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Trustworthy Information Systems Handbook: Appendix E, VII.

Uniform Electronic Transactions Act

The purpose of the Uniform Electronic Transactions Act (UETA) is to develop an act relating to the use of electronic communications and records in contractual transactions. The UETA governs electronic records and signatures relating to a transaction, defined as limited to business, commercial and governmental affairs. It is intended to be consistent with the Uniform Commercial Code, but not duplicative of it. As a result, the UETA is procedural and affects the underlying substantive law of a given transaction only if absolutely necessary in light of the differences in media used. Whether a record is attributed to a person, and whether an electronic signature has any effect, is left to other substantive law.

The UETA expressly validates electronic records, signatures, and contracts. It affects the medium in which information, records, and signatures may be presented under current legal requirements. It provides for the use of electronic records and information for retention purposes, providing certainty in an area with great potential in cost savings and efficiency. The UETA makes clear that the actions of machines programmed and used by people will bind the user of the machine, regardless of whether a human was involved in a particular transaction. It also specifies the standards for sending and receiving electronic records. It does not specify the standards for an electronic signature, however. Certain legal rules requiring certain writing and signatures under law are not affected by the UETA (such as wills, etc). It applies only to transactions between parties who have agreed to conduct transactions electronically; it is intended to facilitate the use of electronic means, not require the use of electronic records and signatures.

The requirements for electronic transactions are as follows:

  1. Confidentiality: the contents of messages or substance of transactions must be kept secret to unauthorized parties.
  2. Access control/confidentiality: the information is only available to authorized parties; the access to information is controlled, and distribution or disclosure of the records is restricted.
  3. Chain of custody: the authentication of stored electronic records (this strengthens the credibility and privacy of records).
  4. Message integrity: the message is not tampered with; it is accurate.

The UETA provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. The medium in which a record, signature, or contract is created, presented, or retained does not affect its legal significance. It also provides that electronic records and signatures do satisfy legal requirements for writings and signatures, provided the parties have the ability to retain (print or download) the information for later review. An electronic record or electronic signature is attributable to a person if it was the act of the person. It may be proven by showing the efficacy of any security procedures applied to determine the person to whom the electronic record or signature was attributable.

The UETA also governs the retention of electronic records. It states that if a law requires certain records (including checks) to be retained, that requirement is met by retaining an electronic record that accurately reflects the information and remains accessible for later reference. The requirement of continuing accessibility addresses the issue of technology obsolescence and the need to update and migrate information to developing systems. The UETA would permit parties to convert original written records to electronic records for retention, and states that electronic records can be considered originals so long as the accuracy and accessibility requirements are met. The concern focuses on the integrity of the information and not with its originality. So long as there exists reliable assurance that the electronic record accurately reproduces the information, the electronic records and paper-based records are functionally equivalent.

The UETA provides that, in a legal proceeding, evidence of an electronic record or signature may not be excluded from evidence because it is an electronic record or signature, or it is not an original. Admissibility of evidence depends upon the substance of the information rather than the media in which the information is presented.

The UETA contains provisions specific to electronic records by government agencies. It authorizes (but does not require) state agencies to use electronic records and signatures generally for intra-governmental purposes, and to convert written records and manual signatures to electronic records and signatures. It gives an option to leave the decisions to each government agency or to assign that duty to a state officer. It also authorizes the destruction of written records after conversion to electronic form. In addition, the UETA broadly authorizes (but does not require) state agencies to send and receive electronic records and signatures in dealing with non-governmental persons. The UETA requires government agencies or state officers to take account of consistency in applications and interoperability among state agencies to the extent practicable when promulgating standards. For purposes of check retention statutes, the same electronic record of the check is covered by the UETA, so that retention of an electronic image/record of a check will satisfy such retention statutes so long as certain requirements are fulfilled.

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Appendix E

TIS Handbook last updated July 2002, Version 4.