Digital Signatures & E-Commerce Legalities

With the popularity of e-commerce (electronic commerce)growing at a rapid pace, we need to remember that there are certain legal issues that pertain. In other words, there are laws in place to help protect both the consumer and the seller during e-commerce transactions. The major law regarding internet commerce (also known as e-commerce) is the Uniform Electronic Transactions Act of 1999 (UETA). It mainly involves digital signatures. Here are the details you need to be aware of:

The Uniform Electronic Transactions Act of 1999 (UETA) was enacted to provide guidance in the e-commerce (internet buying and selling)field. With the increasing amount of transactions occurring online (electronically), the Act states that “the effect of any electronic record or signature must be determined from the surrounding circumstances, including the intent of the party creating the record or signature, applicable laws, and commercial practice.” In other words, real life law exists for e-commerce.

There is not much differentiation between e-commerce transactions electronically (online) and offline. When one clicks on the “I Agree” after reading various online sites’ “rules and regulations,” one is in effect “signing” or agreeing to the contract. The Act further provides that a signature may not be deemed unenforceable solely because it is in electronic form.This is what a digital signature is.

The UETA broadly defines electronic (digital)signatures to mean “an electronic sound, symbol, or process attached to…a record and executed or adopted by a person with the intent to sign the record.”

The exemptions to the UETA include any statute, regulation, or law regarding:
Wills, testamentary trusts, estates
� Adoption, divorce, and family law
� Court orders or notices, and official court documents
� Notice of cancellation of utility service
âÂ?¢ Any notice regarding an individual’s rental of their primary residence
� Documents required for transporting hazardous materials
� Notice of recall & notice of health or life insurance cancellation

What about notarization? The Uniform Electronic Tranctions Act states that “if a law requires a signature or record to be notarized, acknowledged, verified, or made under oath…the requirement is satisfied if the electronic (digital)signature of the person authorized to perform those acts….is attached to the record”. The obtaining of the notary seal is left for other laws (according to Uniform Electronic Transactions Act).
The use of electronic and/or digital signatures during e-commerce (internet transactions) has sparked strong pros and cons. That could be an entire article of its own and will not be covered here.
To quote Bill Gates: “There’ll be two types of businesses in the year 2000: those online and those out of business.”

The internet commerce (e-commerce) world is an exciting world ready for another player – you and your business.