Despite the downward spiral of many dot-com companies, the number of business transactions that occur over the Internet continues to grow. Electronic transactions raise important issues regarding the validity of a contract. This growth and resulting legal questions motivated Congress to enact “ESIGN” (Electronic Signatures in Global and National Commerce Act) to address some of these issues. Oregon has adopted the Uniform Electronic Transactions Act, which was drafted to help establish consistent laws among the states. The UETA went into effect on June 22, 2001.
The Oregon law applies to electronic records and signatures relating to business transactions (it does not apply to wills, codicils, and testamentary trusts). It acts as gap filler when parties do not include all the necessary provisions to the contract. The advantage is that the parties have great latitude in drafting their electronic agreements. The following summary will be useful to Oregon business owners who have included the World Wide Web as a method of doing business. This information should put owners at ease knowing that their electronic transactions can be as enforceable as traditional paper transactions.
- Parties are free to write the rules of their electronic transactions. The new law will act as gap filler for any terms not included in the electronic agreement.
- An electronic signature can be a sound, symbol or process attached to or logically associated with the electronic transaction. The signing party must adopt that signature as his own, with the intent to sign the agreement. Electronic signatures carry the same legal effect as paper signatures. For example, an electronic notary or acknowledgement is permitted as long as the notary signature is attached to the signature to which it attests as with paper transactions.
- Similarly, electronic records are treated like paper writings and are given the same legal effect. Electronic versions of records are subject to particular requirements. For example, the law requires a writing for the sale of land. Therefore, an electronic record may be used as long as the parties can retain it. This means that the record must be able to be stored or printed by the recipient. An electronic record that cannot be so stored or printed is unenforceable.
Based upon the new law, a digital signature can be valid on a contract entered into electronically. The UETA allows businesses to take advantage of technology without losing the protection that traditional paper transactions afford. It also helps reduce waste and increase efficiency, which are beneficial to any business.