The Electronic Transactions Act

In a bold move for Pennsylvania, Governor Tom Ridge signed the Electronic Transactions Act into law on December 16, 1999. The enactment makes Pennsylvania the third state, behind only California and Colorado, to have enacted legislation specifically designed to advance e-commerce. The Act is a nearly pure version of the Uniform Electronic Transactions Act, drafted by the National Conference of Commissioners on Uniform State Laws.

The Act acknowledges that electronic commerce is rapidly expanding and is a vehicle for economic growth within the Commonwealth. The main thrust of the Act is to validate electronic signatures, contracts and retention of records. The Act requires consent - the parties to an electronic transaction must have agreed to conduct their transaction via electronic means.

Under the act:

• A signature may not be denied legal effect solely because it is in electronic form.
• A contract may not be denied enforceability solely because an electronic record was used in its formation.
• If a law requires a signature, an electronic signature will satisfy the requirement.
• If a law requires a record to be in writing, an electronic record satisfies the writing requirement.
• If a law requires records to be retained, the Act permits retention in electronic format so long as the record accurately reflects the information in its final form and remains accessible for later reference.
• An electronic notary is an acceptable substitute for standard notarization.

For those of us who find these concepts unfamiliar, rest assured, the Act specifically defines a number of terms, including "electronic signature" and "electronic record." The Act also specifically defines when and electronic record is deemed to be "sent" and when it is deemed to be "received."

Beyond the provisions of the Uniform Electronic Transactions Act, the Pennsylvania version adds two more chapters. Chapter 7 sets forth rules for the use of agreed security procedures to verify electronic records and signatures. (Note: the provisions of Chapter 7 do not apply to consumer transactions.) Chapter 9 applies only to consumer transactions and requires that a consumer must specifically agree to conduct a transaction by electronic means.

The Electronic Transactions Act specifically excludes application to any laws regarding the creation and execution of wills, codicils, and testamentary trusts and generally does not apply to laws under the Uniform Commercial Code. The Act is codified at 73 P.S. §2260.101 et.seq. and may be viewed on Westlaw at 1999 Pa.Legis.Serv.Act 1999-69.