Contracts –Waiver of liability for fraud (bar review note) – repost

[originally posted in July, 2009]

Here comes a “movement” that proclaims itself to be “apolitical, inclusive … based on the principle of volunteerism.”  It calls itself AKO MISMO, and it vows the greatest of intentions (to promote “positive change”), but it is run by an advertising agency, DDB Philippines.  A number of celebrities have lent their names and images as supporters of this movement, among them Arnel Pineda (a vocalist), Ely Buendia (a musician), and Maxene Magalona (an actress).

AKO MISMO invites visitors to its web site to join the movement, which requires them to give personal information (name, email address, telephone no., province, gender, occupation) and to agree to terms and conditions, which include the following clause:

“AKO MISMO disclaims any liability or responsibility arising from the use of and the contents therein of the web site. No members of the AKO MISMO staff, and their contractors, advertising agencies shall be liable for any financial or other consequences whatsoever arising from the use of the Content of the web site, including the inappropriate, improper, or fraudulent use of such content.”

Here are some interesting legal questions, and suggested bar exam answers:

What is the nature of the clause regarding liability of AKO MISMO? It is in the nature of a waiver.  Black’s defines waiver as the voluntary relinquishment of a legal right or advantage.

Is AKO MISMO a juridical entity? The FAQ says only that it is an “initiative” backed by DDB Philippines through its Corporate Social Responsibility arm, DDB Cares.  Possibly, AKO MISMO does not have a separate legal personality from DDB Philippines.

Can a registrant-member of the AKO MISMO website be bound by the waiver clause on the liability of AKO MISMO? No. The waiver clause is void under Art. 1171 of the Civil Code.  Art. 1171 states:

“Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.”

Can a registrant-member sue AKO MISMO or its principal for damages for improper use of data collected by the AKO MISMO web site? Yes, because the waiver clause is void.  This could be a typical torts and damages suit, where, for example, the alleged tort may be a violation of the privacy of a member-registrant. AKO MISMO has a privacy policy.

How many members of AKO MISMO are potentially affected? As of July 10, 2009, the AKO MISMO web site claims that it has 236,771 members.  Any one of these individuals can file an action against AKO MISMO in the event of fraudulent or improper use of data they have entrusted to AKO MISMO.

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