1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to commerce; enacting the Uniform Electronic 1.3 Transactions Act adopted by the National Conference of 1.4 Commissioners on Uniform State Laws; proposing coding 1.5 for new law as Minnesota Statutes, chapter 325L. 1.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7 Section 1. [325L.01] [SHORT TITLE.] 1.8 This chapter may be cited as the "Uniform Electronic 1.9 Transactions Act." 1.10 Sec. 2. [325L.02] [DEFINITIONS.] 1.11 In this chapter: 1.12 (a) "Agreement" means the bargain of the parties in fact, 1.13 as found in their language or inferred from other circumstances 1.14 and from rules, regulations, and procedures given the effect of 1.15 agreements under laws otherwise applicable to a particular 1.16 transaction. 1.17 (b) "Automated transaction" means a transaction conducted 1.18 or performed, in whole or in part, by electronic means or 1.19 electronic records, in which the acts or records of one or both 1.20 parties are not reviewed by an individual in the ordinary course 1.21 in forming a contract, performing under an existing contract, or 1.22 fulfilling an obligation required by the transaction. 1.23 (c) "Computer program" means a set of statements or 1.24 instructions to be used directly or indirectly in an information 1.25 processing system in order to bring about a certain result. 2.1 (d) "Contract" means the total legal obligation resulting 2.2 from the parties' agreement as affected by this chapter and 2.3 other applicable law. 2.4 (e) "Electronic" means relating to technology having 2.5 electrical, digital, magnetic, wireless, optical, 2.6 electromagnetic, or similar capabilities. 2.7 (f) "Electronic agent" means a computer program or an 2.8 electronic or other automated means used independently to 2.9 initiate an action or respond to electronic records or 2.10 performances, in whole or in part, without review or action by 2.11 an individual. 2.12 (g) "Electronic record" means a record created, generated, 2.13 sent, communicated, received, or stored by electronic means. 2.14 (h) "Electronic signature" means an electronic sound, 2.15 symbol, or process attached to or logically associated with a 2.16 record and executed or adopted by a person with the intent to 2.17 sign the record. 2.18 (i) "Governmental agency" means an executive, legislative, 2.19 or judicial agency, department, board, commission, authority, 2.20 institution, or instrumentality of the federal government or of 2.21 a state or of a county, municipality, or other political 2.22 subdivision of a state. 2.23 (j) "Information" means data, text, images, sounds, codes, 2.24 computer programs, software, databases, or the like. 2.25 (k) "Information processing system" means an electronic 2.26 system for creating, generating, sending, receiving, storing, 2.27 displaying, or processing information. 2.28 (l) "Person" means an individual, corporation, business 2.29 trust, estate, trust, partnership, limited liability company, 2.30 association, joint venture, governmental agency, public 2.31 corporation, or any other legal or commercial entity. 2.32 (m) "Record" means information that is inscribed on a 2.33 tangible medium or that is stored in an electronic or other 2.34 medium and is retrievable in perceivable form. 2.35 (n) "Security procedure" means a procedure employed for the 2.36 purpose of verifying that an electronic signature, record, or 3.1 performance is that of a specific person or for detecting 3.2 changes or errors in the information in an electronic record. 3.3 The term includes a procedure that requires the use of 3.4 algorithms or other codes, identifying words or numbers, 3.5 encryption, or callback or other acknowledgment procedures. 3.6 (o) "State" means a state of the United States, the 3.7 District of Columbia, Puerto Rico, the United States Virgin 3.8 Islands, or any territory or insular possession subject to the 3.9 jurisdiction of the United States. The term includes an Indian 3.10 tribe or band, or Alaskan native village, which is recognized by 3.11 federal law or formally acknowledged by a state. 3.12 (p) "Transaction" means an action or set of actions 3.13 occurring between two or more persons relating to the conduct of 3.14 business, commercial, or governmental affairs. 3.15 Sec. 3. [325L.03] [SCOPE.] 3.16 (a) Except as otherwise provided in paragraphs (b) and (e), 3.17 this chapter applies to electronic records and electronic 3.18 signatures relating to a transaction. 3.19 (b) This chapter does not apply to a transaction to the 3.20 extent it is governed by: 3.21 (1) The Uniform Commercial Code other than sections 3.22 336.1-107 and 336.1-206, Article 2, and Article 2A; and 3.23 (2) section 145C.03, subdivision 1, relating to 3.24 requirements for creation of a health care directive; section 3.25 507.24, relating to requirements for recording any conveyance, 3.26 power of attorney, or other instrument affecting real estate; 3.27 section 523.23, subdivision 3, relating to requirements for 3.28 creation of a statutory short form power of attorney; and 3.29 section 253B.03, subdivision 6b, relating to requirements for 3.30 creation of a declaration of preferences or instructions 3.31 regarding intrusive mental health treatment. 3.32 (c) This chapter applies to an electronic record or 3.33 electronic signature otherwise excluded from the application of 3.34 this chapter under paragraph (b) to the extent it is governed by 3.35 a law other than those specified in paragraph (b). 3.36 (d) A transaction subject to this chapter is also subject 4.1 to other applicable substantive law. 4.2 (e) This chapter does not apply to the creation and 4.3 execution of wills, codicils, or trusts other than trusts 4.4 relating to the conduct of business, commercial, or governmental 4.5 purposes. 4.6 Sec. 4. [325L.04] [PROSPECTIVE APPLICATION.] 4.7 This chapter applies to any electronic record or electronic 4.8 signature created, generated, sent, communicated, received, or 4.9 stored on or after the effective date of this chapter. 4.10 Sec. 5. [325L.05] [USE OF ELECTRONIC RECORDS AND 4.11 ELECTRONIC SIGNATURES; VARIATION BY AGREEMENT.] 4.12 (a) This chapter does not require a record or signature to 4.13 be created, generated, sent, communicated, received, stored, or 4.14 otherwise processed or used by electronic means or in electronic 4.15 form. 4.16 (b) This chapter applies only to transactions between 4.17 parties, each of which has agreed to conduct transactions by 4.18 electronic means. Whether the parties agree to conduct 4.19 transactions by electronic means is determined from the context 4.20 and surrounding circumstances, including the parties' conduct. 4.21 (c) If a party agrees to conduct a transaction by 4.22 electronic means, this chapter does not prohibit the party from 4.23 refusing to conduct other transactions by electronic means. 4.24 This paragraph may not be varied by agreement. 4.25 (d) Except as otherwise provided in this chapter, the 4.26 effect of any of its provisions may be varied by agreement. The 4.27 presence in certain provisions of this chapter of the words 4.28 "unless otherwise agreed," or words of similar import, does not 4.29 imply that the effect of other provisions may not be varied by 4.30 agreement. 4.31 (e) Whether an electronic record or electronic signature 4.32 has legal consequences is determined by this chapter and other 4.33 applicable law. 4.34 Sec. 6. [325L.06] [CONSTRUCTION AND APPLICATION.] 4.35 This chapter must be construed and applied to: 4.36 (1) facilitate electronic transactions consistent with 5.1 other applicable law; 5.2 (2) be consistent with reasonable practices concerning 5.3 electronic transactions and with the continued expansion of 5.4 those practices; and 5.5 (3) effectuate its general purpose to make uniform the law 5.6 with respect to the subject of this chapter among states 5.7 enacting it. 5.8 Sec. 7. [325L.07] [LEGAL RECOGNITION OF ELECTRONIC 5.9 RECORDS, ELECTRONIC SIGNATURES, AND ELECTRONIC CONTRACTS.] 5.10 (a) A record or signature may not be denied legal effect or 5.11 enforceability solely because it is in electronic form. 5.12 (b) A contract may not be denied legal effect or 5.13 enforceability solely because an electronic record was used in 5.14 its formation. 5.15 (c) If a law requires a record to be in writing, an 5.16 electronic record satisfies the law. 5.17 (d) If a law requires a signature, an electronic signature 5.18 satisfies the law. 5.19 Sec. 8. [325L.08] [PROVISION OF INFORMATION IN WRITING; 5.20 PRESENTATION OF RECORDS.] 5.21 (a) If parties have agreed to conduct transactions by 5.22 electronic means and a law requires a person to provide, send, 5.23 or deliver information in writing to another person, the 5.24 requirement is satisfied if the information is provided, sent, 5.25 or delivered, as the case may be, in an electronic record 5.26 capable of retention by the recipient at the time of receipt. 5.27 An electronic record is not capable of retention by the 5.28 recipient if the sender or its information processing system 5.29 inhibits the ability of the recipient to print or store the 5.30 electronic record. 5.31 (b) If a law other than this chapter requires a record (i) 5.32 to be posted or displayed in a certain manner, (ii) to be sent, 5.33 communicated, or transmitted by a specified method, or (iii) to 5.34 contain information that is formatted in a certain manner, the 5.35 following rules apply: 5.36 (1) the record must be posted or displayed in the manner 6.1 specified in the other law; 6.2 (2) except as otherwise provided in paragraph (d), clause 6.3 (2), the record must be sent, communicated, or transmitted by 6.4 the method specified in the other law; 6.5 (3) the record must contain the information formatted in 6.6 the manner specified in the other law. 6.7 (c) If a sender inhibits the ability of a recipient to 6.8 store or print an electronic record, the electronic record is 6.9 not enforceable against the recipient. 6.10 (d) The requirements of this section may not be varied by 6.11 agreement, but: 6.12 (1) to the extent a law other than this chapter requires 6.13 information to be provided, sent, or delivered in writing but 6.14 permits that requirement to be varied by agreement, the 6.15 requirement under paragraph (a) that the information be in the 6.16 form of an electronic record capable of retention may also be 6.17 varied by agreement; and 6.18 (2) a requirement under a law other than this chapter to 6.19 send, communicate, or transmit a record by first-class mail, 6.20 postage prepaid or regular United States mail may be varied by 6.21 agreement to the extent permitted by the other law. 6.22 Sec. 9. [325L.09] [ATTRIBUTION AND EFFECT OF ELECTRONIC 6.23 RECORD AND ELECTRONIC SIGNATURE.] 6.24 (a) An electronic record or electronic signature is 6.25 attributable to a person if it was the act of the person. The 6.26 act of the person may be shown in any manner, including a 6.27 showing of the efficacy of any security procedure applied to 6.28 determine the person to which the electronic record or 6.29 electronic signature was attributable. 6.30 (b) The effect of an electronic record or electronic 6.31 signature attributed to a person under paragraph (a) is 6.32 determined from the context and surrounding circumstances at the 6.33 time of its creation, execution, or adoption, including the 6.34 parties' agreement, if any, and as otherwise provided by law. 6.35 Sec. 10. [325L.10] [EFFECT OF CHANGE OR ERROR.] 6.36 If a change or error in an electronic record occurs in a 7.1 transmission between parties to a transaction, the following 7.2 rules apply: 7.3 (1) if the parties have agreed to use a security procedure 7.4 to detect changes or errors and one party has conformed to the 7.5 procedure, but the other party has not, and the nonconforming 7.6 party would have detected the change or error had that party 7.7 also conformed, the conforming party may avoid the effect of the 7.8 changed or erroneous electronic record; 7.9 (2) in an automated transaction involving an individual, 7.10 the individual may avoid the effect of an electronic record that 7.11 resulted from an error made by the individual in dealing with 7.12 the electronic agent of another person if the electronic agent 7.13 did not provide an opportunity for the prevention or correction 7.14 of the error and, at the time the individual learns of the 7.15 error, the individual: 7.16 (i) promptly notifies the other person of the error and 7.17 that the individual did not intend to be bound by the electronic 7.18 record received by the other person; 7.19 (ii) takes reasonable steps, including steps that conform 7.20 to the other person's reasonable instructions, to return to the 7.21 other person or, if instructed by the other person, to destroy 7.22 the consideration received, if any, as a result of the erroneous 7.23 electronic record; and 7.24 (iii) has not used or received any benefit or value from 7.25 the consideration, if any, received from the other person; 7.26 (3) if neither clause (1) nor clause (2) applies, the 7.27 change or error has the effect provided by other law, including 7.28 the law of mistake, and the parties' contract, if any; 7.29 (4) clauses (2) and (3) may not be varied by agreement. 7.30 Sec. 11. [325L.11] [NOTARIZATION AND ACKNOWLEDGMENT.] 7.31 If a law requires a signature or record to be notarized, 7.32 acknowledged, verified, or made under oath, the requirement is 7.33 satisfied if the electronic signature of the person authorized 7.34 to perform those acts, together with all other information 7.35 required to be included by other applicable law, is attached to 7.36 or logically associated with the signature or record. 8.1 Sec. 12. [325L.12] [RETENTION OF ELECTRONIC RECORDS; 8.2 ORIGINALS.] 8.3 (a) If a law requires that a record be retained, the 8.4 requirement is satisfied by retaining an electronic record of 8.5 the information in the record which: 8.6 (1) accurately reflects the information set forth in the 8.7 record after it was first generated in its final form as an 8.8 electronic record or otherwise; and 8.9 (2) remains accessible for later reference. 8.10 (b) A requirement to retain a record in accordance with 8.11 paragraph (a) does not apply to any information whose sole 8.12 purpose is to enable the record to be sent, communicated, or 8.13 received. 8.14 (c) A person may satisfy paragraph (a) by using the 8.15 services of another person if the requirements of that paragraph 8.16 are satisfied. 8.17 (d) If a law requires a record to be presented or retained 8.18 in its original form, or provides consequences if the record is 8.19 not presented or retained in its original form, that law is 8.20 satisfied by an electronic record retained in accordance with 8.21 paragraph (a). 8.22 (e) If a law requires retention of a check, that 8.23 requirement is satisfied by retention of an electronic record of 8.24 the information on the front and back of the check in accordance 8.25 with paragraph (a). 8.26 (f) A record retained as an electronic record in accordance 8.27 with paragraph (a) satisfies a law requiring a person to retain 8.28 a record for evidentiary, audit, or like purposes, unless a law 8.29 enacted after the effective date of this act specifically 8.30 prohibits the use of an electronic record for the specified 8.31 purpose. 8.32 (g) This section does not preclude a governmental agency of 8.33 this state from specifying additional requirements for the 8.34 retention of a record subject to the agency's jurisdiction. 8.35 Records of a government agency are subject to sections 15.17 and 8.36 138.17. 9.1 Sec. 13. [325L.13] [ADMISSIBILITY IN EVIDENCE.] 9.2 In a proceeding, evidence of a record or signature may not 9.3 be excluded solely because it is in electronic form. 9.4 Sec. 14. [325L.14] [AUTOMATED TRANSACTIONS.] 9.5 In an automated transaction, the following rules apply: 9.6 (1) a contract may be formed by the interaction of 9.7 electronic agents of the parties, even if no individual was 9.8 aware of or reviewed the electronic agents' actions or the 9.9 resulting terms and agreements; 9.10 (2) a contract may be formed by the interaction of an 9.11 electronic agent and an individual, acting on the individual's 9.12 own behalf or for another person, including by an interaction in 9.13 which the individual performs actions that the individual is 9.14 free to refuse to perform and which the individual knows or has 9.15 reason to know will cause the electronic agent to complete the 9.16 transaction or performance; 9.17 (3) the terms of the contract are determined by the 9.18 substantive law applicable to it. 9.19 Sec. 15. [325L.15] [TIME AND PLACE OF SENDING AND 9.20 RECEIPT.] 9.21 (a) Unless otherwise agreed between the sender and the 9.22 recipient, an electronic record is sent when it: 9.23 (1) is addressed properly or otherwise directed properly to 9.24 an information processing system that the recipient has 9.25 designated or uses for the purpose of receiving electronic 9.26 records or information of the type sent and from which the 9.27 recipient is able to retrieve the electronic record; 9.28 (2) is in a form capable of being processed by that system; 9.29 and 9.30 (3) enters an information processing system outside the 9.31 control of the sender or of a person that sent the electronic 9.32 record on behalf of the sender or enters a region of the 9.33 information processing system designated or used by the 9.34 recipient which is under the control of the recipient. 9.35 (b) Unless otherwise agreed between a sender and the 9.36 recipient, an electronic record is received when: 10.1 (1) it enters an information processing system that the 10.2 recipient has designated or uses for the purpose of receiving 10.3 electronic records or information of the type sent and from 10.4 which the recipient is able to retrieve the electronic record; 10.5 and 10.6 (2) it is in a form capable of being processed by that 10.7 system. 10.8 (c) Paragraph (b) applies even if the place the information 10.9 processing system is located is different from the place the 10.10 electronic record is deemed to be received under paragraph (d). 10.11 (d) Unless otherwise expressly provided in the electronic 10.12 record or agreed between the sender and the recipient, an 10.13 electronic record is deemed to be sent from the sender's place 10.14 of business and to be received at the recipient's place of 10.15 business. For purposes of this paragraph, the following rules 10.16 apply: 10.17 (1) if the sender or recipient has more than one place of 10.18 business, the place of business of that person is the place 10.19 having the closest relationship to the underlying transaction; 10.20 (2) if the sender or the recipient does not have a place of 10.21 business, the place of business is the sender's or recipient's 10.22 residence, as the case may be. 10.23 (e) An electronic record is received under paragraph (b) 10.24 even if no individual is aware of its receipt. 10.25 (f) Receipt of an electronic acknowledgment from an 10.26 information processing system described in paragraph (b) 10.27 establishes that a record was received but, by itself, does not 10.28 establish that the content sent corresponds to the content 10.29 received. 10.30 (g) If a person is aware that an electronic record 10.31 purportedly sent under paragraph (a), or purportedly received 10.32 under paragraph (b), was not actually sent or received, the 10.33 legal effect of the sending or receipt is determined by other 10.34 applicable law. Except to the extent permitted by the other 10.35 law, this paragraph may not be varied by agreement. 10.36 Sec. 16. [325L.16] [TRANSFERABLE RECORD.] 11.1 (a) In this section, "transferable record" means an 11.2 electronic record that: 11.3 (1) would be a note under Article 3 of the Uniform 11.4 Commercial Code or a document under Article 7 of the Uniform 11.5 Commercial Code if the electronic record were in writing; and 11.6 (2) the issuer of the electronic record expressly has 11.7 agreed is a transferable record. 11.8 (b) A person has control of a transferable record if a 11.9 system employed for evidencing the transfer of interests in the 11.10 transferable record reliably establishes that person as the 11.11 person to which the transferable record was issued or 11.12 transferred. 11.13 (c) A system satisfies paragraph (b), and a person is 11.14 deemed to have control of a transferable record, if the 11.15 transferable record is created, stored, and assigned in such a 11.16 manner that: 11.17 (1) a single authoritative copy of the transferable record 11.18 exists which is unique, identifiable, and, except as otherwise 11.19 provided in clauses (4), (5), and (6), unalterable; 11.20 (2) the authoritative copy identifies the person asserting 11.21 control as: 11.22 (i) the person to which the transferable record was issued; 11.23 or 11.24 (ii) if the authoritative copy indicates that the 11.25 transferable record has been transferred, the person to which 11.26 the transferable record was most recently transferred; 11.27 (3) the authoritative copy is communicated to and 11.28 maintained by the person asserting control or its designated 11.29 custodian; 11.30 (4) copies or revisions that add or change an identified 11.31 assignee of the authoritative copy can be made only with the 11.32 consent of the person asserting control; 11.33 (5) each copy of the authoritative copy and any copy of a 11.34 copy is readily identifiable as a copy that is not the 11.35 authoritative copy; and 11.36 (6) any revision of the authoritative copy is readily 12.1 identifiable as authorized or unauthorized. 12.2 (d) Except as otherwise agreed, a person having control of 12.3 a transferable record is the holder, as defined in section 12.4 336.1-201(20) of the Uniform Commercial Code, of the 12.5 transferable record and has the same rights and defenses as a 12.6 holder of an equivalent record or writing under the Uniform 12.7 Commercial Code, including, if the applicable statutory 12.8 requirements under section 336.3-302(a), 336.7-501, or 336.9-308 12.9 of the Uniform Commercial Code are satisfied, the rights and 12.10 defenses of a holder in due course, a holder to which a 12.11 negotiable document of title has been duly negotiated, or a 12.12 purchaser, respectively. Delivery, possession, and endorsement 12.13 are not required to obtain or exercise any of the rights under 12.14 this paragraph. 12.15 (e) Except as otherwise agreed, an obligor under a 12.16 transferable record has the same rights and defenses as an 12.17 equivalent obligor under equivalent records or writings under 12.18 the Uniform Commercial Code. 12.19 (f) If requested by a person against which enforcement is 12.20 sought, the person seeking to enforce the transferable record 12.21 shall provide reasonable proof that the person is in control of 12.22 the transferable record. Proof may include access to the 12.23 authoritative copy of the transferable record and related 12.24 business records sufficient to review the terms of the 12.25 transferable record and to establish the identity of the person 12.26 having control of the transferable record. 12.27 Sec. 17. [325L.17] [CREATION AND RETENTION OF ELECTRONIC 12.28 RECORDS AND CONVERSION OF WRITTEN RECORDS BY GOVERNMENTAL 12.29 AGENCIES.] 12.30 Each governmental agency of this state shall determine 12.31 whether, and the extent to which, it will create and retain 12.32 electronic records and convert written records to electronic 12.33 records. Records of a government agency are subject to sections 12.34 15.17 and 138.17. 12.35 Sec. 18. [325L.18] [ACCEPTANCE AND DISTRIBUTION OF 12.36 ELECTRONIC RECORDS BY GOVERNMENTAL AGENCIES.] 13.1 (a) Except as otherwise provided in section 325L.12, 13.2 paragraphs (f) and (g), each governmental agency of this state 13.3 shall determine whether, and the extent to which, it will send 13.4 and accept electronic records and electronic signatures to and 13.5 from other persons and otherwise create, generate, communicate, 13.6 store, process, use, and rely upon electronic records and 13.7 electronic signatures. 13.8 (b) To the extent that a governmental agency uses 13.9 electronic records and electronic signatures under paragraph 13.10 (a), the governmental agency giving due consideration to 13.11 security, may specify: 13.12 (1) the manner and format in which the electronic records 13.13 must be created, generated, sent, communicated, received, and 13.14 stored and the systems established for those purposes; 13.15 (2) if electronic records must be signed by electronic 13.16 means, the type of electronic signature required, the manner and 13.17 format in which the electronic signature must be affixed to the 13.18 electronic record, and the identity of, or criteria that must be 13.19 met by, any third party used by a person filing a document to 13.20 facilitate the process; 13.21 (3) control processes and procedures as appropriate to 13.22 ensure adequate preservation, disposition, integrity, security, 13.23 confidentiality, and auditability of electronic records; and 13.24 (4) any other required attributes for electronic records 13.25 which are specified for corresponding nonelectronic records or 13.26 reasonably necessary under the circumstances. 13.27 (c) Except as otherwise provided in section 325L.12, 13.28 paragraph (f), this chapter does not require a governmental 13.29 agency of this state to use or permit the use of electronic 13.30 records or electronic signatures. 13.31 Sec. 19. [325L.19] [INTEROPERABILITY.] 13.32 The governmental agency of this state which adopts 13.33 standards pursuant to section 325L.18 may encourage and promote 13.34 consistency and interoperability with similar requirements 13.35 adopted by other governmental agencies of this and other states 13.36 and the federal government and nongovernmental persons 14.1 interacting with governmental agencies of this state. If 14.2 appropriate, those standards may specify differing levels of 14.3 standards from which governmental agencies of this state may 14.4 choose in implementing the most appropriate standard for a 14.5 particular application.