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The United States' Attempt To Catch E-Commerce
As we move into the 21st Century, the speed and manner in which we conduct business is evolving into a more rapid, streamlined and efficient median. Fading into the past are the old paper transactions and processes including mail, forms and paper contracts that have now given way to the instant electronic and digital transactions such as e-mail, e-commerce and electronic transactions.
In an effort to allow the legal system to catch-up to the present pace of the so-called Information Age, Congress passed the "Electronic Signatures in Global and National Commerce Act". This new law represents a landmark step in the evolving legal framework governing electronic commerce, commonly known as E-commerce. The fundamental purpose of this new legislation is to establish that a signature, contract or transaction involving interstate or foreign commerce, may not be denied legal effect or enforceability simply because it is in an electronic form. This departure from the old pen and paper mind-set marks not only a legal shift in the application of electronic commerce, but a fundamental cultural shift to the digital age for our entire society.
The Electronic Signatures in Global and National Commerce Act, hereafter referred to as the Electronic Signatures Act, is broken down into three major areas that affect everyday transactions: Title I affects consumers and the market place; Title II affects negotiable instruments and transferable records; and Title III affects e-commerce relating to international transactions and the regulations that reconcile U.S. law with the laws of other nations.
Consumers and E-Commerce
For the average person or consumer, Title I has by far the most broad and far-reaching applications concerning everyday business transactions in the United States. At the heart of Title I is the focus on consumer consent. The law is well crafted to provide the safeguards and protections that allow consumers to conduct electronic transactions in a safe, secure and private manner.
In these consumer transactions, an electronic record may be substituted for a record otherwise required in writing, only if: (1) the consumer affirmatively consents to receive an electronic record and has not withdrawn their consent; and (2) the consumer, prior to consenting, is provided with a clear and conspicuous statement informing the consumer of rights or options to have the record provided or made available on paper, and the right of the consumer to withdraw the consent to electronic records and any conditions, consequences or fees in the event their consent is withdrawn. Furthermore, the consumer participating in the transaction must be provided, prior to consenting, with a clear and conspicuous statement describing the hardware and software requirements for access to and retention of the electronic record.
The consumer must also be informed on how, after consenting, he or she may, upon request, obtain a paper copy of the electronic records, and whether any fee will be charged for such copy. Finally, the consumer must receive a description of the procedures that he or she must use to withdraw their consent. These technical safeguards, which are built into the Electronic Signatures Act, demonstrate the legal need to protect consumers in an ever-changing digital world.
Business Transactions
Title II of the Electronic Signatures Act deals primarily with transferable records such as negotiable instruments, promissory notes and similar documents used, for example, in real estate transactions. The development and implementation of an electronic system will produce significant cost reductions and streamline transactional timetables. For example, at a real estate closing, it may not be necessary to overnight certain documents containing original signatures - a requirement that usually adds time, costs and unnecessary burdensome delays to the underlying transaction. Such innovations that now have full weight and authority of the law will speed these everyday transactions into the digital and electronic age.
International Trade
Title III, dealing primarily in international commerce, allows United States businesses to instantly transfer and conduct significant portions of complex transactions, without regard to geographic distances, time zone changes and the reliance on mail or overnight service to confirm and finalize the deal. This revolutionary legal framework allows businesses in the United States to interact with other entities throughout the world as if all were situated in the same office complex. This approach to digital commerce reduces overhead, eliminates transactional errors and instantly confirms whether or not the contract will be legally effective.
The underlying principles encompassing the Electronic Signatures Act also provide that accuracy, legal rights and privacy are protected and not sacrificed for sake of ease and instant confirmation.
Judicial Safeguards
There are specific exceptions built into the legal framework that protect society at large. For example, the Electronic Signatures Act cannot be applied to Court Orders or notices or official court documents (including briefs, pleadings and other writings), required to be executed in connection with a court proceeding; any notice of or the cancellation or termination of utilities, default, acceleration, repossession, foreclosure or eviction, or the right to cure, under a credit agreement secured by, or rental agreement for, a preliminary residence or a primary residence of an individual; the cancellation or termination of health insurance benefits or life insurance benefits or the consumer recall of products or the material failure of a product that risks the public health or safety and any documentation, transaction, or contract for or the handling of hazardous materials, pesticides or other toxic or dangerous materials.
These exceptions, which are specifically designed and incorporated into the Electronic Signatures Act, ensures that the public-at-large is not placed in danger at the expense of speed and convenience of the electronic commerce system. The exceptions which are based on common sense approaches that protect consumers in the United States by safeguarding their rights.
The Electronic Signatures Act has a wide range of appeal and applicability to just about every citizen of the United States, and for that matter, every citizen of the world. Whether you are buying on-line products, such as books, toys or office supplies or filing electronic federal or state tax returns, or conducting a complex and sophisticated internal transaction, the Electronic Signatures Act allows the United States to move forward in a digital age while maintaining the highest level of security and legal protection for its people.
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