E-commerce and Legislation: Consumer Protection and Digital Signatures

Consumer protection is a noteworthy political issue for any state considering adoption of Unified ETA. To understand the issue, it is important to have some familiarity with the federal Electronic Signatures in Global and National Commerce Act (E-Sign), which generally became effective on October 1, 2000. 15 USC §§ 7001 to 7031. E-Sign is similar to unified ETA in many ways and was enacted to resolve the lack of uniformity among state laws and ensure the enforceability of electronic signatures and contracts in interstate commerce, regardless whether individual states adopt unified ETA. Seeking to preserve states' rights, E-Sign includes complex and narrow "exemption to preemption" provisions, which allow states to opt-out of a major portion of E-Sign. States may opt-out by adopting the uniform version of UETA or alternative procedures and requirements, which are consistent with E-Sign. 15 USC §7002(a). Oregon's statute was carefully crafted to fall within this exemption by adopting both the uniform version of unified ETA and additional provisions consistent with E-Sign.

One of the significant distinctions between E-Sign and ETA is that E-Sign includes detailed consumer protection provisions not found in unified ETA. See 15 USC §7001(c). Because of the exemption to preemption mentioned above, a state adoption of the uniform version of unified ETA arguably preempts E-Sign's consumer protection provisions. The Oregon Legislature made a policy decision to adopt the consumer protection provisions of E-Sign into Oregon law. Consequently, 2001 Oregon Laws, chapter 535, section 24 contains the consumer protection provisions found in E-Sign with no substantive change. Those provisions contain certain criteria, which must be met before various statutory notice requirements can be satisfied by electronic means and preclude the use of electronic notice for actions such as termination of utility services or residential eviction.

It should be noted that unified ETA does contain more general requirements regarding the presentation of electronic records. According to section 8, if certain information is required by law to be provided, sent, or delivered in writing, an electronic record must be capable of retention by the recipient at the time of receipt to satisfy that law. Capable of retention includes the ability of the recipient to print or store the electronic record. Any specific format or presentation requirements specified in a law must also be complied with in the electronic record. If any sender inhibits the ability of a recipient to store or print an electronic record, the record is not enforceable against the recipient.

In discussing "electronic signatures," one should note the important distinction between this term and "digital signatures." As mentioned, any electronic sound, symbol or process may be deemed an electronic signature if the requisite intent to sign is present. Digital signatures, on the other hand, are technology specific forms of electronic signatures, which offer additional advantages such as authentication and encryption. Documents executed with digital signatures provide greater assurance of the identity of the signatory and are more difficult to alter and forge.

Prior to the passage of 2001 Oregon Laws, chapter 535, Oregon had adopted an Electronic Signature Act, which thinly addressed the enforceability of electronic and digital signatures and provided an infrastructure for registering companies, which issue digital signatures (Certification Authorities). Sections 31 to 36 of 2001 Oregon Laws, chapter 535 significantly amend the Oregon Electronic Signature Act by renaming it the "Digital Signature Act" and reconciling it with UETA. The amendment limits the Digital Signature Act's application to digital signatures only and makes appropriate reference to the newly adopted Unified ETA provisions, which govern the enforceability of electronic signatures.