National Conference of Commissioners on Uniform State Laws

211 E. Ontario St., Suite 1300, Chicago, IL 60611
tel 312-915-0195, fax 312-915-0187

For Immediate Release

CONSUMERS AND THE NEW UNIFORM ELECTRONIC TRANSACTIONS ACT
States Need Law to Ensure Level Playing Field for E-Commerce

March 21, 2000 - The Internet has given consumers extraordinary power. It enables some 80 million people online in the U.S. to comparison shop with vendors nationwide, making vendors compete on a national scale, rather than just locally. It also permits consumers to communicate with one another about their experiences with vendors. There are services which rate Internet vendors and alert consumers to frauds; escrow services permit third parties to hold payments until purchases arrive and are inspected.

How have consumers responded to their new empowerment? With their wallets! Online retail sales have soared from zero to $20 billion. Businesses spent an additional $109 billion buying from one another last year. By 2003, in the U.S. alone, online retail sales will grow to $144 billion, and business to business e-commerce will jump to $1.3 trillion, Forrester Research estimates. These figures all lead to one conclusion: the digital economy is the engine that is driving economic growth.

The Uniform Electronic Transactions Act (UETA), approved by the National Conference of Commissioners on Uniform State Laws in 1999, was drafted to eliminate any doubt concerning the enforceability of electronic transactions, whether in the form of retail Internet trades, electronic credit transactions, electronic data interchange or e-mail usage. Recently enacted in Pennsylvania, South Dakota and Utah, and introduced this year in 21 additional state legislatures and in the District of Columbia, UETA is designed to put electronic transactions on a par with paper transactions.

UETA responds to concerns raised by some consumer groups, but not by confining consumer transactions to the paper world. It has been drafted to assure that electronic commerce enjoys the same privileges, subject to the same responsibilities, as other markets - that participants in electronic marketplaces are neither in a better nor worse position than if they confined themselves to physical markets.

Rather than creating a separate body of law, it insures that existing legal principles apply to electronic transactions just as they do to paper transactions. "UETA assures consumers the protection and safeguards which have been developed through the decades," says Patricia Brumfield Fry, chair of the UETA drafting committee.

It is important to make sure that the rules which validate electronic transactions do not burden those who are unprepared for electronic transactions. UETA applies to any transaction, whether between two merchants or between individuals, provided that the parties have agreed to conduct their transaction electronically. It does not compel anyone to enter electronic transactions, nor does it allow one participant in a transaction to compel another participant into an "electronic transaction."

Simply stated, electronic records and signatures may not be imposed on anyone, particularly those who do not have computers or access to them. In addition, UETA specifies that legal requirements to furnish information will not be satisfied unless the electronic record is capable of being retained by the recipient. Neither the sender nor its information system can inhibit the ability of the recipient to print or store the electronic record.

There are additional ways UETA assures the enforceability of online retail trade. It recognizes the existence of computer programs called "electronic agents," which are used by sellers and lenders to automate their transactions. It makes it clear that those who use such programs are bound to contracts made by those "electronic agents." UETA also provides a special remedy in the event a human makes an error in dealing with an "electronic agent."

The main consumer benefit from UETA is its contribution to the level playing field. All the substantive legal rules, including those for consumer protection, apply in the electronic marketplace as they do in the paper-bound marketplace. A sale remains a sale; a credit transaction remains a credit transaction.

"While every estimate of growth of electronic commerce has been exceeded, "says Ms. Fry, the power of the consumer in dealings with merchants has been enhanced in the electronic environment. Until it is shown that specific needs have arisen online, the electronic market should be dealt with on a par with existing markets."