Understanding the UETA: a Brief Look at the Uniform Electronic Transactions Act

UETA with e-signature

Disclaimer: This piece is not meant to serve as legal advice. We are not lawyers. We don’t even play lawyers on TV.

As a kid, you probably felt like a “pinkie swear” could have held up in court as much as a notarized affidavit. Well, it doesn’t. Neither does a handshake (with or without spit) or even giving your “word” that something is true or that you agree to the terms an agreement. For the longest time, one of the most consistent ways to prove the authority of a transactional agreement was good ole’ ink on paper. Well, that all changed when the Uniform Electronic Transactions Act became effective as law.  

What is the UETA?

The Uniform Electronic Transactions Act, or UETA, is an act that basically applies legal authority to electronic documents and electronic signatures/agreements. There once was a time when agreeing to terms or receiving terms in writing literally meant a physical signature for a physical document. Yep — actual paper. Banks were required to keep physical copies of all checks for their members. As electronic banking started to expand in the ‘80s and ‘90s, the cost of producing, storing, and managing all of these paper copies of transactions that had never existed on paper was beginning to slow the pace of business.

In order to help keep physical paperwork from gumming up the speed of business, the Uniform Electronic Transactions Act (UETA) was written by the (*takes deep breath*) National Conference of Commissioners on Uniform State Laws, or NCCUSL (an acronym that doesn’t seem to make things much easier).

What does the UETA do?

The UETA goes far beyond just making regulations for electronic documents.  Like many other acts, the UETA helps to officially define certain terms that had been, up until that point, alien to courts and often either misdefined. The act creates the legal definition of an electronic document, but also what is considered agreeing to the terms outlined by the document. For instance, if terms and conditions are required to be provided in writing, could they be sent to you in an email? Could they be sent to you in audio format? Could you agree to the terms with a voice command? Terms like these and many others are defined in Section 2.

How far does the UETA reach?

While other regulations may cover other criteria, the UETA only pertains to business, commercial, or governmental transactions. So, while an e-signature on a lease would fall under the terms of the UETA, an email about a non-business related agreement between two individuals may not be subject to the act.

What does the UETA protect?

Pre-UETA, the question of whether or not an electronic document could be admissible as evidence in court was pretty much up to each individual court. In the UETA, it is ruled that such electronic records are not be dismissed as evidence because of their electronic nature. The same section (Section 7) also claims that terms and required signatures for certain transactions can be in digital form. Still, for the sake of full disclosure and record keeping, the act claims that if electronic documents and signatures are allowed, copies or records of these must be given to all parties involved.

Still want to know more? Read the entire UETA here.

Is your document management system in compliance with the UETA?

While we can rejoice in not having to keep file cabinets loaded with paper records, electronic content management systems still need to be UETA compliant. If your document management system doesn’t have built-in UETA compliancy features, you could potentially find yourself in violation of any number of sections of the act. In order to make sure your system is UETA compliant, speak to one of the document management specialists from JD Young.