Enactment Of The Electronic Signatures In Global And National Commerce Act

In anticipation of the release of the Uniform Electronic Transactions Act ("UETA"), and in anticipation of a slow transition period while states debate UETA and enact it or comparable legislation, Congress passed the Electronic Signatures in Global and National Commerce Act ("E-Signatures Act" or "Act") to provide uniformity in the enforceability of contracts formed through electronic instrumentalities. On June 30, 2000, the President signed the Act into law. The E-Signatures Act provides uniformity in forming contracts electronically by validating their enforceability and by allowing electronic records and signatures to satisfy statutes that require writings and signatures, respectively.

Scope of Federal Electronic Signature Legislation. In passing the E-Signatures Act, Congress purported to "promote electronic commerce by providing a consistent national framework for electronic signatures and transactions" without preempting or overruling the development of state law governing electronic signatures embodied in UETA. Accordingly, the E-Signatures Act includes a provision allowing state law to preempt portions of the Act provided that the preemptive state law constitutes an enactment of UETA or makes reference to UETA and specifies alternative procedures through which legal effectiveness, validity, and enforceability may be achieved using electronic records or signatures. Thus, the E-Signatures Act uniformly legitimizes the use of electronic instrumentalities to form contracts in interstate commerce and in states that, so far, have not enacted legislation to the same effect.

Note: To date, the following states have adopted UETA: Arizona, California, Delaware, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Minnesota, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Utah, and Virginia. Additionally, to date, the Uniform Electronic Transactions Act has been introduced in the following states: Alabama, Colorado, District of Columbia, Michigan, New Jersey, Vermont, and West Virginia.

Legal Effect. The E-Signatures Act prohibits the denial of legal effectiveness, validity, or enforceability of: "a signature, contract, or other record. . . solely because it is in electronic form; or a contract. . . solely because an electronic signature or electronic record was used in its formation." The Act does not modify other contract law except by requiring that such law encompass electronic...