The Federal Government has enacted the Electronic Signatures in Global and National Commerce Act (“E-SIGN”), and North Carolina has enacted, with some changes, the Uniform Electronic Transactions Act (“UETA”). Both statutes validate electronic signatures and records. E-SIGN allows States to supersede E-SIGN with respect to State law by enacting UETA or a similar statute, but E-SIGN prohibits state statutes from being more restrictive than E-SIGN.

E-SIGN AND NC’s UETA LEVEL THE PLAYING FIELD FOR E-COMMERCE for parties who agree to conduct transactions by electronic means by providing that:

1. Parties can form contracts electronically. Neither a contract nor a signature will be denied legal effect solely because it is created electronically.
2. Parties can retain records (contracts and other documents) electronically. Laws that require a record to be retained will be satisfied by an electronic record meeting the requirements of the Acts.
3. Contracts formed by electronic agents like automated ordering systems are valid.
4. No particular technology is required to take advantage of the options the Acts create.

NC’s UETA ALSO PROVIDES that:

1. Electronic records or signatures can be attributed to particular persons. They can also be deemed to have been sent and received as provided in the Act.

2. Parties may be held responsible for changes or errors in electronic records as provided in the Act.

3. Electronic records are admissible in court proceedings.

BOTH STATUTES contain consumer protection provisions governing the enforceability and termination of a consumer’s agreement to conduct business electronically and requiring certain disclosures and verifications by those conducting electronic business with consumers.

BOTH STATUTES EXCLUDE FROM THEIR COVERAGE, among other things, laws governing wills, codicils and testamentary trusts and most of the Uniform Commercial Code. The statutes do validate electronic signatures and records when used in connection with the sale or lease of goods under the UCC.

See http://thomas.loc.gov/ for a copy of E-SIGN and http://www.ncga.state.nc.us/ for a copy of UETA.

Steve Hunting stevehunting@parkerpoe.com 704.335.9492

Bill Pappas billpappas@parkerpoe.com 919.890.4164