish
to purchase. Clause 4.2 of sephora.ph’s terms of use states:

If you wish to place an order with us, you must follow the online purchasing
procedure. Once you have added the products you wish to purchase to your bag
on the Sites, click on “Secure Checkout” and provide the necessary details (as
indicated) to us to submit your order. Once you have done so, you will receive an
email from Sephora notifying you of our receipt of your order (“Order
Confirmation”). Please note that this does not mean that your order has been
accepted.10

Clause 4.3 of sephora.ph’s terms of use states:

7
supra note 1.
8
supra note 1.
9
Joint DTI-DOH-DA Administrative Order No. 01, Series of 2008, § 5 (3.5.2) (Oct. 20, 2008).
10
supra note 1.
 All orders are subject to acceptance by us, and we will confirm such acceptance to
you by sending you an e-mail that confirms that the item has been dispatched
(“Shipping Confirmation”). The contract for the sale and purchase of an item
between you and Sephora (“Contract”) will only be formed when we send you the
Shipping Confirmation. The Contract will relate only to those items whose
dispatch we have confirmed in the Shipping Confirmation. We will not be obliged
to supply any other products which may have been part of your order until the
dispatch of those items has been confirmed in a separate Shipping Confirmation.
These Terms, the Rules, Guidelines and our Privacy Policy form a part of the
Contract.11

Clause 5.3 of sephora.ph’s terms of use also states that, “You may pay for your
purchases using a credit card (Visa, Mastercard or American Express), PayPal,
Dragonpay or cash on delivery (where applicable). Credit card payments are subject to
verification and authorization by the card issuer.”12

Thus, this shows that the payment mechanisms provided by Sephora are “reliable, easy to
use and offer security that is appropriate for the transaction and details of payment terms”

2. providing information that includes:

[T]he price tag of the product or service and the applicable currency. However,
applicable costs not included in the price tag such as delivery, postage, handling,
insurance, shipping charges, taxes, and specific reference to any other charges, customs
fees and other fees that may be imposed on or collected from consumers shall be so stated
in the information. The information shall include notice of any optional ongoing costs,
fees and charges and methods of notification for changes to those costs, fees and
charges.13

This prices of the product and the currency are indicated on the bottom of the product name and
photo on sephora.ph’s application or website. Indication of prices and applicable currency are
also stipulated in clause 5.1 of the terms of use contract of Sephora.ph. Clause 5.1 states that:

Prices shown on the Sites are in Philippine Peso (PHP) and are inclusive of GST, but
do not include any applicable shipping or delivery fees. Delivery fees will be charged
where applicable and will be included in the order total upon checkout. Prices or

11
supra note 1.
12
supra note 1.
13
DTI-DOH-DA Administrative Order No. 01, § 5 (3.4).
 shipping are subject to change effective immediately upon posting of such price
changes to the Sites or other form of notification. 14

3. providing information on “any restrictions, limitations or conditions of purchase, such as

geographic limitations or parental/guardian approval requirements for minors”15 This is evident
in clause 2.2 of sephora.ph’s terms of use contract when it states:

The information or personal details that you provide us shall be processed in

accordance with our Privacy Policy in the context of your order. When you use our
Sites, you agree to the processing of your information and details, and you confirm
that all information and details provided by you are true and accurate. Furthermore,
when you place an order on our Sites, you confirm that you are over the age of 18
years and are legally eligible to enter into binding contracts. If you are under 18
years of age, you may only place an order with the consent of your parent or
guardian. If you do not have consent from your parent or guardian, you must stop
using the Sites. 16

4. providing terms of delivery, which is evident in clauses 6.1 to 6.5 of the Sephora.ph terms of
use contract. Clause 6.1 states, “The products displayed on the Sites can be ordered and
delivered within Philippines only. Please refer to our FAQ if you need more information on
the various delivery options that Sephora offers.” 17 Clause 6.2 states, “Subject to the
availability of the products you have ordered, Sephora will endeavor to deliver the order
consisting of the product(s) listed in each Shipping Confirmation by the date indicated in the
Shipping Confirmation in question or, if no delivery date is specified, in the estimated
timeframe indicated when selecting the delivery method.” 18 Clause 6.3 states, “Nevertheless,
you may occasionally experience delays in delivery for reasons such as a high volume of orders
being received by Sephora during sale periods, holidays or the occurrence of unforeseen
circumstances.”19 Clause 6.4 states, “If we are unable to comply with the delivery date for any
reason whatsoever, we will inform you and we will give you the option to continue with the
purchase and establish a new delivery date. Please note that in any case, our couriers do not
deliver on Saturdays, Sundays or bank holidays.”20 Clause 6.5 states, “For the purpose of these
Terms, a “delivery” shall be understood to have taken place or the order deemed “delivered” as

14
supra note 1.
15
DTI-DOH-DA Administrative Order No. 01, § 5 (3.5.1).
16
supra note 1.
17
supra note 1.
18
supra note 1.
19
supra note 1.
20
supra note 1.
soon as you or a third party indicated by you acquires physical possession of the products, which
will be evidenced by the signing of the receipt of the order at your chosen delivery address.”21

5. providing details on returns, exchanges and refunds, evident in clauses 7.1 to 7.4 of
sephora.ph’s terms of use contract. Clause 7.1 states that, “All returns must be done in
accordance with the instructions set out in our FAQ.”22 Clause 7.2 states that, “For defective
and incorrect items, there is no time cap as to when the defective or incorrect items must be
returned however the return is subject to the conditions listed in our FAQ.” 23 Clause 7.3
states that, “If you have made an incorrect purchase or have changed your mind after
receiving the items, received an item as a gift or purchased an item online that you wish to
exchange, the item must be returned subject to the conditions listed in our FAQ.” 24 Clause
7.4 states that, “For products that meet our stated return conditions, you can choose for the
product to be exchanged or for a refund via Sephora Gift card or via original credit card.” 25

Sephora.ph did not comply with Sec. 5 of the Consumer Protection regulations in e-Commerce
by not:

1. providing a “fair, accurate, clear and easily accessible information sufficient to enable
consumers to make an informed decision whether or not to enter into the transaction”26 Sephora
does not provide and cannot guarantee to provide completely accurate product information as
clause 3.7 of their terms of use contract states:

While we try to provide an accurate description of the products, we do not warrant that the
descriptions, colours, information, pricing, promotions or other content available on the Sites is
accurate, current or free from error. Sephora may correct any errors, inaccuracies or omissions
and to change or update information or cancel orders if any information on the Sites is inaccurate
at any time without prior notice, including after you have submitted your order.27

d. If a foreign governing law applies, how can Philippine-based consumers enforce their
rights? Cite and explain.

21
supra note 1.
22
supra note 1.
23
supra note 1.
24
supra note 1.
25
supra note 1.
26
DTI-DOH-DA Administrative Order No. 01, § 5 (2.2).
27
supra note 1.
Philippine-based consumers may refer to the Consumer Act of the Philippines and the Civil Code
of the Philippines to enforce their rights as the former and the latter provide minimum statutory
consumer guarantees. Art. 68 (d), of the Philippine Consumer Act states:
Minimum standards for warranties. — For the warrantor of a consumer product to meet the
minimum standards for warranty, he shall:

1) remedy such consumer product within a reasonable time and without charge in case of a
defect, malfunction or failure to conform to such written warranty;
2) permit the consumer to elect whether to ask for a refund or replacement without charge of
such product or part, as the case may be, where after reasonable number of attempts to
remedy the defect or malfunction, the product continues to have the defect or to
malfunction. The warrantor will not be required to perform the above duties if he can show
that the defect, malfunction or failure to conform to a written warranty was caused by
damage due to unreasonable use thereof.28

Art. 72, of the Philippine Consumer Act states:

The following acts are prohibited:

. a)  refusal without any valid legal cause by the total manufacturer or any person
obligated under the warranty or guarantee to honor a warranty or guarantee
issued;

. b)  unreasonable delay by the local manufacturer or any person obligated under

the warranty or guarantee in honoring the warranty;

. c)  removal by any person of a product's warranty card for the purpose of evading
said warranty obligation;

. d)  any false representation in an advertisement as to the existence of a warranty

or guarantee.29

Art. 1562 of the Civil Code of the Philippines states:

In a sale of goods, there is an implied warranty or condition as to the quality or fitness of

the goods, as follows:

(1) Where the buyer, expressly or by implication, makes known to the seller the particular
purpose for which the goods are acquired, and it appears that the buyer relies on the
28
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 68 (1992).
29
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 72 (1992).
 seller’s skill or judgment (whether he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be reasonably t for such purpose;

(2) Where the goods are brought by description from a seller who deals in goods of that
description (whether he be the grower or manufacturer or not), there is an implied
warranty that the goods shall be of merchantable quality.30

Philippine-based consumers may also apply the public interest exception to consumer software
contracts by using the policy declaration in Art. 2 of the Consumer Act of the Philippines. Art. 2
of the Consumer Act of the Philippines states that, “It 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.”31

e. Provisions/laws that provide for a liability of an online seller/supplier of software.

1. Art. 97 of the Consumer Act of the Philippines states that:

Any 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.32

2. Art. 98 of the Consumer Act of the Philippines states that:

The tradesman/seller is likewise liable, pursuant to the preceding article when:

. a)  it is not possible to identify the manufacturer, builder, producer or importer;

. b)  the product is supplied, without clear identification of the manufacturer,

producer, builder or importer;

. c)  he does not adequately preserve perishable goods. The party making payment
to the damaged party may exercise the right to recover a part of the whole of the
payment made against the other responsible parties, in accordance with their part
or responsibility in the cause of the damage effected.33

30
An Act To Ordain And Institute The Civil Code Of The Philippines [CIVIL CODE OF THE
PHLIPPINES], Republic Act No. 386, art. 1562 (1949).
31
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 2 (1992).
32
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 97 (1992).
33
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 98 (1992).
3. Sec. 3 (7) of the DTI-DOH-DA Administrative Order No. 01 states:

Retailers, sellers, distributors, suppliers or manufacturers engaged in electronic

commerce with consumers shall adopt fair and reasonable business practices. In this
connection, retailers, sellers, distributors, suppliers or manufacturer shall xxx be liable for
defective products and service under Title III, Chapter V of the Consumer Act of the
Philippines34

4. Art. 68 (d)(1) of the Consumer Act of the Philippines states that:

For the warrantor of a consumer product to meet the minimum standards for warranty, he
shall:

remedy such consumer product within a reasonable time and without charge in case of a
defect, malfunction or failure to conform to such written warranty35

5. Art. 72 of the Consumer Act of the Philippines prohibits online sellers/suppliers from refusing
to honor a warranty/guarantee, unreasonable delay, removing a product’s warranty in order to
avoid the obligation of a warranty and falsely representing the existence of a warranty or
guarantee. Art. 72 of the Philippine Consumer Act states:
The following acts are prohibited:

. a)  refusal without any valid legal cause by the total manufacturer or any person
obligated under the warranty or guarantee to honor a warranty or guarantee
issued;

. b)  unreasonable delay by the local manufacturer or any person obligated under

the warranty or guarantee in honoring the warranty;

. c)  removal by any person of a product's warranty card for the purpose of evading
said warranty obligation;

. d)  any false representation in an advertisement as to the existence of a warranty

or guarantee.36

34
Joint DTI-DOH-DA Administrative Order No. 01, Series of 2008, § 3 (7) (Oct. 20, 2008).

35
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 68 (1992).
36
The Consumer Act Of The Philippines [CONSUMER ACT OF THE PHILIPPINES], Republic Act No.
7394, art. 72 (1992).