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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 371-H.F.No. 3109 
                  An act relating to commerce; enacting the Uniform 
                  Electronic Transactions Act adopted by the National 
                  Conference of Commissioners on Uniform State Laws; 
                  proposing coding for new law as Minnesota Statutes, 
                  chapter 325L. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [325L.01] [SHORT TITLE.] 
           This chapter may be cited as the "Uniform Electronic 
        Transactions Act." 
           Sec. 2.  [325L.02] [DEFINITIONS.] 
           In this chapter: 
           (a) "Agreement" means the bargain of the parties in fact, 
        as found in their language or inferred from other circumstances 
        and from rules, regulations, and procedures given the effect of 
        agreements under laws otherwise applicable to a particular 
        transaction. 
           (b) "Automated transaction" means a transaction conducted 
        or performed, in whole or in part, by electronic means or 
        electronic records, in which the acts or records of one or both 
        parties are not reviewed by an individual in the ordinary course 
        in forming a contract, performing under an existing contract, or 
        fulfilling an obligation required by the transaction. 
           (c) "Computer program" means a set of statements or 
        instructions to be used directly or indirectly in an information 
        processing system in order to bring about a certain result. 
           (d) "Contract" means the total legal obligation resulting 
        from the parties' agreement as affected by this chapter and 
        other applicable law. 
           (e) "Electronic" means relating to technology having 
        electrical, digital, magnetic, wireless, optical, 
        electromagnetic, or similar capabilities. 
           (f) "Electronic agent" means a computer program or an 
        electronic or other automated means used independently to 
        initiate an action or respond to electronic records or 
        performances, in whole or in part, without review or action by 
        an individual. 
           (g) "Electronic record" means a record created, generated, 
        sent, communicated, received, or stored by electronic means. 
           (h) "Electronic signature" means an electronic sound, 
        symbol, or process attached to or logically associated with a 
        record and executed or adopted by a person with the intent to 
        sign the record. 
           (i) "Governmental agency" means an executive, legislative, 
        or judicial agency, department, board, commission, authority, 
        institution, or instrumentality of the federal government or of 
        a state or of a county, municipality, or other political 
        subdivision of a state. 
           (j) "Information" means data, text, images, sounds, codes, 
        computer programs, software, databases, or the like. 
           (k) "Information processing system" means an electronic 
        system for creating, generating, sending, receiving, storing, 
        displaying, or processing information. 
           (l) "Person" means an individual, corporation, business 
        trust, estate, trust, partnership, limited liability company, 
        association, joint venture, governmental agency, public 
        corporation, or any other legal or commercial entity. 
           (m) "Record" means information that is inscribed on a 
        tangible medium or that is stored in an electronic or other 
        medium and is retrievable in perceivable form. 
           (n) "Security procedure" means a procedure employed for the 
        purpose of verifying that an electronic signature, record, or 
        performance is that of a specific person or for detecting 
        changes or errors in the information in an electronic record.  
        The term includes a procedure that requires the use of 
        algorithms or other codes, identifying words or numbers, 
        encryption, or callback or other acknowledgment procedures. 
           (o) "State" means a state of the United States, the 
        District of Columbia, Puerto Rico, the United States Virgin 
        Islands, or any territory or insular possession subject to the 
        jurisdiction of the United States.  The term includes an Indian 
        tribe or band, or Alaskan native village, which is recognized by 
        federal law or formally acknowledged by a state. 
           (p) "Transaction" means an action or set of actions 
        occurring between two or more persons relating to the conduct of 
        business, commercial, or governmental affairs. 
           Sec. 3.  [325L.03] [SCOPE.] 
           (a) Except as otherwise provided in paragraphs (b) and (e), 
        this chapter applies to electronic records and electronic 
        signatures relating to a transaction. 
           (b) This chapter does not apply to a transaction to the 
        extent it is governed by: 
           (1) The Uniform Commercial Code other than sections 
        336.1-107 and 336.1-206, Article 2, and Article 2A; and 
           (2) section 145C.03, subdivision 1, relating to 
        requirements for creation of a health care directive; section 
        507.24, relating to requirements for recording any conveyance, 
        power of attorney, or other instrument affecting real estate; 
        section 523.23, subdivision 3, relating to requirements for 
        creation of a statutory short form power of attorney; and 
        section 253B.03, subdivision 6b, relating to requirements for 
        creation of a declaration of preferences or instructions 
        regarding intrusive mental health treatment. 
           (c) This chapter applies to an electronic record or 
        electronic signature otherwise excluded from the application of 
        this chapter under paragraph (b) to the extent it is governed by 
        a law other than those specified in paragraph (b). 
           (d) A transaction subject to this chapter is also subject 
        to other applicable substantive law. 
           (e) This chapter does not apply to the creation and 
        execution of wills, codicils, or trusts other than trusts 
        relating to the conduct of business, commercial, or governmental 
        purposes. 
           Sec. 4.  [325L.04] [PROSPECTIVE APPLICATION.] 
           This chapter applies to any electronic record or electronic 
        signature created, generated, sent, communicated, received, or 
        stored on or after the effective date of this chapter. 
           Sec. 5.  [325L.05] [USE OF ELECTRONIC RECORDS AND 
        ELECTRONIC SIGNATURES; VARIATION BY AGREEMENT.] 
           (a) This chapter does not require a record or signature to 
        be created, generated, sent, communicated, received, stored, or 
        otherwise processed or used by electronic means or in electronic 
        form. 
           (b) This chapter applies only to transactions between 
        parties, each of which has agreed to conduct transactions by 
        electronic means.  Whether the parties agree to conduct 
        transactions by electronic means is determined from the context 
        and surrounding circumstances, including the parties' conduct.  
           (c) If a party agrees to conduct a transaction by 
        electronic means, this chapter does not prohibit the party from 
        refusing to conduct other transactions by electronic means.  
        This paragraph may not be varied by agreement. 
           (d) Except as otherwise provided in this chapter, the 
        effect of any of its provisions may be varied by agreement.  The 
        presence in certain provisions of this chapter of the words 
        "unless otherwise agreed," or words of similar import, does not 
        imply that the effect of other provisions may not be varied by 
        agreement. 
           (e) Whether an electronic record or electronic signature 
        has legal consequences is determined by this chapter and other 
        applicable law. 
           Sec. 6.  [325L.06] [CONSTRUCTION AND APPLICATION.] 
           This chapter must be construed and applied to: 
           (1) facilitate electronic transactions consistent with 
        other applicable law; 
           (2) be consistent with reasonable practices concerning 
        electronic transactions and with the continued expansion of 
        those practices; and 
           (3) effectuate its general purpose to make uniform the law 
        with respect to the subject of this chapter among states 
        enacting it. 
           Sec. 7.  [325L.07] [LEGAL RECOGNITION OF ELECTRONIC 
        RECORDS, ELECTRONIC SIGNATURES, AND ELECTRONIC CONTRACTS.] 
           (a) A record or signature may not be denied legal effect or 
        enforceability solely because it is in electronic form. 
           (b) A contract may not be denied legal effect or 
        enforceability solely because an electronic record was used in 
        its formation. 
           (c) If a law requires a record to be in writing, an 
        electronic record satisfies the law. 
           (d) If a law requires a signature, an electronic signature 
        satisfies the law. 
           Sec. 8.  [325L.08] [PROVISION OF INFORMATION IN WRITING; 
        PRESENTATION OF RECORDS.] 
           (a) If parties have agreed to conduct transactions by 
        electronic means and a law requires a person to provide, send, 
        or deliver information in writing to another person, the 
        requirement is satisfied if the information is provided, sent, 
        or delivered, as the case may be, in an electronic record 
        capable of retention by the recipient at the time of receipt.  
        An electronic record is not capable of retention by the 
        recipient if the sender or its information processing system 
        inhibits the ability of the recipient to print or store the 
        electronic record. 
           (b) If a law other than this chapter requires a record (i) 
        to be posted or displayed in a certain manner, (ii) to be sent, 
        communicated, or transmitted by a specified method, or (iii) to 
        contain information that is formatted in a certain manner, the 
        following rules apply: 
           (1) the record must be posted or displayed in the manner 
        specified in the other law; 
           (2) except as otherwise provided in paragraph (d), clause 
        (2), the record must be sent, communicated, or transmitted by 
        the method specified in the other law; 
           (3) the record must contain the information formatted in 
        the manner specified in the other law. 
           (c) If a sender inhibits the ability of a recipient to 
        store or print an electronic record, the electronic record is 
        not enforceable against the recipient. 
           (d) The requirements of this section may not be varied by 
        agreement, but: 
           (1) to the extent a law other than this chapter requires 
        information to be provided, sent, or delivered in writing but 
        permits that requirement to be varied by agreement, the 
        requirement under paragraph (a) that the information be in the 
        form of an electronic record capable of retention may also be 
        varied by agreement; and 
           (2) a requirement under a law other than this chapter to 
        send, communicate, or transmit a record by first-class mail, 
        postage prepaid or regular United States mail may be varied by 
        agreement to the extent permitted by the other law. 
           Sec. 9.  [325L.09] [ATTRIBUTION AND EFFECT OF ELECTRONIC 
        RECORD AND ELECTRONIC SIGNATURE.] 
           (a) An electronic record or electronic signature is 
        attributable to a person if it was the act of the person.  The 
        act of the person may be shown in any manner, including a 
        showing of the efficacy of any security procedure applied to 
        determine the person to which the electronic record or 
        electronic signature was attributable. 
           (b) The effect of an electronic record or electronic 
        signature attributed to a person under paragraph (a) is 
        determined from the context and surrounding circumstances at the 
        time of its creation, execution, or adoption, including the 
        parties' agreement, if any, and as otherwise provided by law. 
           Sec. 10.  [325L.10] [EFFECT OF CHANGE OR ERROR.] 
           If a change or error in an electronic record occurs in a 
        transmission between parties to a transaction, the following 
        rules apply: 
           (1) if the parties have agreed to use a security procedure 
        to detect changes or errors and one party has conformed to the 
        procedure, but the other party has not, and the nonconforming 
        party would have detected the change or error had that party 
        also conformed, the conforming party may avoid the effect of the 
        changed or erroneous electronic record; 
           (2) in an automated transaction involving an individual, 
        the individual may avoid the effect of an electronic record that 
        resulted from an error made by the individual in dealing with 
        the electronic agent of another person if the electronic agent 
        did not provide an opportunity for the prevention or correction 
        of the error and, at the time the individual learns of the 
        error, the individual: 
           (i) promptly notifies the other person of the error and 
        that the individual did not intend to be bound by the electronic 
        record received by the other person; 
           (ii) takes reasonable steps, including steps that conform 
        to the other person's reasonable instructions, to return to the 
        other person or, if instructed by the other person, to destroy 
        the consideration received, if any, as a result of the erroneous 
        electronic record; and 
           (iii) has not used or received any benefit or value from 
        the consideration, if any, received from the other person; 
           (3) if neither clause (1) nor clause (2) applies, the 
        change or error has the effect provided by other law, including 
        the law of mistake, and the parties' contract, if any; 
           (4) clauses (2) and (3) may not be varied by agreement. 
           Sec. 11.  [325L.11] [NOTARIZATION AND ACKNOWLEDGMENT.] 
           If a law requires a signature or record to be notarized, 
        acknowledged, verified, or made under oath, the requirement is 
        satisfied if the electronic signature of the person authorized 
        to perform those acts, together with all other information 
        required to be included by other applicable law, is attached to 
        or logically associated with the signature or record. 
           Sec. 12.  [325L.12] [RETENTION OF ELECTRONIC RECORDS; 
        ORIGINALS.] 
           (a) If a law requires that a record be retained, the 
        requirement is satisfied by retaining an electronic record of 
        the information in the record which: 
           (1) accurately reflects the information set forth in the 
        record after it was first generated in its final form as an 
        electronic record or otherwise; and 
           (2) remains accessible for later reference. 
           (b) A requirement to retain a record in accordance with 
        paragraph (a) does not apply to any information whose sole 
        purpose is to enable the record to be sent, communicated, or 
        received. 
           (c) A person may satisfy paragraph (a) by using the 
        services of another person if the requirements of that paragraph 
        are satisfied. 
           (d) If a law requires a record to be presented or retained 
        in its original form, or provides consequences if the record is 
        not presented or retained in its original form, that law is 
        satisfied by an electronic record retained in accordance with 
        paragraph (a). 
           (e) If a law requires retention of a check, that 
        requirement is satisfied by retention of an electronic record of 
        the information on the front and back of the check in accordance 
        with paragraph (a). 
           (f) A record retained as an electronic record in accordance 
        with paragraph (a) satisfies a law requiring a person to retain 
        a record for evidentiary, audit, or like purposes, unless a law 
        enacted after the effective date of this act specifically 
        prohibits the use of an electronic record for the specified 
        purpose. 
           (g) This section does not preclude a governmental agency of 
        this state from specifying additional requirements for the 
        retention of a record subject to the agency's jurisdiction.  
        Records of a government agency are subject to sections 15.17 and 
        138.17.  
           Sec. 13.  [325L.13] [ADMISSIBILITY IN EVIDENCE.] 
           In a proceeding, evidence of a record or signature may not 
        be excluded solely because it is in electronic form. 
           Sec. 14.  [325L.14] [AUTOMATED TRANSACTIONS.] 
           In an automated transaction, the following rules apply: 
           (1) a contract may be formed by the interaction of 
        electronic agents of the parties, even if no individual was 
        aware of or reviewed the electronic agents' actions or the 
        resulting terms and agreements; 
           (2) a contract may be formed by the interaction of an 
        electronic agent and an individual, acting on the individual's 
        own behalf or for another person, including by an interaction in 
        which the individual performs actions that the individual is 
        free to refuse to perform and which the individual knows or has 
        reason to know will cause the electronic agent to complete the 
        transaction or performance; 
           (3) the terms of the contract are determined by the 
        substantive law applicable to it. 
           Sec. 15.  [325L.15] [TIME AND PLACE OF SENDING AND 
        RECEIPT.] 
           (a) Unless otherwise agreed between the sender and the 
        recipient, an electronic record is sent when it: 
           (1) is addressed properly or otherwise directed properly to 
        an information processing system that the recipient has 
        designated or uses for the purpose of receiving electronic 
        records or information of the type sent and from which the 
        recipient is able to retrieve the electronic record; 
           (2) is in a form capable of being processed by that system; 
        and 
           (3) enters an information processing system outside the 
        control of the sender or of a person that sent the electronic 
        record on behalf of the sender or enters a region of the 
        information processing system designated or used by the 
        recipient which is under the control of the recipient. 
           (b) Unless otherwise agreed between a sender and the 
        recipient, an electronic record is received when: 
           (1) it enters an information processing system that the 
        recipient has designated or uses for the purpose of receiving 
        electronic records or information of the type sent and from 
        which the recipient is able to retrieve the electronic record; 
        and 
           (2) it is in a form capable of being processed by that 
        system. 
           (c) Paragraph (b) applies even if the place the information 
        processing system is located is different from the place the 
        electronic record is deemed to be received under paragraph (d). 
           (d) Unless otherwise expressly provided in the electronic 
        record or agreed between the sender and the recipient, an 
        electronic record is deemed to be sent from the sender's place 
        of business and to be received at the recipient's place of 
        business.  For purposes of this paragraph, the following rules 
        apply: 
           (1) if the sender or recipient has more than one place of 
        business, the place of business of that person is the place 
        having the closest relationship to the underlying transaction; 
           (2) if the sender or the recipient does not have a place of 
        business, the place of business is the sender's or recipient's 
        residence, as the case may be. 
           (e) An electronic record is received under paragraph (b) 
        even if no individual is aware of its receipt. 
           (f) Receipt of an electronic acknowledgment from an 
        information processing system described in paragraph (b) 
        establishes that a record was received but, by itself, does not 
        establish that the content sent corresponds to the content 
        received. 
           (g) If a person is aware that an electronic record 
        purportedly sent under paragraph (a), or purportedly received 
        under paragraph (b), was not actually sent or received, the 
        legal effect of the sending or receipt is determined by other 
        applicable law.  Except to the extent permitted by the other 
        law, this paragraph may not be varied by agreement. 
           Sec. 16.  [325L.16] [TRANSFERABLE RECORD.] 
           (a) In this section, "transferable record" means an 
        electronic record that: 
           (1) would be a note under Article 3 of the Uniform 
        Commercial Code or a document under Article 7 of the Uniform 
        Commercial Code if the electronic record were in writing; and 
           (2) the issuer of the electronic record expressly has 
        agreed is a transferable record. 
           (b) A person has control of a transferable record if a 
        system employed for evidencing the transfer of interests in the 
        transferable record reliably establishes that person as the 
        person to which the transferable record was issued or 
        transferred. 
           (c) A system satisfies paragraph (b), and a person is 
        deemed to have control of a transferable record, if the 
        transferable record is created, stored, and assigned in such a 
        manner that: 
           (1) a single authoritative copy of the transferable record 
        exists which is unique, identifiable, and, except as otherwise 
        provided in clauses (4), (5), and (6), unalterable; 
           (2) the authoritative copy identifies the person asserting 
        control as: 
           (i) the person to which the transferable record was issued; 
        or 
           (ii) if the authoritative copy indicates that the 
        transferable record has been transferred, the person to which 
        the transferable record was most recently transferred; 
           (3) the authoritative copy is communicated to and 
        maintained by the person asserting control or its designated 
        custodian; 
           (4) copies or revisions that add or change an identified 
        assignee of the authoritative copy can be made only with the 
        consent of the person asserting control; 
           (5) each copy of the authoritative copy and any copy of a 
        copy is readily identifiable as a copy that is not the 
        authoritative copy; and 
           (6) any revision of the authoritative copy is readily 
        identifiable as authorized or unauthorized. 
           (d) Except as otherwise agreed, a person having control of 
        a transferable record is the holder, as defined in section 
        336.1-201(20) of the Uniform Commercial Code, of the 
        transferable record and has the same rights and defenses as a 
        holder of an equivalent record or writing under the Uniform 
        Commercial Code, including, if the applicable statutory 
        requirements under section 336.3-302(a), 336.7-501, or 336.9-308 
        of the Uniform Commercial Code are satisfied, the rights and 
        defenses of a holder in due course, a holder to which a 
        negotiable document of title has been duly negotiated, or a 
        purchaser, respectively.  Delivery, possession, and endorsement 
        are not required to obtain or exercise any of the rights under 
        this paragraph. 
           (e) Except as otherwise agreed, an obligor under a 
        transferable record has the same rights and defenses as an 
        equivalent obligor under equivalent records or writings under 
        the Uniform Commercial Code. 
           (f) If requested by a person against which enforcement is 
        sought, the person seeking to enforce the transferable record 
        shall provide reasonable proof that the person is in control of 
        the transferable record.  Proof may include access to the 
        authoritative copy of the transferable record and related 
        business records sufficient to review the terms of the 
        transferable record and to establish the identity of the person 
        having control of the transferable record. 
           Sec. 17.  [325L.17] [CREATION AND RETENTION OF ELECTRONIC 
        RECORDS AND CONVERSION OF WRITTEN RECORDS BY GOVERNMENTAL 
        AGENCIES.] 
           Each governmental agency of this state shall determine 
        whether, and the extent to which, it will create and retain 
        electronic records and convert written records to electronic 
        records.  Records of a government agency are subject to sections 
        15.17 and 138.17.  
           Sec. 18.  [325L.18] [ACCEPTANCE AND DISTRIBUTION OF 
        ELECTRONIC RECORDS BY GOVERNMENTAL AGENCIES.] 
           (a) Except as otherwise provided in section 325L.12, 
        paragraphs (f) and (g), each governmental agency of this state 
        shall determine whether, and the extent to which, it will send 
        and accept electronic records and electronic signatures to and 
        from other persons and otherwise create, generate, communicate, 
        store, process, use, and rely upon electronic records and 
        electronic signatures. 
           (b) To the extent that a governmental agency uses 
        electronic records and electronic signatures under paragraph 
        (a), the governmental agency giving due consideration to 
        security, may specify: 
           (1) the manner and format in which the electronic records 
        must be created, generated, sent, communicated, received, and 
        stored and the systems established for those purposes; 
           (2) if electronic records must be signed by electronic 
        means, the type of electronic signature required, the manner and 
        format in which the electronic signature must be affixed to the 
        electronic record, and the identity of, or criteria that must be 
        met by, any third party used by a person filing a document to 
        facilitate the process; 
           (3) control processes and procedures as appropriate to 
        ensure adequate preservation, disposition, integrity, security, 
        confidentiality, and auditability of electronic records; and 
           (4) any other required attributes for electronic records 
        which are specified for corresponding nonelectronic records or 
        reasonably necessary under the circumstances. 
           (c) Except as otherwise provided in section 325L.12, 
        paragraph (f), this chapter does not require a governmental 
        agency of this state to use or permit the use of electronic 
        records or electronic signatures. 
           Sec. 19.  [325L.19] [INTEROPERABILITY.] 
           The governmental agency of this state which adopts 
        standards pursuant to section 325L.18 may encourage and promote 
        consistency and interoperability with similar requirements 
        adopted by other governmental agencies of this and other states 
        and the federal government and nongovernmental persons 
        interacting with governmental agencies of this state.  If 
        appropriate, those standards may specify differing levels of 
        standards from which governmental agencies of this state may 
        choose in implementing the most appropriate standard for a 
        particular application. 
           Presented to the governor April 10, 2000 
           Signed by the governor April 13, 2000, 4:52 p.m.