Electronic Transactions: You Can Leave Paper Behind...For Almost Everything

The Uniform Electronic Transactions Act (UETA), codified in California Civil Code §§ 1633.1 through 1633.17, applies to most transactions, excluding trusts, wills, and initiative petitions. (See Cal. Civ. Code § 1633.3 for the full list of exceptions). The UETA provides that electronic records, signatures, or contracts may not be denied legal effect because they are in electronic form, rather than in paper form. Further, electronic records are sufficient for a legally required “writing,” and electronic signatures are sufficient for a legally required “signature.”

Further, the California Evidence Code allows print outs of electronic records to be considered “originals.” Such documents are admissible so long as they can be authenticated. For an electronic signature, the authentication question will often turn on whether the court can determine the signature was the “act of the person.” The best practice to ensure this finding will be made is to have a unique username and password for the signor.

Companies and individuals can feel more comfortable moving to primarily electronic transactions and document storage because of the combined effects of the UETA and the Evidence Code sections which increase the ease of admitting electronic records and signatures.

The company should have clearly developed, written procedures that outline how the company handles paper and electronic documents. These procedures might include storage procedures (i.e. naming conventions for documents and folders in electronic storage system), document retention periods, and other such guidelines. Further, the company should work to ensure each person follows these written procedures on a regular basis. The key point is that a company will want to be able to convince the judge or jury that they are honest and consistent in their handling of electronic transactions, records, and signatures.

The UETA and the Evidence Code provide authorization to conduct most business electronically, and the written procedures will ensure your interests are further protected should any litigation arise from these electronic transactions.

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