CONNECTICUT UNIFORM ELECTRONIC TRANSACTIONS ACT

CONNECTICUT UNIFORM ELECTRONIC TRANSACTIONS ACT

DRAFT 7

(Deleted language requested by the drafting committee is shown by brackets and strikethroughs. Added language requested by the committee is shown in all caps.

SECTION 1. SHORT TITLE. This act may be cited as the Connecticut Uniform Electronic Transactions Act.

COMMENT

Section 102 of Public Act 106-226, the federal Electronic Signatures in Global and National Commerce Act (the Federal Act), preempts state law pertaining to interstate and foreign commerce as to the matters covered by the act; except that, as provided in section 102 (a) of the act:

A State statute, regulation, or other rule of law may modify, limit or supersede the provisions of section 101 with respect to State law only if such statute, regulation, or rule of law –

(1) constitutes an enactment or adoption of the Uniform Electronic Transactions Act as approved and recommended for enactment in all the States by the National Conference of Commissioners on Uniform State Laws in 1999, except that any exception to the scope of such Act enacted by a State under section 3(b)(4) of such Act shall be preempted to the extent such exception is inconsistent with this title or title II, or would not be permitted under paragraph (2)(A)(ii) of this subsection....

(2)(A) Specifies the alternative procedures or requirements for the use or acceptance (or both) of electronic records or electronic signatures to establish the legal effect, validity, or enforceability of contracts or other records, if –

(i) such alternative procedures or requirements are consistent with this title and title II; and

(ii) such alternative procedures or requirements do not require, or accord greater legal status or effect to, the implementation or application of a specific technology or technical specification for performing the functions of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures; and

(B) If enacted or adopted after the date of the enactment of this Act, makes specific reference to this Act.

This act conforms generally to the UETA as adopted by the National Conference of Commissioners on Uniform State Laws in 1999 (which is the basis for this act). To the extent that the act varies from the model law: (1) the variations are noted in the commentary to the appropriate sections, and (2) the drafting committee believes the variations are, in compliance with Section 102(a)(2)(A)(i) of the Federal Act, consistent with that act, and that the variations do not favor any specific technology, as prohibited by Section 102(a)(2)(A)(ii) of the Federal Act. This act makes specific reference to the Federal Act, as required by Section 102(a)(2)(B) of the Federal Act, in Section 6. Thus, the drafting committee believes this act as drafted will survive federal preemption if adopted by the General Assembly.

SECTION 2. DEFINITIONS. In this act:

(1) "Agreement" means the bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations, and procedures given the effect of agreements under laws otherwise applicable to a particular transaction.

(2) "Automated transaction" means a transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an obligation required by the transaction.

(3) "Computer program" means a set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result.

(4) "Contract" means the total legal obligation resulting from the parties' agreement as affected by this act and other applicable law.

(5) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. [~~The term includes, among other technologies facsimile, electronic mail, telex, telecopying and digital scanning.~~]

(6) "Electronic agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

(7) "Electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means. [~~The term includes, among other~~] EXAMPLES OF SUCH ELECTRONIC RECORDS INCLUDE, WITHOUT LIMITATION, FACSIMILES, ELECTRONIC MAIL, TELEXES AND INSTANT MESSAGES.

(8) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign [~~same intent as if the person had affixed the person’s handwritten signature to~~] the record.

(9) "Information" means data, text, images, sounds, codes, computer programs, software, databases, or the like.

(10) "Information processing system" means an electronic system for creating, generating, sending, receiving, storing, displaying, or processing information.

(11) "Person" has the meaning given in section 1-1k of the general statutes.

(12) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(13) "Security procedure" means a procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures.

(14) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, which is recognized by federal law or formally acknowledged by a State.

(15) "Transaction" means an action or set of actions occurring between two or more persons relating to the conduct of business, commercial, charitable or governmental affairs.

COMMENT

For the most part, the drafting committee adopted for this act the definitions proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in the Uniform Electronic Transactions Act (UETA). Deviations are as follows:

(5) [The drafting committee added several examples of the kinds of "electronic" technology the act is intended to cover. These examples are not intended to be limiting. To the contrary, they are meant to support a more liberal view of the technologies contemplated by the act and to assure parties that the most commonly used forms of technology fall within the scope of the act.] As noted in the commentary to the UETA: "While not all technologies listed are technically "electronic" in nature (e.g., optical fiber technology), the term "electronic" is the most descriptive term available to describe the majority of current technologies.... [W]hether a particular technology may be characterized as technically "electronic"... should not be determinative of whether records and signatures created, used and stored by means of a particular technology are covered by this Act."

(7) THE DRAFTING COMMITTEE ADDED SEVERAL EXAMPLES OF THE KINDS OF ELECTRONIC RECORDS THE ACT IS INTENDED TO COVER. THESE EXAMPLES ARE NOT INTENDED TO BE LIMITING. TO THE CONTRARY, IN ACCORDANCE WITH THE COMMENT TO (5) ABOVE, THEY ARE MEANT TO SUPPORT A MORE LIBERAL VIEW OF THE TECHNOLOGIES CONTEMPLATED BY THE ACT AND TO ASSURE PARTIES THAT THE MOST COMMONLY USED FORMS OF TECHNOLOGY, AND THE RECORDS THEY PRODUCE, FALL WITHIN THE SCOPE OF THE ACT.

(8) THE DRAFTING COMMITTEE CONSIDERED DELETING THE PHRASE "INTENT TO SIGN" FOUND IN THE UNIFORM ACT AND INSERTING INSTEAD "SAME INTENT AS IF THE PERSON HAD AFFIXED THE PERSON’S HANDWRITTEN SIGNATURE TO THE RECORD." WHILE THE COMMITTEE ULTIMATELY CHOSE TO RETAIN THE UNIFORM LANGUAGE, THE PURPOSE OF THE REVISION WOULD HAVE BEEN TO MAKE CLEAR THAT AN ELECTRONIC SIGNATURE IS TO HAVE THE SAME EFFECT IN A GIVEN SITUATION AS A HANDWRITTEN SIGNATURE WOULD HAVE IN THE SAME SITUATION. THUS, THE INTENT OF THE ELECTRONIC SIGNATORY AND THE EFFECT OF THE ELECTRONIC SIGNATURE SHOULD BE DETERMINED IN THE SAME WAY AS THAT OF A TRADITIONAL SIGNATORY AND A HANDWRITTEN SIGNATURE.

(11) The definition of "person" for purposes of this act is the same as that found in section 1-1k of the Connecticut General Statutes (CGS).

(15) The drafting committee added "charitable" to the list of transactions governed by the act. E.g., the preparation and administration of charitable trusts, including investing trust funds, may be done electronically, and should be covered by the same principles as the other kinds of transactions included in the definition.

SECTION 3. SCOPE.

(a) Except as otherwise provided in subsection (b), this act applies to electronic records and electronic signatures relating to a transaction.

(b) This act does not apply to a transaction to the extent it is governed by:

(1) A law governing the creation and execution of wills, codicils, or testamentary trusts;

(2) Except to the extent provided in section 17 of this act, the Uniform Commercial Code, other than Sections 1-107 and 1-206, AND Article 2;

(3) Sections 47-10, 47-12, 47-12a, 47-14g, 47-14j, 47-14k, 47-15, 47-16, 47-17, 47-18a, and 47-19 of the general statutes;

(c) This act does not apply to any of the following:

(1) Rules of court practice and procedure under the Connecticut Practice Book;

(2) any notice of:

(A) the cancellation or termination of utility services (including water, heat, and power);

(B) default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual;

(C) the cancellation or termination of health insurance or benefits or life insurance benefits, excluding annuities; or

(D) recall of a product, or material failure of a product, that risks endangering health or safety; or

(3) any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials.

(d) This act applies to an electronic record or electronic signature otherwise excluded from the application of this act under subsections (b) or (c) to the extent it is governed by a law other than those specified in subsections (b) or (c).

(e) A transaction subject to this act is also subject to other applicable substantive law.

COMMENT

(a) This section conforms to the UETA, except as noted in the comments to subsection (c).

The scope of the act is limited by its own terms to "transactions" as that term is defined in section 2(15) (i.e., actions taken by two or more persons in the context of business, commercial, charitable or governmental affairs). Thus, transactions that occur in other contexts or records that are not part of a transaction would not be covered by the act.

(b)(1) Wills and testamentary trusts have traditionally been executed with a higher degree of formality than other documents. Both the UETA and the Federal Act, as well as this act, adopt the position that those formalities, such as requiring the signatures of sworn witnesses, should be retained. While these matters may be accomplished electronically, the prevailing view is that many courts and practitioners are uncomfortable doing so at this time.

In addition, as the commentary to the UETA observes: "This exclusion is largely salutary given the unilateral context in which such records are generally created and the unlikely use of such records in a transaction as defined in this Act...."

(2) The act does not apply to Connecticut’s Uniform Commercial Code, except as noted. In particular, the reader is referred to Section 17 of the act. Section 17 addresses transferable records and makes reference in that context to several UCC sections otherwise excluded from the act under this section.

(3) The specified statutes are the Connecticut recording statutes. The drafting committee wanted to make clear that, although real property transactions may be completed electronically, documents related to those transactions that are to be recorded must be in paper form and meet all other statutory requirements.

(c)(1) – ( 3) These exclusions are taken from section 103(b) of the Federal Act. The drafting committee believed the same exclusions should apply at the state level and hoped that including them in the state act will provide consistency between state and federal law for parties participating in both intrastate and interstate commerce.

(d) This subsection makes clear that an electronic record used for purposes of a law that is excluded from this act may nevertheless be covered by the act when that same record is used for purposes of other laws not excluded from the act. The commentary to the UETA explains: "For example, this Act does not apply to an electronic record of a check when used for purposes of a transaction governed by Article 4 of the Uniform Commercial Code [which is excluded from the Act].... However, for purposes of check retention statutes [which are not excluded from the Act], the same electronic record of the check is covered by this Act...."

SECTION 4. PROSPECTIVE APPLICATION. This act applies to any electronic record or electronic signature created, generated, sent, communicated, received, or stored on or after the effective date of this act.

COMMENT

This act applies only to validate electronic records and signatures generated subsequent to the effective date of the act. The validity of those generated prior to the effective date of this act must be determined by other law.

SECTION 5. USE OF ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES; VARIATION BY AGREEMENT.

(a) This act does not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form.

(b) This act applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct.

(c) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement.

(d) Except as otherwise provided in this act, the effect of any of its provisions may be varied by agreement. The presence in certain provisions of this act of the words "unless otherwise agreed", or words of similar import, does not imply that the effect of other provisions may not be varied by agreement.

(e) Whether an electronic record or electronic signature has legal consequences is determined by

this act and other applicable law.

COMMENT

The drafting committee adopted this section of the UETA without revision.

This section limits applicability of the act to transactions which parties have agreed to conduct electronically. The act is intended to encourage and facilitate the use of electronic means to conduct business, but does not require it.

(b) Whether the parties have agreed to an electronic transaction is determined from the

surrounding circumstances. As the commentary to the UETA notes: "If this Act is to serve to facilitate electronic transactions, it must be applicable under circumstances not rising to a full fledged contract to use electronics.... Indeed, such a requirement would itself be an unreasonable barrier to electronic commerce, at odds with the fundamental purpose of this Act. Accordingly, the requisite agreement, express or implied, must be determined from all available circumstances and evidence."

(c) A party may refuse to conduct a particular transaction electronically, even if the person previously has conducted transactions electronically.

(e) The commentary to the UETA makes the following observation about this subsection: "While this Act validates and effectuates electronic records and electronic signatures, the legal effect of such records and signatures is left to existing substantive law outside this Act except in narrow circumstances.... Where a rule of law requires that the record contain minimum substantive content, the legal effect of such a record will depend on whether the record meets the substantive requirements of the other applicable law."

SECTION 6. CONSTRUCTION AND APPLICATION. This act must be construed and applied:

(1) to facilitate electronic transactions consistent with other applicable law;

(2) to be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices; and

(3) to effectuate its general purpose to make uniform the law with respect to the subject of this act among States enacting it.

[~~(4) TO BE CONSISTENT WITH PUBLIC ACT 106-226, THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.~~]

COMMENT

The drafting committee adopted this section of the UETA unrevised, except for the addition of (4).

The following is from the commentary to the UETA:

This Act has been drafted to permit flexible application consistent with its purpose to validate electronic transactions. The provisions of this Act... allow the courts to apply them to new and unforeseen technologies and practices. Accordingly, this legislation is intended to set a framework for the validation of media which may be developed in the future and which demonstrate the same qualities as the electronic media contemplated and validated under this Act."

[~~(4) The drafting committee added this provision to clarify that this act is intended to comply with the Federal Act.~~]

SECTION 7. LEGAL RECOGNITION OF ELECTRONIC RECORDS, ELECTRONIC SIGNATURES, AND ELECTRONIC CONTRACTS.

(a) [~~EXCEPT AS PROVIDED IN SECTION 8 OF THIS ACT,] a~~ A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(c) If a law requires a record to be in writing, an electronic record satisfies the law.

(d) If a law requires a signature, an electronic signature satisfies the law.

COMMENT

Subsections (a) and (b) establish that the form or medium "in which a record, signature or contract is

created, presented or retained does not effect its legal significance" (UETA, Commentary to Section 7), and that the medium alone may not be reason for denying either the legal effect or enforceability of a record.

However, the section does not prevent a record from being denied validity for other reasons, such as failure to comply with statutory requirements other than that the record be in writing or the absence of agreement between the parties that the transaction be conducted electronically.

Subsections (c) and (d) "are particularized applications of subsection (a). The purpose is to validate and

effectuate electronic records and signatures as the equivalent of writings, subject to all rules applicable to the efficacy of a writing, except as such rules are modified by the more specific provisions of the Act" (UETA, Commentary to Section 7).

SECTION 8. CONSUMER DISCLOSURES (NEW SECTION)

(a) Notwithstanding section 7 of this act, if a statute, regulation, or other rule of law requires that information relating to a transaction or transactions be provided or made available to a consumer in writing, the use of an electronic record to provide or make available, whichever is required, such information satisfies the requirement that such information be in writing if the requirements of [~~subdivision~~] SUBDIVISIONS(1) THROUGH (6), INCLUSIVE, of subsection (c) of section 101 of the Electronic Signatures in Global and National Commerce Act, [~~public act~~]PUB. L. NO. 106-226, 114 STAT. 464 (2000) are met.

COMMENTS

This section does not appear in the UETA.

(a) The reference to subsection (c)(1) – (6) of Section 101 of the Federal Act is intended to require in Connecticut the same consumer disclosures adopted by the Federal Act. The drafting committee believed that these consumer protections are appropriate for the state act and that parties engaged in both intrastate and interstate transactions will benefit from having identical consumer provisions with which to comply.

Subsection (c)(1) of Section 101 of the Federal Act is sometimes called the "opt-in" provision. The subsection permits information, required to be given to a consumer in writing, to be given electronically if the consumer (1) consents to the electronic transmission after being provided with certain statements specified in the subsection, and (2) demonstrates that he can access the information in the electronic form to be used. The consumer also must be informed of any changes in the hardware or software requirements for accessing the information, and the person providing the information must again comply with the subsection requirements..

SECTION 9. PROVISION OF INFORMATION IN WRITING; PRESENTATION OF RECORDS.

(a) If parties have agreed to conduct a transaction by electronic means and a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered, as the case may be, in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.

(b) If a law other than this act requires a record (i) to be posted or displayed in a certain manner, (ii) to be sent, communicated, or transmitted by a specified method, or (iii) to contain information that is formatted in a certain manner, the following rules apply:

(1) The record must be posted or displayed in the manner specified in the other law.

(2) Except as otherwise provided in subsection (d)(2), the record must be sent, communicated, or transmitted by the method specified in the other law.

(3) The record must contain the information formatted in the manner specified in the other law.

(c) If a sender inhibits the ability of a recipient to store or print an electronic record, the electronic record is not enforceable against the recipient.

(d) The requirements of this section may not be varied by agreement, but:

(1) to the extent a law other than this act requires information to be provided, sent, or delivered in writing but permits that requirement to be varied by agreement, the requirement under subsection (a) that the information be in the form of an electronic record capable of retention may also be varied by agreement; and

(2) a requirement under a law other than this act to send, communicate, or transmit a record by a specified means of delivery may be varied by agreement to the extent permitted by the other law.

COMMENT

The commentary to the UETA states that this section is intended as a savings provision, "designed to assure, consistent with the fundamental purpose of this Act, that otherwise applicable substantive law will not be overridden by this Act."

(a) This subsection requires generally that, to comply with a requirement of law that information be provided in writing, "the recipient of an electronic record... must be able to get to the electronic record and read it, and must have the ability to get back to the information in some way at a later date."

(b) Subsection (b) retains requirements of other law that provide for specified means of delivering or displaying information. The UETA commentary gives the example of a law that requires delivery of a notice by first class US Mail. The means of delivery would not be affected by this act. Thus, while the information to be provided could be on a computer disc, the disc must be delivered by mail.

(c) This subsection is an incentive for senders of information to use systems that do not inhibit the recipient from storing or printing the electronic record.

(d) From the UETA commentary: "The protective purposes of this section justify the non-waivability provided by subsection (d). However, since the requirements for sending and formatting and the like are imposed by other law, to the extent other law permits waiver of such protections, there is no justification for imposing a more severe burden in an electronic environment."

SECTION 10. ATTRIBUTION AND EFFECT OF ELECTRONIC RECORD AND ELECTRONIC SIGNATURE.

(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.

(b) The effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law.

COMMENT

(a) Subsection (a) provides that an electronic record or signature that results from a person’s action will be attributed to the person. The subsection does not alter existing laws concerning attribution. The UETA commentary notes that nothing in this section negates the use of a signature to attribute a record to a person and that, once an electronic signature is attributed to a person, the electronic record containing the signature will also be attributed to the person, unless the person establishes forgery, fraud, etc.

The commentary notes further that a signature is not the only means of attributing a record to a person. It gives the example of a facsimile transmission that may be attributed to a person because of information printed across the top of a page or letterhead that identifies the sender. In addition: "Certain information may be present in an electronic environment that does not appear to attribute but which clearly links a person to a particular record. Numerical codes, personal identification numbers, public and private key combinations all serve to establish the party to whom an electronic record should be attributed." The section applies also to "click-through" transactions, where establishing that a record is to be attributed to a particular person who acted anonymously presents particular challenges.

(b) Once a record or signature has been attributed to a person, the effect of the record or the signature is established in light of the surrounding circumstances, including other pertinent legal requirements.

SECTION 11. EFFECT OF CHANGE OR ERROR. If a change or error in an electronic record occurs in a transmission between parties to a transaction, the following rules apply:

(1) If the parties have agreed to use a security procedure to detect changes or errors and one party has conformed to the procedure, but the other party has not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the changed or erroneous electronic record.

(2) In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, the individual:

(A) promptly notifies the other person of the error and that the individual did not intend to be bound by the electronic record received by the other person;

(B) takes reasonable steps, including steps that conform to the other person's reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record; and

(C) has not used or received any benefit or value from the consideration, if any, received from the other person.

(3) If neither subdivision (1) nor subdivision (2) applies, the change or error has the effect provided by other law, including the law of mistake, and the parties' contract, if any.

(4) Subdivisions (2) and (3) may not be varied by agreement.

COMMENT

This section addresses changes and errors occurring in transmissions between parties, whether the participants are individuals or an individual and a machine.

Subdivision (1) applies where the parties have agreed to use a security procedure. The provision operates against the non-complying party, who is, according to the UETA commentary, "the party in the best position to have avoided the error or change, regardless of whether that person is the sender or a receiver." Where a security procedure would not have detected a particular error or change, "the parties are left to the general law of mistake to resolve the dispute."

Subdivision (2) applies only to errors made by individuals dealing with the electronic agent of the other party. The individual may avoid the effect of the mistake, since it may be impossible for the mistaken person to correct an error made while dealing with an electronic agent, as opposed to another individual. If the electronic agent makes a mistake, the error would be resolved under subdivision (1) or (3), as applicable, and under the general law of mistake. The subdivision sets out three requirements the individual must meet before he may take advantage of the subdivision.

Subdivision (4) prohibits the parties from varying the provisions of subdivisions (3) and (4) by agreement. The UETA commentary concludes:

Paragraph (2) provides incentives for parties using electronic agents to establish safeguards for individuals dealing with them. It also avoids unjustified windfalls to the individual by erecting stringent requirements before the individual may exercise the right of avoidance under the paragraph. Therefore, there is no reason to permit parties to avoid the paragraph by agreement.

SECTION 12. NOTARIZATION AND ACKNOWLEDGMENT. If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.

COMMENT

This section permits notaries public and other officials to act electronically. However, the section does not affect or eliminate any other other applicable law.

The UETA commentary provides the following examples:

1) Buyer wishes to send a notarized Real Estate Purchase Agreement to Seller via e-mail. The notary must appear in the room with the Buyer, satisfy him/herself as to the identity of the Buyer, and swear to that identification.

2) Buyer seeks to send Seller an affidavit averring defects in the products received. A court clerk, authorized under state law to administer oaths, is present with Buyer in a room. The clerk administers the oath and includes the statement of the oath, together with any other requisite information, in the electronic record to be sent to the Seller. Upon administering the oath and witnessing the application of Buyer’s electronic signature to the electronic record, the clerk also applies his electronic signature to the electronic record. So long as all substantive requirements of other applicable law have been fulfilled and are reflected in the electronic record, the sworn electronic record of Buyer is as effective as if it had been transcribed.

SECTION 13. RETENTION OF ELECTRONIC RECORDS; ORIGINALS.

(a) If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record which:

(1) accurately reflects the information set forth in the record after it was first generated in its final form as an electronic record or otherwise; and

(2) remains accessible for later reference.

(b) A requirement to retain a record in accordance with subsection (a) does not apply to any information the sole purpose of which is to enable the record to be sent, communicated, or received.

(c) A person may satisfy subsection (a) by using the services of another person if the requirements of that subsection are satisfied.

(d) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with subsection (a).

(e) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with subsection (a).

(f) A record retained as an electronic record in accordance with subsection (a) satisfies a law requiring a person to retain a record for evidentiary, audit, or like purposes, unless a law enacted after the effective date of this act specifically prohibits the use of an electronic record for the specified purpose.

(g) This section does not preclude a public agency, as defined in section 1-200 of the general statutes, of this state from specifying additional requirements for the retention of a record subject to the agency's jurisdiction.

COMMENT

This section addresses the matter of electronic records retained as originals.

(a) This subsection requires accuracy and the ability to access information at a later time. So long as the requirements of the subsection are met, parties may convert original paper records to electronic records. The subsection refers to the information contained in an electronic record, rather than to the record itself, "as a matter of clarity that the critical aspect in retention is the information itself."

Subsections (b) and (c) provide that certain "ancillary information" or the use of third parties does not "affect the serviceability of records and information to be retained electronically."

(d) Electronic records may satisfy a requirement that a record be maintained in its original form.

(e) This subsection permits electronic retention of checks, provided the electronic record contains all of the information found on the check.

Subsections (f) and (g) address the effect of other record retention statutes as noted.

Subsection (g) permits public agencies to impose other requirements for the records that they maintain. For example, while the sale of real property may be completed electronically, the accompanying deed must be reduced to paper for recording if the town clerk in the town in which the deed is to be recorded so requires.

SECTION 14. ADMISSIBILITY IN EVIDENCE. In a proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form.

COMMENT

Similarly to Section 7 of this act, this section prevents an electronic record or signature from being excluded from evidence solely because of the medium in which it exists. Nothing in the section relieves a party from establishing the necessary foundation for admission of the electronic record or signature.

SECTION 15. AUTOMATED TRANSACTION. In an automated transaction, the following rules apply:

(1) A contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents' actions or the resulting terms and agreements.

(2) A contract may be formed by the interaction of an electronic agent and an individual, acting on the individual's own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance.

(3) The terms of the contract are determined by the substantive law applicable to it.

COMMENT

This section recognizes contracts formed by machines functioning as electronic agents for individuals.

(1) This subdivision addresses the issue of the requisite intent by the parties at the time a contract is formed by machines. The UETA commentary to this section explains: "When machines are involved, the requisite intention flows from the programming and use of the machine."

(2) This subdivision validates a "click-through" transaction between an individual and a machine. The UETA commentary posits the following examples to illustrate the application of the subdivision:

It is possible that an anonymous click-through process may result in no recognizable legal relationship, e.g., A goes to a person’s website and acquires access without in any way identifying herself, or otherwise indicating agreement or assent to any limitation or obligation, and the owner’s site grants A access. In such a case, no legal relationship has been created.

On the other hand, it may be possible that A’s actions indicate agreement to a particular term. For example, A goes to a website and is confronted by an initial screen which advises her that the information at this site is proprietary, that A may use the information for her own personal purposes, but that, by clicking below, A agrees that any other use without the owner’s permission is prohibited. If A clicks "agree" and downloads the information and then uses the information for other, prohibited purposes, should not A be bound by the click? It seems the answer properly should be, and would be, yes.

SECTION 16. TIME AND PLACE OF SENDING AND RECEIPT.

(a) Unless otherwise agreed between the sender and the recipient, an electronic record is sent when it:

(1) is addressed properly or otherwise directed properly to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record;

(2) is in a form capable of being processed by that system; and

(3) enters an information processing system outside the control of the sender or of a person that sent the electronic record on behalf of the sender or enters a region of the information processing system designated or used by the recipient which is under the control of the recipient.

(b) Unless otherwise agreed between a sender and the recipient, an electronic record is received when:

(1) it enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record; and

(2) it is in a form capable of being processed by that system.

(c) Subsection (b) applies even if the place the information processing system is located is different from the place the electronic record is deemed to be received under subsection (d).

(d) Unless otherwise expressly provided in the electronic record or agreed between the sender and the recipient, an electronic record is deemed to be sent from the sender's place of business and to be received at the recipient's place of business. For purposes of this subsection, the following rules apply:

(1) If the sender or recipient has more than one place of business, the place of business of that person is the place having the closest relationship to the underlying transaction.

(2) If the sender or the recipient does not have a place of business, the place of business is the sender's or recipient's residence, as the case may be.

(e) An electronic record is received under subsection (b) even if no individual is aware of its receipt.

(f) Receipt of an electronic acknowledgment from an information processing system described in subsection (b) establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received.

(g) If a person is aware that an electronic record purportedly sent under subsection (a), or purportedly received under subsection (b), was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law. Except to the extent permitted by the other law, the requirements of this subsection may not be varied by agreement.

COMMENT

This section establishes default rules for sending and receiving electronic records. The section addresses only when a record was sent or received and the location of the sending or receiving. It does not address the condition of the record when sent or received or the effect of the sending or receiving, but leaves such issues to other law.

(a) This subsection provides rules for determining when a record was sent. The record must have been addressed or directed to a system designated by the recipient. The UETA commentary concludes: "In order to send within the meaning of this section, there must be specific information which will direct the record to the intended recipient."

The record will be deemed sent once it leaves the control of the sender, or comes under the control of the recipient. From the UETA commentary: "Records sent through e-mail or the internet will pass through many different server systems. Accordingly, the critical element when more than one system is involved is the loss of control by the sender."

The commentary goes on to give the example of an e-mail sent within, e.g., a university or corporate system from one employee to another. The e-mail stays within the same system from sender to receiver and thus, technically, never leaves the sender’s control. In that case, to be deemed "sent," the e-mail must "arrive at a point where the recipient has control."

(b) This subsection provides that a record is received when it enters a system designated by the recipient, in a form able to be processed by the system, from which the recipient can retrieve it. The recipient need not actually retrieve the record for the record to be deemed received. This provision avoids the situation where the recipient leaves a message in a server so as to avoid receiving the message.

The subsection allows the recipient to designate a particular system for receipt of a record. Thus if A designates his home e-mail address as the system to receive a particular record, sending that record to his work e-mail will not suffice for the record to be received under this act. If A actually sees the record in his work e-mail, other law will determine whether actual knowledge constitutes receipt.

Subsections (c) and (d) establish default rules for determining where a record will be deemed sent or received. The UETA explains the provision:

The focus is on the place of business of the recipient and not the physical location of the information processing system, which may bear absolutely no relation to the transaction between the parties.... Accordingly, where the place of sending or receipt is an issue under other applicable law, e.g., conflict of laws issues, tax issues, the relevant location should be the location of the sender or recipient and not the location of the information processing system.

(e) This subsection makes clear that the recipient need not have notice that the record is in the recipient’s system to have received the record.

(f) This subsection provides that the section addresses only the fact of receipt and does not establish the content or quality of the record.

(g) This subsection again confirms that the act contemplates application of other law in these matters. Parties may not vary the requirements imposed by the section, except to the extent that other applicable law permits such variation.

SECTION 17. TRANSFERABLE RECORDS.

(a) In this section, "transferable record" means an electronic record that:

(1) would be a note under Article 3 of the Uniform Commercial Code, or other similar law, or a document under Article 7 of the Uniform Commercial Code, or other similar law, if the electronic record were in writing; and

(2) the issuer of the electronic record expressly has agreed is a transferable record.

(b) A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred.

(c) A system satisfies subsection (b), and a person is deemed to have control of a transferable record, if the transferable record is created, stored, and assigned in such a manner that:

(1) a single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in subdivisions (4), (5), and (6), unalterable;

(2) the authoritative copy identifies the person asserting control as:

(A) the person to which the transferable record was issued; or

(B) if the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred;

(3) the authoritative copy is communicated to and maintained by the person asserting control or its designated custodian;

(4) copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control;

(5) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(6) any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

(d) Except as otherwise agreed, a person having control of a transferable record is the holder, as defined in Section 1-201(20) of the Uniform Commercial Code, or other similar law, of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing under the Uniform Commercial Code, or other similar law, including, if the applicable statutory requirements under Section 3-302(a), 7-501, or 9-308 of the Uniform Commercial Code, or other similar law, are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated, or a purchaser, respectively. Delivery, possession, and indorsement are not required to obtain or exercise any of the rights under this subsection.

(e) Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writings under the Uniform Commercial Code, or other similar law.

(f) If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record. Proof may include access to the authoritative copy of the transferable record and related business records sufficient to review the terms of the transferable record and to establish the identity of the person having control of the transferable record.

COMMENT

This section provides for the creation, transferability and enforceability of electronic note and document equivalents as against the issuer or obligor. The purpose of the section is to establish a means by which transactions involving paper promissory notes may be completed electronically. The UETA commentary observes:

Section [17] is a singular exception to the thrust of this Act to simply validate electronic media used in commercial transactions. Section [17] actually provides a means for expanding electronic commerce. It provides certainty to lenders and investors regarding the enforceability of a new class of financial services.

(a) Only the equivalent of paper promissory notes and paper documents of title may be created as transferable records. The UETA drafters chose to limit the section to these documents because:

Notes and Documents of Title do not impact the broad systems that relate to the broader payments mechanisms related, for example, to checks. Impacting the check collection system by allowing for "electronic checks" has ramifications well beyond the ability of this Act to address. Accordingly, this Act excludes from its scope transactions governed by UCC Articles 3 and 4. The limitation to promissory note equivalents... is quite important in that regard because of the ability to deal with many enforcement issues by contract without affecting such systemic concerns.

In addition to limiting its coverage only to paper equivalents of notes or documents, the section requires that the issuer of the record expressly agree that the electronic record is to be considered a transferable record. The purpose of the restriction is to assure that a transferable record may be created only at the time of issuance by the obligor.

(b) The matter of "control" over an electronic record is of paramount importance. From the UETA commentary: "More precisely, "control"... serves as a substitute for delivery, indorsement and possession of a negotiable instrument or negotiable document of title."

(c) The system chosen to evidence the transfer of interests in the transferable record must be reliable and must meet the requirements of subsection (c). The commentary to the comparable UETA subsection notes that: "Of greatest importance in the system used is the ability to securely and demonstrably be able to transfer the record to others in a manner which assures that only one "holder" exists. The need for such certainty and security resulted in the very stringent standards for a system outlined in subsection (c)."

(d) This subsection does not address issues related to enforceability against intermediary transferees and transferors, warranty liability, and the effect of taking the transferable record on the underlying obligation. These matters must be determined contractually among the parties or by other law, including general contract law or by analogizing rules from Article 3 of the Uniform Commercial Code.

However, the subsection does provide rules for determining the rights of a party in control of a record. Such rights are determined under this subsection and not under other law, although the subsection does incorporate certain provisions of Articles 3, 7 and 9 for the purposes of the subsection. Under subsection (d), the person in control of a transferable record that is the equivalent of a paper promissory note or document of title becomes a holder of the record and, if he meets the same requirements as for an equivalent paper document, may become a holder in due course. The person would then have the same rights as a holder or holder in due course of an equivalent paper document.

(e) This subsection grants the obligor of a transferable record the same rights as those of an obligor under an equivalent paper document.

(f) This subsection gives the obligor the right to verify that the person having control of the record is the person entitled to payment. Such right of verification includes the obligor’s having access to the transferable record and other relevant information.

SECTION 18. SEVERABILITY CLAUSE. If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

SECTION 19. ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. THE PROVISIONS OF THIS ACT GOVERNING THE LEGAL EFFECT, VALIDITY, OR ENFORCEABILITY OF ELECTRONIC RECORDS OR SUGNATURES, AND OF CONTRACTS FORMED OR PERFORMED WITH THE USE OF SUCH RECORDS OR SIGNATURES CONFORMS TO THE REQUIREMENTS OF SECTION 102 OF THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT, PUB. L. NO. 106-229, 114 STAT. 464 (2000), AND SUPERSEDE, MODIFY AND LIMIT THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.