by Brandon S. Williams

November 8, 2004

The Electronic Transactions Act has been passed in Pennsylvania and many other states throughout the union, including Maryland, Ohio, New York and New Jersey. Generally, these acts allow legally binding transactions to be conducted entirely through electronic means. They also provide legal recognition for electronic records and signatures.

Now binding contracts can be entered through email or over the internet. However, a previous agreement between the parties, stating their intent to be bound by electronic agreements, is necessary. Additionally, if a law requires a record or signature to be in writing, under the Electronic Transactions Act, an electronic record or signature satisfies the legal requirement. Signatures may also be notarized electronically.

The Act elaborates upon concerns such as when offers and acceptances are considered to have been sent and received and how a record or signature is attributed to a specific individual. Understanding and compliance in these areas helps ensure that parties enjoy the same confidence in their ability to offer, accept or reject contracts as they had in the pre-digital age.

The Electronic Transactions Act in Pennsylvania also gives Commonwealth agencies the ability to decide the extent to which they will create, send and accept electronic records. Giving rise to the possibility that, some day, all transactions with the Commonwealth may be done electronically.

Although broad application of the Act is anticipated, certain transactions have been excluded from its coverage. Wills, codicils and testamentary trusts, as well as some transactions governed by the Uniform Commercial Code are currently excluded from coverage by the Electronic Transactions Act and must continue to be conducted as before.