The Uniform Electronic Transactions Act

The National Conference of Commissioners on Uniform State Laws (NCCUSL) adopted the UETA on July 29, 1999. The UETA's purpose is to provide a uniform national framework governing use and application of electronic transactions. First enacted in California, the UETA had been enacted by ten states by April 24, 2000, and fifteen other jurisdictions had legislation pending.

The act defines the terms "record," "electronic record," and "electronic signature" and provides as a general rule that electronic records and signatures satisfy legal requirements that a record be in writing or signed. The UETA also applies only to transactions between parties when each has agreed to conduct transactions by electronic means. Some types of transactions will be exempt. Although the UETA is intended to have broad application, laws governing the creation and execution of wills, codicils, or testamentary trusts and, if desired by the enacting state, transactions governed by the Uniform Commercial Code (UCC) or the Uniform Computer Information Transactions Act (UCITA) will be excluded from the statute's affect.

The UETA contains provisions governing provision or transmission of information in electronic form, attribution of electronic records and signatures, distributing risk of error in electronic transmissions, and retention of "original" electronic records. Other provisions govern automated electronic transactions or the use of so-called electronic "agents" and acceptance of electronic records and signatures by governmental agencies.

The UETA also creates a form of electronic negotiable instrument, called a "transferable record." As long as an entity has "control" of the transferable record, it is a holder of the record as defined by UCC § 1-201(20) and has the same rights and defenses as a holder of a negotiable instrument or document under UCC Articles 3, 7 and 9. The requirements of delivery, possession and endorsement are eliminated. A person has "control" over the record if "a system employed for evidencing the transfer of interests in the transferable record reliably established that person as the person to which the transferable records was issued or transferred." This requirement can be met by a system that creates, stores, and assigns the transferable record in a manner that satisfies six specific conditions enumerated in the UETA.