Trends in the Law

In general, UETA provides that electronic records, electronic signatures, electronic notarizations and acknowledgments and electronic agents may be used to satisfy legal requirements for writings, signatures, contract formation, agency relationships and for the retention of records. The law also facilitates the execution and use of electronic notes, bills of lading and warehouse receipts, which are described by UETA as “transferable records.”



In accomplishing these objectives, UETA preserves existing substantive rules of law, including the law relating to contracts, agency and conflicts of law.



The adoption of UETA by Pennsylvania can be characterized as the first enactment of a new generation of electronic commerce statutes by state governments.



In recent years, as many as 40 states have adopted widely diverging laws relating to the use of electronic records and electronic signatures. Although these statutes are well intentioned, their lack of uniformity and diversity has probably done more to impede rather than to facilitate electronic commerce.



By providing an anticipated uniform set of standards applicable to interstate commerce, UETA may help to eliminate the impediments to the development of electronic commerce now posed by state laws and regulations, and may avoid congressional preemption of state control of contract law.

Records, Signatures

UETA applies only to transactions between parties who have agreed (whether by contract, their conduct or otherwise) to conduct transactions by electronic means. For transactions between such parties, an electronic record will satisfy any legal requirement that the record be in writing.



This makes clear that parties may enter into fully electronic contracts and may send and receive notices, disclosures and similar information electronically.



Under UETA, legal requirements that information be provided, sent or delivered in writing are satisfied by electronic records if the electronic record is capable of retention by its recipient and if the record is posted, displayed, sent, communicated and formatted as otherwise required by law. Electronic records may not be enforced against recipients, however, if the sender inhibits the ability of the recipient to store or print the records.



UETA also provides that, in covered transactions, if a law requires a signature, an electronic signature satisfies the law. An electronic signature is a sound, record or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.



An electronic signature is deemed to be attributed to a person by UETA if it can be shown in any manner to be the act of the person, including by showing the efficacy of a security procedure such as the use of algorithms, codes, identifying words or numbers, encryption or call back or acknowledgment procedures.



Pennsylvania has added special provisions to UETA relating to the use of “commercially reasonable” security procedures to attribute an electronic signature to a person in non-consumer transactions.



Utilizing provisions derived from drafts of the Uniform Computer Information Transactions Act, the Pennsylvania law provides that electronic signatures are attributable to persons identified by an agreed-upon security procedure if the person relying on the signature can show: (1) the commercial reasonableness of the security procedure; (2) the person’s own good faith reliance on the procedures in accordance with the agreement of the parties; and (3) evidence that the security procedure indicated that a message was from the person to which an electronic record or signature is attributed.



Conversely, however, if the signature was not in fact the act of the person identified by the security procedure, the signature will not be attributed to him or her if it can be shown that the electronic signature or record was caused by a person who either: (1) was not entrusted at any time to act for the person with respect to the electronic signature, record or security procedure; (2) was entrusted with access to transmitting facilities or information pertaining to the security procedure and facilitated their misuse; or (3) obtained information from a source controlled by the person and thereby facilitated misuse of the security procedure.

Electronic Contracts