In response to the growing role that technology plays in the transaction of
business, both the federal government and the State of New Hampshire have
enacted so called “E-SIGN” laws. These new laws remove uncertainty as to
the enforceability of online transactions, while cutting transaction costs and
otherwise facilitating contracting throughout various industries.
The Electronic Signatures in Global and National Commerce Act (the “Federal
Act”) went into effect on October 1, 2000. Generally, the Federal Act
gives electronic signatures, contracts and other records relating to
“transactions in or affecting interstate or foreign commerce” the same force in
law as the paper versions. Essentially, the Federal Act provides that (i)
a signature, contract or other record may not be denied legal effect, validity
or enforceability solely because it is in electronic form, and (ii) a contract
may not be denied legal effect, validity or enforceability solely because an
electronic signature or electronic record was used in its formation.
For purposes of the Federal Act, an “electronic signature” is an electronic
sound, symbol or process, attached to or logically associated with a contract or
other record and executed or adopted by a person with the intent to sign the
record. An “electronic record” is defined as a contract or other record,
created, generated, sent, communicated, received or stored by electronic
means. A “transaction” includes the sale, lease or licensing of personal
property, services and real property.
In general, the Federal Act does not limit or supersede any requirement by a
federal or state regulatory agency that records be filed in accordance with
specified standards or formats. Thus, each agency may establish its own
rules for electronic signatures.
The Federal Act further permits states to modify its general provisions under
certain circumstances, including through the enactment of adoption of the
Uniform Electronic Transactions Act (UETA). In September 2001, New
Hampshire did just that and the UETA is now codified as RSA § 294-E.
The fundamental purpose of RSA § 294-E is to make the law uniform with
respect to the legal validity of electronic signatures in electronic
transactions and electronic commerce. As with the Federal Act, New
Hampshire’s initiative seeks to establish electronic records and signatures as
the legal equivalents of paper writings and manually-signed signatures, thereby
helping to remove barriers to electronic commerce.
RSA § 294-E mirrors the Federal Act with its clear language deeming that a
record or signature may not be denied legal effect or enforceability due to its
electronic form. Additionally, a contract may not be denied legal effect
or enforceability because an electronic record was used in its formation.
In fact, where the law requires a record to be in writing or requires a
signature, an electronic record or signature satisfies the legal
requirement.
Significantly, RSA § 294-E broadly defines “transaction” as “an action or set
of actions occurring between 2 or more persons relating to the conduct of
business, commercial, or government affairs.” Nonetheless, the statute
limits its scope by expressly providing that RSA § 294-E does not apply to
transactions pursuant to laws governing the creation and execution of wills,
codicils, or testamentary trusts or to transactions governed by the Uniform
Commercial Code except those under Sections 1-107 and 1-206, Article 2, and
Article 2A.
While New Hampshire’s efforts in essence encourage electronic commerce, RSA
294-E does not require parties to use electronic records or electronic
signatures. Rather, the statute only applies to transactions where both
parties have agreed to conduct the transaction by electronic means and sets out
the requirements for doing so. The statute even addresses how a signature
or record may be electronically notarized, acknowledged, verified, or made under
oath. In such cases, the electronic signature of a person authorized to
perform such act, together with all other information required to be included by
other applicable law, must be attached to or logically associated with the
signature or record.
Other provisions of RSA 294-E govern such aspects as the effect of a change
or an error in an electronic record, the retention of electronic records, and
the elements necessary for deeming an electronic record sent or received.
In
sum, both our Federal and State governments have thought it appropriate to ease
the barriers to electronic commerce by efforts to codify and unify the laws
governing electronic signatures. Such efforts are significant steps toward
advancing the role of electronic transactions in business.
