New electronic-commerce laws spark changes on the state and federal level.

• Author: CONLEY, JOHN M.

On Oct. 30, 2000, two significant electronic-commerce laws took effect. The federal Electronic Signatures in Global and National Commerce Act -- the E-Sign Act -- applies nationwide to all transactions "affecting interstate or foreign commerce." This language is not entirely clear, but it probably includes all transactions between parties in different states or countries as well as those transactions within a single state that involve multistate or international business deals. The second law, North Carolina's version of the Uniform Electronic Transactions Act, technically applies only within the state. However, North Carolina is joining more than 20 other states that have enacted UETA, and it is likely to be adopted by a large majority of the states within the next year.

Paperless transactions

In most situations, it will not make any difference which law controls a particular transaction since their basic principles are the same. The purpose of both is to promote paperless transactions and the use of electronic signatures.

Both acts state that no signature, contract or other record may be denied legal effect solely because it's in electronic form. In other words, electronic signatures, contracts and records have the same legal status as their old-fashioned paper counterparts. Note that the new laws deal only with the form of documents and do not change the traditional rules that govern how contracts are made, interpreted and enforced. Both laws also provide that most legal record-keeping requirements can be met by retaining electronic records, providing they are accurate and accessible.

Encourage, not require

Neither of these laws requires anyone to do business electronically. The new laws are intended to permit and encourage e-commerce.

Under NCUETA, both parties to a transaction must consent to do business electronically. "Consent" is a very loose concept, however. According to the official comments of the authors of NCUETA, it may be enough for a person to give a business card with his e-mail address on it to a potential customer or for a consumer to order a book from an online seller. A party that agrees to conduct one transaction electronically still can refuse to, do so in future transactions. The federal E-Sign Act says simply that no one is required to conduct business electronically.

Under both acts, an agreement to conduct a transaction electronically does not mean that you have agreed to any particular contract. That is a...