According to Wikipedia:

The Uniform Electronic Transactions Act (UETA) is one of the several United States Uniform Acts proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL). Since then 46 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted it into their own laws. Its overarching purpose is to bring into line the differing State laws over such areas as retention of paper records (checks in particular), and the validity of electronic signatures, thereby supporting the validity of electronic contracts as a viable medium of agreement.

The National Conference of Commissioners on Uniform State Laws has worked for the uniformity of state laws since 1892. It is a non-profit unincorporated association, composed of state commissions on uniform laws from each state, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. A list of states that have accepted UETA can be found at The National Conference of State Legislatures and at the NCCUSL website. While four states have not adopted UETA, they do have laws recognizing electronic signatures (Georgia, Illinois, New York, and Washington)[1].

NCCUSL

Before adoption of this Act, most states required banks to retain physical copies of all checks they process. Obviously, keeping these checks in electronic form only would vastly simplify storage and access concerns for banks. UETA aims to rectify this by streamlining and unifying these to laws to allow for electronic retention. In much the same fashion, UETA addresses the need to retain paper copies of other records and contracts, effectively giving legally binding status to electronic documents and signatures.

Breakdown Of The Law

Definitions are given in Section 2 namely
(7) Electronic record – means a record created, generated, sent, communicated, received, or stored by electronic means.

(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 the record.

Another important aspect of this definition lies in the necessity that the electronic signature be linked or logically associated with the record. In the paper world, it is assumed that the symbol adopted by a party is attached to or located somewhere in the same paper that is intended to be authenticated, e.g., an allonge firmly attached to a promissory note, or the classic signature at the end of a long contract. These tangible manifestations do not exist in the electronic environment, and accordingly, this definition expressly provides that the symbol must in some way be linked to, or connected with, the electronic record being signed. This linkage is consistent with the regulations promulgated by the Food and Drug Administration. 21 CFR Part 11 (March 20, 1997).

Section 3 gives the scope of the Act
The Scope of this Act is inherently limited by the fact that it only applies to transactions related to business, commercial (including consumer) and governmental matters. Consequently, transactions with no relation to business, commercial or governmental transactions would not be subject to this Act. Unilaterally generated electronic records and signatures which are not part of a transaction also are not covered by this Act.

Section 4 states that the Act “…applies to any electronic record or electronic signature created, generated, sent, communicated, received, or stored”

Section 5(a) states that transactions are not required to be in electronic form and 5(b) states
(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.

Section 6 – The application and intended purpose of the Act is listed. Namely “to facilitate and promote commerce and governmental transactions by validating and authorizing the use of electronic records and electronic signatures”

Section 7 gives legal recognition to electronic signatures, records and contracts
(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.

Section 8 provides that the information be available to all parties.
(a) …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.
(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.

Section 9 discusses the attribution and effect of electronic record and electronic signatures
(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.

Section 10 defines the conditions if a change or error in an electronic record occurs in a transmission between parties to a transaction.

Section 11 This Section permits a notary public and other authorized officers to act electronically, effectively removing the stamp/seal requirements.

Section 12 states that the requirement of “retention of records” is satisfied by retaining an electronic record
(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.

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

Section 13 “In a proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form.”

Section 14 discusses automated transactions.
(1) discussed situations where “…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) applies to a contract that “may be formed by the interaction of an electronic agent and an individual”.

Section 15 defines the “Time and Place” aspects of electronic transmissions.
Comment 1. This section provides default rules regarding when and from where an electronic record is sent and when and where an electronic record is received. This section does not address the efficacy of the record that is sent or received. That is, whether a record is unintelligible or unusable by a recipient is a separate issue from whether that record was sent or received. The effectiveness of an illegible record, whether it binds any party, are questions left to other law.

Section 16 outlines transferable records
(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 paragraphs (4), (5), and (6), unalterable;

Section 17-19 have been bracketed as optional provisions to be considered for adoption by each State. Among the barriers to electronic commerce are barriers which exist in the use of electronic media by State governmental agencies – whether among themselves or in external dealing with the private sector.

How do you collect signatures when you manage your contracts with clients? Do you fax, e-mail, or even send via snail mail? If you are still scanning, faxing or mailing documents in order to obtain signatures, you may be able to save a lot of time by using electronic signatures.

A common worry for those who are not utilizing electronic signatures is that it may not be as good as having a hard copy. The good news is that an electronic signature has been as legally binding as a physical signature since the Federal Electronic Signatures in Global and National Commerce (E-SIGN) Act was signed in the U.S. in 2000. And similar laws have been passed in every state, as well as in the European Union.

The Benefits

Aside from saving time by eliminating signing, scanning, faxing and mailing, there are many benefits of moving to an electronic signature system. Here are a few:

• Reduce Waiting Time – If you typically wait until you have a signed agreement to commence work, you can be waiting days or even weeks to get started. It’s faster and easier for your clients to make a couple of clicks in order to sign the agreement and give you the go ahead to get started.
• Save Money – Save on costs of paper, ink, and postage. Plus, it’s better for the environment!
• Provide Copies for All Parties – Once the agreement is signed, all parties receive a digital copy, which makes it easier for them to refer to it later and file it on their computer.
• Create an Archive – Many electronic signature services include archiving functionality so you have all of your active documents easily accessible in one place.
• Increase Security – Electronic signatures mean digital encryption, and it’s much harder to fake your identity when signing electronically.

Electronic Signature Services

There are many services that provide electronic signature services for a monthly fee or per-document fee. Some of the top features offered include:

• Customized branding
• Online reporting
• PDF encryption
• Auto-filing/archiving
• Reminder options
• Support of various document types

Here are some services you may want to explore:

• ContractPal
• DocuSign
• EchoSign
• eSigTek

One Warning…

Because electronic signatures are so quick and easy to execute, it may be tempting for the signing party not to read the agreement in it’s entirety. Part of your responsibility as the service provider (and one way to avoid any future contract disagreements) is to make sure your client not only signs your agreement, but also understands the terms. Give them time to review and ask any questions they may have before signing off. It’s quicker and easier but that doesn’t mean the content is any less important and shouldn’t be subjected to a contract review process.

Traditionally, we sign paper documents to ceremonially indicate consent, indicate the “who, why, and when” surrounding a written transaction or agreement, or execute a legally binding contract. As these activities become electronic, the procedure for“signing” them must naturally become electronic as well.

An “electronic signature” under UETA (Uniform Electronic Transaction Act) and ESIGN (Electronic Signatures in Global and National Commerce Act) is 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 the record.” (UETA § 2[8]; ESIGN § 106). Included within this definition are traditional ink signatures, typed names, or a click-through on a software program’s dialog box combined with some other identification process, including biometric measurements (such as a retinal scan or thumbprint), a digitized picture of a handwritten signature, or a complex, encrypted authentication system.

Using an electronic signature process results in a “greener” company…in more ways than one. From an environmental perspective, paper has been eliminated and mailings are reduced. There are less resources being consumed, yet more contracts are being signed. That’s the other “green”. Sales reps close deals faster, and customers will use your products and/or services much quicker. Repeat orders come in rapidly, which means your company is moving products faster and your customer satisfaction levels are higher. All of this happens because of the efficiencies gained through the use of electronic signing.

Besides the benefits listed here, upgrading your paper process to an electronic one also adds more flexibility and cash flow into your existing infrastructure. Resources and funds are now able to be allocated towards something other than filing, maintaining or storing documents. And, because of the increase in productivity most businesses find themselves able to move ahead in directions they thought would have been years away while using a paper process. Faster contract close times, a lighter environmental footprint and more satisfied customers are the benefits you can look forward to when adding electronic signatures. Actually, using an electronic signing process may make your competition turn green…with envy, if they are still using paper to close deals.