The Differences between UETA and E-SIGN

Association of Business Training
January 16, 2014 — 2,717 views  

The UETA and E-SIGN are pieces of legislation that deal with electronic signatures and digital security. This has become a very important area ever since the use of computers became widespread. Both laws deal with the same area of technology, but they differ in intent and purpose.

It is very important to note and appreciate the differences between the two laws. These differences often matter in court cases and can affect the outcome of hearings. The differences are also varied from state to state which further complicates the enforcement of the two laws.

Federal vs State Law

E-SIGN is a federal law, whereas UETA is a state law. E-SIGN has been enacted by the federal government and it applies to the entire country including all the states. On the other hand, UETA is a state law and is in force in several states--but not all states enforce it.

The differences between the two laws are very small. E-SIGN is the only law in some states. And in other states, both laws apply; however E-SIGN law is given preference.

Limited Exclusion

There are certain areas in which both laws do not accept the validity of electronic signatures. These include:

  • Creation and execution of wills
  • Adoption, divorce and other areas of family law
  • Uniform commercial code
  • Court documents

Key Differences

There are several clauses that appear in E-SIGN but do not appear in UETA. These include:

  • Oral communications are not considered to be electronic records for the purpose of electronic signatures
  • It expressly limits regulatory authority
  • Transferable Records are limited
  • Default Rules are omitted

Procedural Provisions

There are several procedural provisions in UETA that are not mentioned in E-SIGN. These include:

  • Attribution of records
  • The time of sending or receiving messages
  • Mistakes in contract documents
  • Electronic Records are not admissible as documents

Other Considerations

There are several considerations that should be kept in mind while making use of the two laws. UETA is generally more comprehensive than the E-SIGN. UETA addresses several important issues that E-SIGN omits.

UETA defers to existing state laws but E-SIGN, being a federal law, can override the state laws. Therefore many states have continued to retain the use of UETA. But some states that did not have any relevant law already in place are now making use of E-SIGN.

The UETA and E-SIGN are two competing laws that apply to the same area of technology. Which one should be applied in which case can be confusing. As a practical matter, the enforcement of the laws has come down to individual states. Some states have adopted E-SIGN, while others are using UETA and some states have continued to use both laws whenever applicable.

There are several provisions that are unique to each of the two laws. Therefore some cases can utilize these unique provisions. For this reason, electronic documents specifically need to mention which jurisdiction they can be enforced in.

Association of Business Training