E-Sign and UETA:  What Should States Do Now?[1]

 

Introduction

 

Congress passed the Federal Electronic Signatures in Global and National Commerce Act[2] (“E-Sign”) in June 2000.  This law provides that electronic signatures and electronic records generally satisfy legal requirements for signatures or writings.  E-Sign authorizes the substitution of electronic notices for paper notices including most, but not all, types of consumer notices.  E-Sign also includes a number of important protections to ensure that consumers can receive, keep and use electronic notices provided to them.

 

Over twenty states have enacted some version of the Uniform Electronic Transactions Act (“UETA”).  This is a proposed Uniform Law on the same subject matter as E-Sign that is recommended by the National Conference of Commissioners on Uniform State Laws (“NCCUSL”).  Some states have enacted the uniform version,[3] while other states have added significant consumer protections not found in the uniform version.[4]

 

E-Sign and UETA are similar in many respects, but they are not at all similar in the way they treat consumers.  In consumer transactions, E-Sign requires a specific and electronic consent process before an electronic notice may replace a legally required written notice. UETA merely requires that the parties agree to conduct transactions by electronic means, but does not specify how that agreement is to be proven.  Instead, UETA states that agreement is determined from the context and circumstances.[5]  UETA’s agreement requirement applies to all types of electronic notices (legal and contractual).  UETA undercuts its own basic premise of agreement by permitting the agreement to conduct transactions electronically to be found from the context, including conduct.  UETA also permits the agreement for future electronic notices to be given only on paper.  UETA does not exempt any categories of consumer notices.

 

UETA alone is worse for consumers than E-Sign on all major aspects except perhaps UETA’s requirement of agreement for electronic notices sent pursuant to contract, as well as its recognition that state agencies can impose added requirements on retained records subject to the agency’s jurisdiction.  The passage of E-Sign removes the key reason for states to enact UETA—to facilitate nationwide acceptance of electronic notices and electronic signatures.  Thus, a state might wisely choose not to enact UETA in light of E-Sign.  However, the National Conference of Commissioners on Uniform State Laws, UETA’s author, has representatives in every state who are expected to continue to seek to enact UETA.  If UETA is enacted at all, it should be enacted in a way that does not “modify, limit, or supersede” the consumer protections of E-Sign. Ideally, it should be accompanied by a companion consumer protection act.

 

Can these two statutes coexist?  What is the impact of the federal E-Sign Act in states that have enacted UETA? Should states that have not passed UETA pass it now?  If so, in what form?  What else can states do to protect their consumers?


E-Sign contains important consumer protections that are absent from UETA.  Like many other federal consumer protection laws, E-Sign contemplates that states may add additional consumer protections which are consistent with the federal act.[6]  Surprisingly, however, E-Sign also contains an apparent optional “reverse preemption” feature which permits a state to “modify, limit, or supersede” parts of E‑Sign with the uniform version of UETA.[7]  Since E-Sign provides stronger consumer protections than UETA in most areas, care must be taken that future state enactments of UETA do not displace the federal consumer protections of E-Sign.  This article describes how to structure any future UETA enactment to avoid interfering with E-Sign’s consumer protections. It also offers additional provisions which can and should be added to state law, beyond both UETA and E-Sign, to improve state-level consumer protection in electronic notices.

 

This article is designed to assist advocates, lawmakers and policymakers, as they face these choices:

Table of Contents

 

Introduction

 

I.  Key Consumer-Related Provisions of E-Sign

 

A.                 E-Sign’s Consent Requirements

B.                 E-Sign Prohibits Substituting Oral Communications for Written Notices

C.                 E-Sign’s Document Integrity and Retention Requirements

D.                 E-Sign Has Specific Exceptions for Certain Consumer Notices

E.                  E-Sign's Consumer Protections May Be Partially Eliminated by Federal Agency Action.

 

II.  Why UETA Alone Is Bad for Consumers

 

A. UETA Permits Paper Agreement to Receive Future Notices Electronically

 

B. UETA Does Not Require That Electronic Notices Can Be Opened and Read

 

C. UETA Leaves Open a Loophole for Face-to-Face Transactions Where the Salesperson Brings Computer Equipment to the Consumer for One-Time Use

 

D.  Both UETA and E-Sign Overlook That Email Can Be Less Certain of Delivery than Regular Mail, but E-Sign’s Consent Rules Partially Address this Problem

 

E.  UETA Does Not Fully Assure Unchanged Copies for Later Consumer Use 

 

F.  Illusory Consumer Protection in UETA

 

III. Relationship of E-Sign and UETA

 

A. Preemption

B.  Displacement

C.  Choices for States that Have Not Adopted UETA

D. Effect of Earlier-Enacted UETAs  

  1. Pre-E-Sign State Law Does Not Displace E-Sign

  2. Does E-Sign Preempt Prior UETAs?                      

  3. E-Sign Does Not Transform Nonuniform UETAs into Uniform Ones

  4. Recommendation for States with Pre-existing UETAs

E. Can a State Permit Electronic Delivery of the Notices Exempted in E-Sign?

F. UCITA Amendments Should Not Affect E-Sign.

 

IV. Language to Implement These Approaches

 

Conclusion

 

Appendix 1 - Comparison of E-Sign and UETA on Key Issues

Appendix 2 - Recommended Provisions to Accompany Any State Enactment of UETA


           E-Sign and UETA:  What Should States Do Now?[8]

 

I.              Key Consumer-Related Provisions of E-Sign

 

The federal E-Sign bill states these two general rules:

 

E-Sign expressly affects only requirements that contracts or other records be written, signed or in non-electronic form.  All requirements concerning the content and timing of notices found in other law are left undisturbed.[9]  Whether an electronic notice must be “provided” or just “made available” and how it is delivered are issues determined by the underlying statute that requires a notice.[10] Additionally, E‑Sign cannot be used to require a person, other than governmental agencies in certain situations, to agree to use electronic records or signatures.[11]

 

        A.  E-Sign’s Consent Requirements

 

E-Sign qualifies its general rule of validity for electronic records with a special consent requirement for consumer notices required by law.  E-Sign’s consent rule, found in section 101(c), applies where another statute, regulation or rule of law requires information to be provided or made available to a consumer in writing.[12]  It requires all of the following:

  1. Any right or option to receive the information on paper (if the option exists),

  2.  How to withdraw the consent and whether any other consequences, such as fees or termination of the arrangement, will be imposed on the withdrawal,

  3. How to update the contact information, and 

  4. How to obtain a paper copy on request and the fee, if any, for that copy.

  5. Before the consent is given, the consumer must be provided with a statement of the hardware and software requirements for access to and for retaining the electronic records.

  6. The consumer's consent must be obtained or confirmed electronically (not just on paper). 

  7. The manner of obtaining the electronic consent or confirmation must reasonably demonstrate that the consumer can access information “in the electronic form that will be used to provide the future information."[13]

  8. The consumer's consent must be reacquired if there is a change in the hardware or software requirements needed to access or to retain the electronic record and the change creates a material risk that the consumer will not be able to access or store records delivered electronically. 

 

E-Sign’s requirement that consumer consent be given or confirmed electronically is of crucial importance.  Paper consent to future electronic transactions creates a risk that consumers will be offered boilerplate paper agreements to receive future electronic notices that they may or may not be able to open and read.  The federal requirement that consent be given or confirmed electronically eliminates this risk, at least for notices legally required to be in writing.

 

In contrast, UETA merely requires agreement, but does not specify how that agreement is to be proven.  Instead, UETA states that agreement can be determined from the context and circumstances.[14]  UETA undercuts its own basic premise of agreement by permitting the agreement to conduct transactions electronically to be found from the context, including conduct.  UETA also permits an agreement to receive future electronic notices to be given only on paper. 

 

B.  E-Sign Prohibits Substituting Oral Communications for Written Notices

 

UETA would allow a tape recording of a voice conversation to qualify as an electronic record that can replace a notice required by law to be in writing. E-Sign explicitly prohibits this for consumer notices.[15]

 

C.  E-Sign’s Document Integrity and Retention Requirements

 

Record “integrity” standards are important because both UETA and E-Sign generally allow electronic records to replace documents required by law to be in writing. Yet the law traditionally has made certain inherent assumptions that about the characteristics of paper “writings” that are not necessarily applicable to electronic records:

 

None of those assumptions necessarily applies to an electronic record.  Congress recognized these distinctions when it passed E-Sign, and E-Sign’s provisions are stronger on these points than UETA.  UETA does not require that the format used for electronic records be change-proof or tamper-proof.  Under UETA, a record can be sent to a person in a format that allows the record to be inadvertently changed every time it is opened.  Imagine the problems that might result if the homeowner's copy of a mortgage note was saved in an automatically-updating word processing format, such that every time the homeowner reviewed the document electronically, the record was saved with a new date on it.  The mortgage company will have kept its own electronic copy in a more secure fashion, and will have the technical capacity to prove in a court of law that the electronic document it has in its possession is the same one electronically signed by the homeowner.  Yet, if the homeowner had been provided only with a version that can be inadvertently changed, the homeowner will face a much tougher battle using his or her copy to prove the terms of the contract.

 

E-Sign, while not perfect, attempts to address this concern by requiring that the record be provided in a format that can be accurately reproduced for later reference by all parties who are legally entitled to retain the record.[16]  It is important to note that, unlike the consent provisions, the retention and integrity requirements of E-Sign are not limited to consumers; they apply to all users of electronic records.

 

D.  E-Sign Has Specific Exceptions for Certain Consumer Notices

 

Congress was convinced that some notices to consumers are so important that state law requiring paper notices should not be preempted to allow electronic records to replace paper writings for these types of notices.[17]  E-Sign specifically excludes the following consumer notices from the federal rule allowing electronic records to replace writing requirements:[18]

 

UETA has no exceptions for any consumer notices.

 

E.  E-Sign's Consumer Protections May Be Partially Eliminated by Federal Agency Action.

 

The consumer protections provided in E-Sign may prove to be ephemeral -- if opponents to them successfully convince federal agencies to eliminate them. There are a variety of ways this might take place:

 

 

II.            Why UETA Alone Is Bad for Consumers

 

E-Sign’s significant consumer protections on consumer consent, [(101(c))], ability to retain electronic records [101(d)], document integrity [(101(e))] and exclusion of certain essential consumer notices [103(b)(2)] should apply as baseline requirements for all written notices that are to be delivered to consumers electronically.  However, E-Sign allows states to “modify, limit or supersede” part of E-Sign by enacting the uniform version of UETA. Consequently, it is essential to understand the dangers to consumers if the uniform version of UETA is the prevailing law.[23]

 

UETA was written as a rule for facilitating voluntary electronic transactions.  In their desire to facilitate good transactions, UETA’s drafters unintentionally opened the door to authorize some new unsavory practices.  Here are some examples of why UETA should not be permitted to simply displace E-Sign.

 

A. UETA Permits Paper Agreement to Receive Future Notices Electronically

 

Under UETA, a consumer who does not own a computer could sign a piece of paper in a person-to-person transaction and later find that all notices, disclosures, and records relating to that transaction are to be sent electronically to an email address set up for the consumer by the salesperson.[24]  UETA’s proponents respond that such conduct would violate the basic contractual obligation of good faith and fair dealing, and perhaps also be unconscionable.  Consumer advocates believe that clear standards provide better deterrence than relying only upon the standards of good faith and unconscionability. 

 

Over two thirds of this nation's households are not yet online, and the percentages of elderly and poor who do not own computers are much higher,[25] yet UETA would allow crucial notices which now are required to be physically handed to these consumers to be emailed instead.  E-Sign, at least, does not permit paper form agreements to be used as the sole method for consumers without computer skills or equipment to agree to electronic notices.  E-Sign prohibits this by requiring that the consumer's consent must be either given or confirmed electronically.  Mere paper consent to receive future electronic notices is not sufficient to permit an electronic notice to replace a legally required paper notice.[26]

 

B.  UETA Does Not Require That Electronic Notices Can Be Opened and Read

 

Most people have received electronic transmissions that would not open.  UETA would allow a consumer to mistakenly agree to receive documents electronically even when the consumer cannot actually open and read the documents. UETA gives a consumer no right to a paper copy of an important document when the email won’t open or when it is unreadable if it does open.  To assure that the consumer actually has access to the necessary hardware and software to access these documents, the consumer consent process should test and assure capacity to receive electronic notices.  E‑Sign addresses this issue by requiring that the initial consent both be electronic and that it “reasonably demonstrate” the ability to receive notices using the consumer’s existing technology.

 

            C.  UETA Leaves Open a Loophole for Face-to-Face Transactions Where the Salesperson Brings Computer Equipment to the Consumer for One-time Use

 

Imagine an elderly consumer sitting at home who is visited by an aluminum siding salesperson.  The salesperson talks the consumer into agreeing to an expensive contract for new siding.  The documents state that the consumer “agrees” that all the information relating to the transaction will provided electronically.  The salesperson takes out a laptop, connects to the Internet through the consumer's telephone line, and asks the consumer to type her name on the computer as he scrolls through the FTC Notice for Door to Door Sales about the consumer's right to cancel, the sales contract, the mortgage on the house, the Truth in Lending disclosures, and other required legal notices.  When the salesperson departs, the consumer is left with no paper copies of these key documents.  UETA permits this process.  E-Sign implicitly prohibits this (although this prohibition could be stronger) by requiring electronic consent or confirmation of consent. A consumer who is in a face-to-face transaction should not be able to consent electronically by using the computer equipment belonging to the seller. That consent does not meet the requirements of E-Sign's section 101(c) because it does not "reasonably demonstrate that the consumer can access information in the electronic form." As Senator McCain said, “[t]his should mean that the consumer must initiate or respond to an email to consent or confirm consent.[27] Congressional statements by the sponsors of this legislation indicate that the only rational reading of E-Sign's strict requirements for consent would prohibit this activity.[28]

 

To deal clearly with this issue in state law, North Carolina recently enacted a flat rule that whenever a consumer conducts a "transaction on electronic equipment provided by or through the seller, the consumer [must] . .  .be given a written copy of the contract which is not in electronic form."[29]  This would prevent many unscrupulous business practices from flourishing as a result of the new electronic enabling laws.  The North Carolina rule should ensure that the electronic transaction is not used as a subterfuge to avoid actually providing the consumer with information that the consumer needs and is legally entitled to receive.[30]

 

            D.  Both UETA and E-Sign Overlook That Email Can Be Less Certain of Delivery than Regular Mail, but E-Sign’s Consent Rules Partially Address this Problem

 

Both UETA and E-Sign fail to fully address the significant differences between the ease and lack of cost involved in receiving mail through the U.S. Postal Service, and the complexities, ongoing expense, and uncertainties involved with receiving email.  The expense includes access to a working computer and access to the Internet.  The uncertainties include Internet service provider failure, use of a stale email address and junk mail filtering programs that may incorrectly filter out the message.  Until the receipt of email reaches the same level of certainty as the U.S. mail, some care must be taken to assure that the consumer has at least the same expectation of actual receipt of email as for U.S. mail. 

 

Neither UETA nor E-Sign fully recognizes the higher degree of delivery uncertainty with email, but E-Sign takes three important partial steps.  First, E-Sign requires that the initial consent be given or confirmed electronically, so that any consumer consenting to receive legally required notices under E-Sign must have and demonstrate the capacity to send email or to go online at the time of the initial consent.  Second, E-Sign recognizes that some types of consumer notices are so important that they should be provided on paper.[31]  Third, E-Sign permits additional state law provisions to address delivery issues.  Recommended language for a state companion act is found in Part IV.

        E.  UETA Does Not Fully Assure Unchanged Copies for Later Consumer Use 

 

UETA does not fully account for the different inherent characteristics between paper documents and electronic records.  Unlike paper records, electronic records can be accidentally altered when one intended only to view the contents.  For electronic records to provide the same degree of certainty as paper records, the electronic records must be protected from both inadvertent and intentional changes, that is, they must be maintained in a “read-only” form.  Under UETA, a person could inadvertently change a single byte on an electronic document memorializing an important transaction and then find that the electronic record is useless if a dispute arises, because the record is no longer exactly as it was when it was signed by the parties.  UETA requires that an electronic record substituting for a legal notice be capable of retention, but it does not say that the form of retention must permit accurate later reproduction.[32]  E-Sign adds a requirement that the document be provided in a form in which it can be accurately reproduced by all parties who are entitled to a copy.[33]  E-Sign also contains a provision permitting a court to deny enforcement of an electronic record that was not properly retained.[34]

 

F. Other Provisions.

 

UETA's proponents contend that UETA's section 10 includes a new consumer protection in the form of a right to cancel a transaction when a record was sent in error and all benefit and value is returned.  However, this error correction provision explicitly does not apply if the original transaction included an "opportunity for prevention or correction" of the error, such as any confirmation screen.  Unless interpreted by a court to require an effective, well-designed prevention opportunity that draws an active response from the consumer, rather than just any passive order confirmation screen, any benefits of the error correction provision of UETA section 10 are likely to be largely illusory.

 

 

III.                 Relationship of E-Sign and UETA

 

A.  Preemption

 

E-Sign is a messy concoction of provisions that 1) partially preempt state law, 2) allow states to regain control over their own electronic rules subject to some limitations, and 3) apply a federal rule to state transactions unless a state acts in a very specific way. The mission is to thread our way through the complexities of this statute and decipher how it relates to existing and future state laws on electronic signatures and electronic records. Several sections have very different standards:

 

 

One distinction that arises from a close analysis of the relationship of section 102 to the rest of E-Sign is the difference between a state's ability to avoid preemption, and the question of whether the particular requirements in E-Sign can be displaced by state action.  In other words, the difference between a state being able to maintain the effectiveness of its own laws, and acting to intentionally nullify the application of the particular requirements of E-Sign as to that state.  This issue is particularly important to the question of whether the consumer protections  in section 101(c), (d) and (e) apply to consumer transactions in a state when there has also been any state activity. Congressional intent indicates that a state that intends to displace the federal consumer protections must do so deliberately, even if it otherwise acts to avoid the preemptive effects of E-Sign’s general rule, which authorizes substitution of writings and signatures with electronic records and electronic signatures.[35] Similarly, no preexisting state law can be used to displace the specific requirements of E-Sign, yet parts of that preexisting state law may not be preempted under section 101. (See discussion in Part C, Option 1, below.)

 

 

The other effect of the exemptions listed in section 103 is to limit the exemptions to UETA that a state may enact. Section 3(b)(4) of the Uniform version of UETA anticipates that states will exempt certain transactions from the effects of UETA. However, E-Sign specifically limits a state's ability to displace E-Sign with such exceptions in section 102(a)(1), which reaffirms that to "the extent [that] exception is inconsistent with this title or title II . . .” those UETA exceptions are preempted.  As the only exemptions listed in E-Sign are listed in section 103,[36] those exemptions provide the test against which state exemptions from UETA should be measured.[37]

 

 

B.  Displacement

 

E-Sign’s section 102 permits states to displace part of E-Sign. A state can displace part of E-Sign, that is, avoid the preemptive effect of section 101, if it meets one of the two tests established in section 102. As such it appears to operate as an optional “reverse preemption” provision.  The only part of E-Sign that states may modify or supersede, that is, displace, is section 101 (though, as noted above, displacing section 101 also displaces those provisions that derive directly from section 101, such as the limits on state action set forth in section 104).  Section 101(a) contains the general rule authorizing substitution of writings and signatures with electronic records and electronic signatures, and sections 101(c), (d), and (e), and 103(b) contain the key consumer protections.  A sensible reading of section 102(a)'s authorization for a state to “modify, limit, or supersede” section 101 would be that states are permitted to alter section 101(a)’s general rule authorizing the use of electronic records and signatures by imposing either UETA or other allowable state law, leaving E-Sign’s rules for consumer consent still applicable.  However, another reading of section 102 is that it permits states to modify or displace all of section 101, including the consumer consent requirements of section 101(c) and the related consumer protections of sections 101(d) and (e).  The effect on the exemptions to E-Sign in section 103(b) is discussed in Part III D, below.

 

This section discusses the options available to states in light of E-Sign.  If a state that has not already adopted UETA proceeds to do so, it should include the language recommended in Part IV in a companion law.  This companion law should be enacted at the same time the state adopts UETA, and in the same bill. 

 

If a state has already adopted UETA, we recommend that the state either enact a new law establishing consumer protections or add a section to its UETA clearly establishing or deferring to E-Sign’s consumer protections. Part IV offers text for such state legislation.

 

E-Sign contemplates two kinds of state legislation on electronic notices and electronic signatures.  These two kinds of state statutes are: 1) UETA, and 2) another law which "specifies the alternative procedures or requirements for the use or acceptance (or both) of electronic records or electronic signatures."[41]  Nothing prohibits a state from enacting both UETA and a companion consumer protection law, and indeed the legislative history suggests that this was contemplated.[42]  The companion law must:

States are being asked by NCCUSL commissioners to adopt UETA. Part B discusses five choices for states.  Options One, Two and Three are recommended.  Option One is UETA with a companion consumer protection statute; Option Two is a consumer protection statute without UETA; and Option Three, a minimalist approach, calls for UETA with an additional provision stating that the consumer protections in E-Sign are preserved. Option Four - no UETA at all, is perfectly acceptable, but given the strong push made by NCCUSL, may not prevail.  Option Five, UETA alone, is not recommended.  Part IV provides statutory language to implement these recommended options.

 

States that adopted some version of UETA prior to the passage of E-Sign have different issues to consider, and may also wish to enact a companion statute. Part III D, below, discusses strategies in these states.

 

C.  Choices for States that Have Not Adopted UETA

 

E-Sign section 102(a)(1) creates uncertainty about what consumer protections apply in a state that enacts the uniform version of UETA in the future.  A key question is the scope of the displacement effected by the adoption of UETA.  It is not clear whether passage of UETA displaces just E-Sign’s validation of electronic signatures and contracts [found primarily in section 101(a)] or displaces that provision plus its consumer protections [found in section 101(c)(d) and(e)]. E-Sign can be read either way.[43] The displacement rule could have been intended to reach only the general rule of validity in section 101(a), even if more than section 101(a) can be affected by state law. Even if the provision is read broadly, it still does not state that passage of UETA automatically displaces E-Sign, only that a state may use it to do so.

 

A reasonable interpretation of the federal law's optional displacement provision, also referred to here as a “reverse preemption” provision, is that the consumer protection provisions in the federal E-Sign continue to apply in a state which has passed UETA unless the state law enacting UETA states an express intent to displace E-Sign’s consumer protection provisions.  This interpretation is supported by the legislative history:

Of course, the rules for consumer consent and accuracy and retainability of electronic records under this Act shall apply in all states that pass the Uniform Electronic Transactions Act or another law on electronic records and signatures in the future, unless the state affirmatively and expressly displaces the requirements of federal law on these points.  A state which passed UETA before the passage of this Act could not have intended to displace these federal law requirements.  These states would have to pass another law to supersede or displace the requirements of section 101.  In a state which enacts UETA after passage of this Act, without expressly limiting the consent, integrity and retainability subsections of 101, those requirements of this Act would remain in effects.  The general provisions of UETA, such as the requirement for agreement to receive electronic records in UETA are not inconsistent with and do not displace the more specific requirements of section 101, such as the requirement for a consumer's consent and disclosure in section 101(c).44[44]

 

Displacement of federal consumer protections is a rare event, and one that should not simply be implied in the absence of a clear legislative statement of intent to do so. 

 

Nonetheless, UETA’s proponents argue that any uniform enactment of UETA eliminates the application of the consumer protections in E-Sign.[45]  While this seems an unlikely result when there has been no statement of an intent to displace those protections in addition to E-Sign’s provisions regarding the use of electronic records and signatures, the safest course for any state enacting UETA is either to:

 

1)  reenact E-Sign's consumer protections into state law in a statute which is a companion to UETA and to E-Sign, or

 

2)  expressly state that enactment of UETA is not intended to modify, limit or supersede the consumer protections of E-Sign sections 101(c), (d) and (e); and to copy into state law the exemptions in section 103(b).   

 

Option One –  UETA with a Companion Consumer Protection Law on Electronic Notices

 

The preferred approach is for a state to enact both UETA and a companion law of the type permitted under section 102(a)(2) of E-Sign.  This route is best for a number of reasons. First, it would allow the state to address issues which are not included in E-Sign.  Second, this approach ensures that a state can continue to apply its own rules for record retention for evidentiary, audit or regulatory purposes.[46]

 

This subsection discusses the electronic notice[47] provisions of such a law.  The state companion statute should reenact certain parts of E-Sign into state law and add other provisions.  The E-Sign consumer protections that should be reenacted into state law are the provisions relating to:[48]                         

 

1) Consumer electronic consent to engage in electronic transactions       (Recommendation # 1).

 

2) Document retention and integrity (Recommendation # 2).

 

3) Exclusion of recordings of oral communications from the definition of an electronic record (Recommendation # 3).

 

4) Exemptions of certain notices from electronic records ((Recommendation # 4).

 

5) A definition of consumer transactions (Recommendation #5).

 

Adding all of these items to the companion act is essential to ensure that a post E-Sign UETA will not undo what E-Sign has just done to protect consumers. 

 

The companion act should also address issues left to the states for further legislation under E-Sign section 102(a)(2), and not addressed by UETA.  Those issues include: 

 

6) A general no-waiver rule for the state’s electronic consumer protections (Recommendation # 6).

 

7) A mutuality rule so that consumers can effectively respond to notices which they receive electronically Recommendation # 7).

 

8) The time at which an electronic record is considered delivered (Recommendation # 8).

 

9)  The time at which an electronic record becomes effective (Recommendation # 9).

 

10) The effect of a record that cannot be, or is not, opened or read when received (Recommendation # 10).

 

11)  Preservation of hand delivery of documents in face-to-face transactions (Recommendation # 11).

 

12)  Designation of the place where an electronic contract with a consumer is formed (Recommendation # 12).

 

13)  Protections in connection with the transfer of electronic loan notes (Recommendation # 13).

 

Finally, any state law addressing electronic records and signatures adopted after E-Sign should also: