Uniform Electronics Transactions Act

The National Conference of Commissioners on Uniform State Laws and the American Law Institute promulgated The Uniform Electronics Transactions Act (UETA) in 1999. What. The UETA represents one of the first comprehensive efforts to create uniformity and introduce certainty in State Laws pertaining to E-commerce. The primary purpose of the UETA is to remove barriers to e-commerce by giving the same legal effects to electronic records and signatures as is currently given to paper documents and signatures (Cross and Miller, 2004, p. 417).

The proposed act was issued to i) facilitate electronic transactions consistent with other applicable law, ii) to be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices, and iii) to effectuate its general purpose to make uniform the law with respect to electronic business (Bohlman and Dundas, 2002, p. 302). Under the Uniform Electronics Transactions Act (UETA) “a contract may be formed by the interaction of electronic devices even if no individual was aware of or reviewed the electronic devices actions or the resulting terms and agreements (Stuckey, p.

1). This measure, the product of several years consideration by NCCUSI builds on the international consensus established by the model law and contains specific provisions that the states can use to remove paper based barriers to electronic transactions. There are at least several noteworthy features of the UETA. Firstly, it is a minimalist law that provides for the legal recognition of electronic records, electronic signatures, and other electronic documentations, but does not establish any benefits for certain kinds to technologies or methods.

As a result of this and other factors, the UETA will likely remain a flexible, durable, and appropriate framework for electronic transactions for a significant period of time (Pincus, 2000, p. 12). The first draft of the statute was long and complex, but during the course of drafting process, the statute progressively become simpler, as many complex provisions governing liability for attribution procedures and other issues often addressed in electronic signature were removed.

The final product was a clear, succinct statute that succeeds in using media neutral language to eliminate obvious obstacles to electronic commerce without favouring any particular technology or process. This Uniform Law continues to make its way through state legislatures, and served as the foundation of the Federal e-sign Act (Winn and Right, p. 11). Users. The UETA will not apply to a transaction unless each of the parties has agreed to conduct transactions by electronic means.

In the statements that accompany the UETA, the drafter states that it may be reasonable to infer that a person who gives out a business card with an e-mail address on it has consented to transact business electronically. The party’s agreement may also be inferred from a letter or other writing as well as from some verbal communication. Nothing in the UETA requires that the agreement to conduct transactions electronically be made electronically. According to this law, a person who has previously agreed to an electronic transaction may withdraw his or her consent and refuse further business electronically (Miller and Jentz, 2004, p.

253). Earlier, legislations had been attempted to create substantive new rules governing electronic equivalents of traditional paper based commercial specialities. It was necessary to draft special rules about what constitutes the electronic equivalent of the negotiable paper promissory notes or the negotiable paper document of title in order to create parity between electronic messages and their paper counterparts. The law also needed to provide a framework outlining the circumstances under which transferees might claim the same protections afforded their counterparts in the paper world.

The Uniform Electronics Transactions Act (UETA) met these needs under the concept of the transferable record. The act granted the person in control of that transferable record in an electronic environment the same special rights given to a holder in due course of the traditional negotiable note. The essence of transferable record is that the UETA addresses the reams of paper falling into the category of negotiable instruments by providing legal support for the creation, transferability and enforceability of electronic equivalents of notes and documents against the issuer or obligator.

The electronic equivalents of paper notes or documents are transferable records and may be controlled by the holder, who in turn may receive the legal benefits of a holder in due course, and good faith purchaser status (United Nations, 2005, p. 141). Why. The main purpose of UETA is to remove barriers to electronic commerce by validating and effectuating electronic records and signatures. It is not a general contracting statute, the substantive rule of the contract remain unaffected. 1 The UETA provides a legal framework for e-commerce without designating a particular technology to fulfil the requirements for a reasonable security procedure.

However, the UETA does not grant unwarranted legal protection to careless e-commerce operators. As a matter of policy, an important provision of the UETA imposes liability and creates strong disincentives for the impositions of security procedures which are not reasonable. In essence, the draft statutes recognise the business decisions based on risk analyses, but penalize bias in them (Moreau, 1999). UETA address and resolve questions about how e-commerce should comply with requirements that transactions shall be in writing and signed by participating parties.

The act does address the means by which electronic communications and signatures attached to them are authenticated (Rice and Cooper, 2004, p. 214). 1. Uniform Electronics Transactions Act, 1999, http://www. yozons. com/pub/UETA. pdf How. When a customer places an order in the website, he will be held to have agreed to the use of electronic records in the transaction. Under federal law, assuming the transaction affects interstate commerce, the electronic record is sufficient to satisfy the requirement of a signed writing.

The same result would follow under state law if the state has enacted the Uniform Electronics Transactions Act (Denicola, 2003, p. 78). Internet contracts involves same sort of issues that are addressed in contracts offline, but with certain technology related nuances. The parties to the e-contracts must still negotiate their obligations in clear and unambiguous languages, including such terms as quantity, quality and price as well as warranties, indemnification responsibilities, limitations on liabilities, and termination procedures.

The federal electronic signatures in Global and National Commerce Act (E-sign) and the Uniform Electronics Transactions Act (UETA) mandate parity between paper and electronic contracts. The basic legal rules that govern contracts offline are the very same rules that govern online contracts (Twomey, 2004, p. 255). UETA provides that a record, contract or signature may not be denied its legal status due to the fact that it is in electronic form, and specifies that, if a law requires a signature, an electronic signature can satisfy that requirement.

UETA only applies to transactions between parties who have both agreed to conduct transactions electronically. UETA expressly validates the use of electronic records and signatures and is technology neutral. Its broad language implicitly validates the use of digital signatures (Millstein et al, 2003, p. 1). Effect. The UETA is a statute of substantive default rules for computer information transactions addressing such issues as formation, breach and damages.

A conscious decision was made not to include any specific consumer protection provisions. Several provisions may however affect the consumers engaged in e-commerce. UETA provides for an electronic error defence allows party an out if they make a typographical or other technical mistake. UETA requires that before engaging in electronic transactions, both parties must assent to doing business in this manner, a provision that would give consumers, as well as other parties, the opportunities to opt out of electronic commerce if they choose.

State may also exclude entire categories of transactions from the aegis of UETA,2 which could theoretically include all business to consumer transactions and thereby allowing the state to dictate stricter rules governing them (Solovay, & Reed, 2003, p. 1). The UETA is the most focussed statute addressing the legal issues surrounding the e-commerce as it is practiced today and for the foreseeable future. The UETA provides better predictability in dispute resolutions in the e-commerce world by defining rules for the allocation of liabilities and risks.

By doing so, the UETA indirectly promotes reasonable computer security procedures and technologies that can prevent fraud and other security incidents (Moreau, 1999). Enactment of UETA by all 50 U. S. States will take several years under the most optimistic projections. In order to eliminate uncertainty about the legal status of electronic transactions during the period, the administration has supported federal legislation that would ensure the legal enforceability of contracts and signatures in electronic form.

The administration is working with congress to craft legislation that ensures equivalent protection of the public interest in the online environment (Pincus, 2000, p. 12). 2. National Conference of Commissioners on Uniform State Laws, Draft Uniform Electronics Transactions Act (UETA), 3 (b) (4) Dec (1999), available at http://www. law. upenn. edu. /bll/ulc/uecicta/eta1299. htm References Bohlman, H. M and Dundas, M. J. (2002) The Legal, Ethical and International Environment of Business, Delmar Learning, Tsinghua University Press Cross, F. B. and Miller, R. L.

(2004) The Legal and E-Commerce Environment Today: Business in its ethical, Regulatory, and International, Thomson West, pp. 800 Denicola, R (2002) The Laws of Contracts: Pearls of wisdom, Jones and Bartlett publishers, pp. 253 Moreau, T (1999) The emergence of a legal framework for electronic transactions, Computer and Security, Vol. 18, pp. 423-428 Miller, R. L. and Jentz, G. A. (2004) Fundamentals of Business Law, Thomson West, pp. 864 Millstein, J. S. , Neuburger, J. D. , and Weingart, J. P. (1983) Doing Business on the internet: Forms and Analysis, Law Journal Press, NY.