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Overview of Electronic Sigantures in E-Commerce

May 18, 2008
Under California Uniform Electronic Transactions Act electronic records and electronic signatures relating to a transaction are covered. The act specifically exempts transactions subject to other laws. It lists the following exceptions:

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

(2) Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1107 and 1206.

(3) Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing
with Section 11101) of the Uniform Commercial Code.

The act also specifically lists a long laundry list of exemptions. This list of transactions is described in other parts of the Business and Professions Code, the Civil Code, and other sections. Among others it identifies transactions under Business and Professions Code Section 17511.5, which pertains to telemarketers. So telemarketers are exempt under this act, but they may be covered under another act.

The act also specifies that the transaction that is subject to the electronic transaction act is also subject to other applicable substantive law. The act clearly indicates that it is not the intent to expand or constrict existing law.

The act specifies that even though there is a long list of exceptions that it does not mean that the transaction is excluded in its entirety from regulations pertaining to electronic transactions or that the transaction cannot occur by electronic means. Its only intent is to prohibit the transaction through electronic means if it is not allowed by other statute. Essentially the transaction is allowed and regulated by other statutes addressing those specific transactions whether in traditional manner or by electronic means.

The Uniform Electronic Transaction Act only applies to transactions taking place on or after January 1, 2000. Electronic record or electronic signatures created, generated, sent, communicated, received, or stored before then would not fall under this act.

The Act also makes it clear that it is not intended to impose an affirmative duty to take action. It states that it is 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.

This act only applies to a transaction between parties each of which has agreed to conduct the transaction 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. Except for a separate and optional agreement the primary purpose of which is to authorize a transaction to be conducted by electronic means, an agreement to conduct a transaction by electronic means may not be contained in a standard form contract that is not an electronic record. An agreement in such a standard form contract may not be conditioned upon an agreement to conduct transactions by electronic means. An agreement to conduct a transaction by electronic means may not be inferred solely from the fact that a party has used electronic means to pay an account or register a purchase or warranty. These statutory requirements may not be varied by agreement.

A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. If a seller sells goods or services by both electronic and non-electronic means and a buyer purchases the goods or services by conducting the transaction by electronic means, the buyer may refuse to conduct further transactions regarding the goods or services by electronic means. These requirements likewise may not be varied by agreement.
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