15 U.S.C. § 7001 — General rule of validity

Page 2304 TITLE 15—COMMERCE AND TRADE § 7001 CHAPTER 96—ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE SUBCHAPTER I—ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE Sec. 7001. General rule of validity. 7002. Exemption to preemption. 7003. Specific exceptions. 7004. Applicability to Federal and State govern- ments. 7005. Studies. 7006. Definitions. SUBCHAPTER II—TRANSFERABLE RECORDS 7021. Transferable records. SUBCHAPTER III—PROMOTION OF INTERNATIONAL ELECTRONIC COMMERCE 7031. Principles governing the use of electronic sig- natures in international transactions. SUBCHAPTER I—ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE § 7001. General rule of validity (a) In general Notwithstanding any statute, regulation, or other rule of law (other than this subchapter and subchapter II), with respect to any trans- action in or affecting interstate or foreign com- merce— (1) a signature, contract, or other record re- lating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or en- forceability solely because an electronic sig- nature or electronic record was used in its for- mation. (b) Preservation of rights and obligations This subchapter does not— (1) limit, alter, or otherwise affect any re- quirement imposed by a statute, regulation, or rule of law relating to the rights and obliga- tions of persons under such statute, regula- tion, or rule of law other than a requirement that contracts or other records be written, signed, or in nonelectronic form; or (2) require any person to agree to use or ac- cept electronic records or electronic signa- tures, other than a governmental agency with respect to a record other than a contract to which it is a party. (c) Consumer disclosures (1) Consent to electronic records Notwithstanding subsection (a), if a statute, regulation, or other rule of law requires that information relating to a transaction or trans- actions in or affecting interstate or foreign commerce be provided or made available to a consumer in writing, the use of an electronic record to provide or make available (which- ever is required) such information satisfies the requirement that such information be in writ- ing if— (A) the consumer has affirmatively con- sented to such use and has not withdrawn such consent; (B) the consumer, prior to consenting, is provided with a clear and conspicuous state- ment— (i) informing the consumer of (I) any right or option of the consumer to have the record provided or made available on paper or in nonelectronic form, and (II) the right of the consumer to withdraw the con- sent to have the record provided or made available in an electronic form and of any conditions, consequences (which may in- clude termination of the parties’ relation- ship), or fees in the event of such with- drawal; (ii) informing the consumer of whether the consent applies (I) only to the par- ticular transaction which gave rise to the obligation to provide the record, or (II) to identified categories of records that may be provided or made available during the course of the parties’ relationship; (iii) describing the procedures the con- sumer must use to withdraw consent as provided in clause (i) and to update infor- mation needed to contact the consumer electronically; and (iv) informing the consumer (I) how, after the consent, the consumer may, upon request, obtain a paper copy of an elec- tronic record, and (II) whether any fee will be charged for such copy; (C) the consumer— (i) prior to consenting, is provided with a statement of the hardware and software requirements for access to and retention of the electronic records; and (ii) consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent; and (D) after the consent of a consumer in ac- cordance with subparagraph (A), if a change in the hardware or software requirements needed to access or retain electronic records creates a material risk that the consumer will not be able to access or retain a subse- quent electronic record that was the subject of the consent, the person providing the electronic record— (i) provides the consumer with a state- ment of (I) the revised hardware and soft- ware requirements for access to and reten- tion of the electronic records, and (II) the right to withdraw consent without the im- position of any fees for such withdrawal and without the imposition of any condi- tion or consequence that was not disclosed under subparagraph (B)(i); and (ii) again complies with subparagraph (C). (2) Other rights (A) Preservation of consumer protections Nothing in this subchapter affects the con- tent or timing of any disclosure or other record required to be provided or made avail- able to any consumer under any statute, reg- ulation, or other rule of law. (B) Verification or acknowledgment If a law that was enacted prior to this chapter expressly requires a record to be Page 2305 TITLE 15—COMMERCE AND TRADE § 7001 provided or made available by a specified method that requires verification or ac- knowledgment of receipt, the record may be provided or made available electronically only if the method used provides verification or acknowledgment of receipt (whichever is required). (3) Effect of failure to obtain electronic con- sent or confirmation of consent The legal effectiveness, validity, or enforce- ability of any contract executed by a con- sumer shall not be denied solely because of the failure to obtain electronic consent or con- firmation of consent by that consumer in ac- cordance with paragraph (1)(C)(ii). (4) Prospective effect Withdrawal of consent by a consumer shall not affect the legal effectiveness, validity, or enforceability of electronic records provided or made available to that consumer in accord- ance with paragraph (1) prior to implementa- tion of the consumer’s withdrawal of consent. A consumer’s withdrawal of consent shall be effective within a reasonable period of time after receipt of the withdrawal by the provider of the record. Failure to comply with para- graph (1)(D) may, at the election of the con- sumer, be treated as a withdrawal of consent for purposes of this paragraph. (5) Prior consent This subsection does not apply to any records that are provided or made available to a consumer who has consented prior to the ef- fective date of this subchapter to receive such records in electronic form as permitted by any statute, regulation, or other rule of law. (6) Oral communications An oral communication or a recording of an oral communication shall not qualify as an electronic record for purposes of this sub- section except as otherwise provided under ap- plicable law. (d) Retention of contracts and records (1) Accuracy and accessibility If a statute, regulation, or other rule of law requires that a contract or other record relat- ing to a transaction in or affecting interstate or foreign commerce be retained, that require- ment is met by retaining an electronic record of the information in the contract or other record that— (A) accurately reflects the information set forth in the contract or other record; and (B) remains accessible to all persons who are entitled to access by statute, regulation, or rule of law, for the period required by such statute, regulation, or rule of law, in a form that is capable of being accurately re- produced for later reference, whether by transmission, printing, or otherwise. (2) Exception A requirement to retain a contract or other record in accordance with paragraph (1) does not apply to any information whose sole pur- pose is to enable the contract or other record to be sent, communicated, or received. (3) Originals If a statute, regulation, or other rule of law requires a contract or other record relating to a transaction in or affecting interstate or for- eign commerce to be provided, available, or re- tained in its original form, or provides con- sequences if the contract or other record is not provided, available, or retained in its original form, that statute, regulation, or rule of law is satisfied by an electronic record that complies with paragraph (1). (4) Checks If a statute, regulation, or other rule of law requires the retention of a check, that require- ment is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with para- graph (1). (e) Accuracy and ability to retain contracts and other records Notwithstanding subsection (a), if a statute, regulation, or other rule of law requires that a contract or other record relating to a trans- action in or affecting interstate or foreign com- merce be in writing, the legal effect, validity, or enforceability of an electronic record of such contract or other record may be denied if such electronic record is not in a form that is capable of being retained and accurately reproduced for later reference by all parties or persons who are entitled to retain the contract or other record. (f) Proximity Nothing in this subchapter affects the prox- imity required by any statute, regulation, or other rule of law with respect to any warning, notice, disclosure, or other record required to be posted, displayed, or publicly affixed. (g) Notarization and acknowledgment If a statute, regulation, or other rule of law re- quires a signature or record relating to a trans- action in or affecting interstate or foreign com- merce to be notarized, acknowledged, verified, or made under oath, that requirement is satis- fied if the electronic signature of the person au- thorized to perform those acts, together with all other information required to be included by other applicable statute, regulation, or rule of law, is attached to or logically associated with the signature or record. (h) Electronic agents A contract or other record relating to a trans- action in or affecting interstate or foreign com- merce may not be denied legal effect, validity, or enforceability solely because its formation, creation, or delivery involved the action of one or more electronic agents so long as the action of any such electronic agent is legally attrib- utable to the person to be bound. (i) Insurance It is the specific intent of the Congress that this subchapter and subchapter II apply to the business of insurance. (j) Insurance agents and brokers An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic Page 2306 TITLE 15—COMMERCE AND TRADE § 7002 signature may not be held liable for any defi- ciency in the electronic procedures agreed to by the parties under that contract if— (1) the agent or broker has not engaged in negligent, reckless, or intentional tortious conduct; (2) the agent or broker was not involved in the development or establishment of such electronic procedures; and (3) the agent or broker did not deviate from such procedures. (Pub. L. 106–229, title I, § 101, June 30, 2000, 114 Stat. 464.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (c)(2)(B), was in the original ‘‘this Act’’, meaning Pub. L. 106–229, June 30, 2000, 114 Stat. 464, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note below and Tables. For the effective date of this subchapter, referred to in subsec. (c)(5), see Effective Date note below. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 106–229, title I, § 107, June 30, 2000, 114 Stat. 473, provided that: ‘‘(a) IN GENERAL.—Except as provided in subsection (b), this title [enacting this subchapter] shall be effec- tive on October 1, 2000. ‘‘(b) EXCEPTIONS.— ‘‘(1) RECORD RETENTION.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), this title [enacting this subchapter] shall be effec- tive on March 1, 2001, with respect to a requirement that a record be retained imposed by— ‘‘(i) a Federal statute, regulation, or other rule of law, or ‘‘(ii) a State statute, regulation, or other rule of law administered or promulgated by a State regu- latory agency. ‘‘(B) DELAYED EFFECT FOR PENDING RULEMAKINGS.—If on March 1, 2001, a Federal regu- latory agency or State regulatory agency has an- nounced, proposed, or initiated, but not completed, a rulemaking proceeding to prescribe a regulation under section 104(b)(3) [15 U.S.C. 7004(b)(3)] with re- spect to a requirement described in subparagraph (A), this title shall be effective on June 1, 2001, with respect to such requirement. ‘‘(2) CERTAIN GUARANTEED AND INSURED LOANS.— With regard to any transaction involving a loan guar- antee or loan guarantee commitment (as those terms are defined in section 502 of the Federal Credit Re- form Act of 1990 [2 U.S.C. 661a]), or involving a pro- gram listed in the Federal Credit Supplement, Budget of the United States, FY 2001, this title applies only to such transactions entered into, and to any loan or mortgage made, insured, or guaranteed by the United States Government thereunder, on and after one year after the date of enactment of this Act [June 30, 2000]. ‘‘(3) STUDENT LOANS.—With respect to any records that are provided or made available to a consumer pursuant to an application for a loan, or a loan made, pursuant to title IV of the Higher Education Act of 1965 [20 U.S.C. 1070 et seq.], section 101(c) of this Act [15 U.S.C. 7001(c)] shall not apply until the earlier of— ‘‘(A) such time as the Secretary of Education pub- lishes revised promissory notes under section 432(m) of the Higher Education Act of 1965 [20 U.S.C. 1082(m)]; or ‘‘(B) one year after the date of enactment of this Act [June 30, 2000].’’ SHORT TITLE Pub. L. 106–229, § 1, June 30, 2000, 114 Stat. 464, pro- vided that: ‘‘This Act [enacting this chapter and amending provisions set out as a note under section 231 of Title 47, Telecommunications] may be cited as the ‘Electronic Signatures in Global and National Com- merce Act’.’’ § 7002. Exemption to preemption (a) In general A State statute, regulation, or other rule of law may modify, limit, or supersede the provi- sions of section 7001 of this title with respect to State law only if such statute, regulation, or rule of law— (1) constitutes an enactment or adoption of the Uniform Electronic Transactions Act as approved and recommended for enactment in all the States by the National Conference of Commissioners on Uniform State Laws in 1999, except that any exception to the scope of such Act enacted by a State under section 3(b)(4) of such Act shall be preempted to the extent such exception is inconsistent with this subchapter or subchapter II, or would not be permitted under paragraph (2)(A)(ii) of this subsection; or (2)(A) specifies the alternative procedures or requirements for the use or acceptance (or both) of electronic records or electronic signa- tures to establish the legal effect, validity, or enforceability of contracts or other records, if— (i) such alternative procedures or require- ments are consistent with this subchapter and subchapter II; and (ii) such alternative procedures or require- ments do not require, or accord greater legal status or effect to, the implementation or application of a specific technology or tech- nical specification for performing the func- tions of creating, storing, generating, receiv- ing, communicating, or authenticating elec- tronic records or electronic signatures; and (B) if enacted or adopted after June 30, 2000, makes specific reference to this chapter. (b) Exceptions for actions by States as market participants Subsection (a)(2)(A)(ii) shall not apply to the statutes, regulations, or other rules of law gov- erning procurement by any State, or any agency or instrumentality thereof. (c) Prevention of circumvention Subsection (a) does not permit a State to cir- cumvent this subchapter or subchapter II through the imposition of nonelectronic deliv- ery methods under section 8(b)(2) of the Uniform Electronic Transactions Act. (Pub. L. 106–229, title I, § 102, June 30, 2000, 114 Stat. 467.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Oct. 1, 2000, with exceptions relating to record retention and certain loans, see section 107 of Pub. L. 106–229, set out as a note under section 7001 of this title. § 7003. Specific exceptions (a) Excepted requirements The provisions of section 7001 of this title shall not apply to a contract or other record to the extent it is governed by—