resolution of conflicts between e-sign and ueta – “another oar dipped into troubled waters” by...

RESOLUTION OF CONFLICTS RESOLUTION OF CONFLICTS BETWEEN E-SIGN AND UETA – BETWEEN E-SIGN AND UETA – “ANOTHER OAR DIPPED INTO “ANOTHER OAR DIPPED INTO

TROUBLED WATERS”TROUBLED WATERS”By Robert J. Kiggins, Esq. McCarthy By Robert J. Kiggins, Esq. McCarthy

Fingar LLP White Plains, NYFingar LLP White Plains, NYNAVA 2005 Compliance & Regulatory NAVA 2005 Compliance & Regulatory

Affairs ConferenceAffairs ConferenceJune, 2005June, 2005

E-Signatures and E-Records E-Signatures and E-Records Principal Dramatis Principal Dramatis

PersonaePersonae The federal law is the Electronic Signatures in The federal law is the Electronic Signatures in

Global and National Commerce Act (“E-Sign”) Global and National Commerce Act (“E-Sign”) effective October 1, 2000 effective October 1, 2000

The state law:The state law: Majority - the Uniform Electronic Transactions Act Majority - the Uniform Electronic Transactions Act

(“UETA”)(“UETA”) promulgated by the National Conference of Commissioners promulgated by the National Conference of Commissioners

on Uniform State Laws (NCCUSL) in July, 1999 andon Uniform State Laws (NCCUSL) in July, 1999 and enacted by 48 states and territories as of May, 2005 orenacted by 48 states and territories as of May, 2005 or

IL, NY, PR, WA (“Minority States”) - Non-UETA IL, NY, PR, WA (“Minority States”) - Non-UETA statutes or common law statutes or common law

e.g. NY Electronic Signatures and Records Act (“ESRA”)e.g. NY Electronic Signatures and Records Act (“ESRA”)

Scope of E-SIGN and UETAScope of E-SIGN and UETA Each provides for the equality of electronic and Each provides for the equality of electronic and

non-electronic records and signatures.non-electronic records and signatures. Contracts may be formed using electronic records and Contracts may be formed using electronic records and

signaturessignatures Statute of frauds requirements of a signed writing for the Statute of frauds requirements of a signed writing for the

enforceability of a contract are met by an electronic enforceability of a contract are met by an electronic record with an electronic signaturerecord with an electronic signature

Any other requirements for written disclosures, written Any other requirements for written disclosures, written notice, written records, or signed consent with regard to notice, written records, or signed consent with regard to a contract can be met using electronic records and a contract can be met using electronic records and electronic signatureselectronic signatures

Note: Minority States Law not providing these Note: Minority States Law not providing these “equal rights” to the e-signature and e-document “equal rights” to the e-signature and e-document segment of the “document populace” would almost segment of the “document populace” would almost surely be preempted by E-SIGNsurely be preempted by E-SIGN

The Major DifferencesThe Major DifferencesBetween E-SIGN & UETABetween E-SIGN & UETA

ApplicabilityApplicability E-Sign applies to E-Sign applies to both state and federalboth state and federal electronic record electronic record

and signature requirements (except where it defers to and signature requirements (except where it defers to state law) state law)

UETA applies to UETA applies to only stateonly state electronic record and electronic record and signature requirements.signature requirements.

Minority States Law – also apply Minority States Law – also apply only to stateonly to state electronic electronic records and signaturesrecords and signatures

ExampleExample - -VA and VL prospectus delivery requirementsVA and VL prospectus delivery requirements Basically controlled by federal securities lawsBasically controlled by federal securities laws UETA and Minority State Law not apply to federal lawUETA and Minority State Law not apply to federal law The ESIGN consumer consent to electronic delivery of VA The ESIGN consumer consent to electronic delivery of VA

and VL prospectus materials should apply in all statesand VL prospectus materials should apply in all states However, current SEC proposals would eliminate in many However, current SEC proposals would eliminate in many

cases need for physical delivery of a final prospectus if a cases need for physical delivery of a final prospectus if a statutory prospectus is filed with the SEC on EDGARstatutory prospectus is filed with the SEC on EDGAR


Consent to Conduct Transactions ElectronicallyConsent to Conduct Transactions Electronically UETA requires each party to agree to conduct transactions UETA requires each party to agree to conduct transactions

electronically – however agreement may be implied from electronically – however agreement may be implied from context and circumstances context and circumstances

E-SIGN does not directly limit its enabling provisions to E-SIGN does not directly limit its enabling provisions to situations where parties have agreed to conduct transactions situations where parties have agreed to conduct transactions electronically.electronically.

However, E-SIGN would, where applicable, defer to UETA in this However, E-SIGN would, where applicable, defer to UETA in this regard regard

In short, this is likely a distinction without a true difference.In short, this is likely a distinction without a true difference. Consent to Use of Electronic RecordsConsent to Use of Electronic Records

UETA does UETA does notnot distinguish distinguish agreement to enter intoagreement to enter into a VA or VL a VA or VL contract electronically from contract electronically from agreement to receive later agreement to receive later disclosures and notices electronicallydisclosures and notices electronically

E-Sign has E-Sign has stringent consumer consent provisionsstringent consumer consent provisions before there before there will be deemed to be an agreement by the consumer to receive will be deemed to be an agreement by the consumer to receive later disclosures electronically later disclosures electronically


Exclusions Exclusions E-SIGN excludes from scope:E-SIGN excludes from scope:

utility cut-off notices, including water, heat and power;utility cut-off notices, including water, heat and power; notices of default, acceleration, repossession, foreclosure notices of default, acceleration, repossession, foreclosure

or eviction under a credit agreement secured by or a lease or eviction under a credit agreement secured by or a lease of a primary residence; of a primary residence;

notices of cancellation or termination of health insurance notices of cancellation or termination of health insurance or benefits or life insurance benefits (but not ofor benefits or life insurance benefits (but not of annuities annuities); );

recall or notice of material defect in a product that risks recall or notice of material defect in a product that risks endangering health or safety, and endangering health or safety, and

required notices to accompany hazardous materials, required notices to accompany hazardous materials, pesticides, or other toxic or dangerous materials pesticides, or other toxic or dangerous materials

Uniform UETA Uniform UETA does notdoes not exclude the above items exclude the above items

General Principles Applicable to General Principles Applicable to Whether E-SIGN Preempts or Defers to Whether E-SIGN Preempts or Defers to

UETA and Other State LawUETA and Other State Law General Preemption/Deferral PrinciplesGeneral Preemption/Deferral Principles

Determining whether federal law preempts state law or Determining whether federal law preempts state law or defers to it is a matter of interpreting the relevant federal defers to it is a matter of interpreting the relevant federal statutestatute

Preliminarily, however, Congress needs to have the power to Preliminarily, however, Congress needs to have the power to make law of the sort in question. make law of the sort in question.

Congress has commerce clause power to regulate electronic Congress has commerce clause power to regulate electronic commerce, which clearly affects interstate commerce. commerce, which clearly affects interstate commerce.

In short, Congress had the power to legislate E-SIGNIn short, Congress had the power to legislate E-SIGN So the issue is to what extent Congress intended E-Sign to So the issue is to what extent Congress intended E-Sign to

preempt state law. preempt state law. Courts frequently make use of the categories of "express" and Courts frequently make use of the categories of "express" and

"implied" preemption when engaging in this sort of statutory "implied" preemption when engaging in this sort of statutory interpretation.interpretation.

Courts also look to whether state law is nullified to the extent Courts also look to whether state law is nullified to the extent that it conflicts with federal law, because compliance with both that it conflicts with federal law, because compliance with both state and federal law or regulations is a physical impossibility, or state and federal law or regulations is a physical impossibility, or because compliance with state law stands in the way of because compliance with state law stands in the way of accomplishment of a federal objective. accomplishment of a federal objective.

E-SIGN E-SIGN Preemption/Deferral Preemption/Deferral

Section 7002 TextSection 7002 Text E-SIGN § 7002. Exemption to preemption E-SIGN § 7002. Exemption to preemption (a) In general. A State statute, regulation, or other rule of law may modify, limit, or supersede the (a) In general. A State statute, regulation, or other rule of law may modify, limit, or supersede the

provisions of section 101 [15 USCS § 7001] with respect to State law only if such statute, regulation, provisions of section 101 [15 USCS § 7001] with respect to State law only if such statute, regulation, or rule of law--or rule of law--

(1) constitutes an enactment or adoption of the Uniform Electronic Transactions Act as approved (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 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 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 under section 3(b)(4) of such Act shall be preempted to the extent such exception is inconsistent with this title or title II [15 USCS §§ 7001 et seq. or 15 USCS § 7021], or would not be permitted under this title or title II [15 USCS §§ 7001 et seq. or 15 USCS § 7021], or would not be permitted under paragraph (2)(A)(ii) of this subsection; orparagraph (2)(A)(ii) of this subsection; or

(2) (A) specifies the alternative procedures or requirements for the use or acceptance (or both) of (2) (A) specifies the alternative procedures or requirements for the use or acceptance (or both) of electronic records or electronic signatures to establish the legal effect, validity, or enforceability of electronic records or electronic signatures to establish the legal effect, validity, or enforceability of contracts or other records, if--contracts or other records, if--

(i) such alternative procedures or requirements are consistent with this title and title II [15 (i) such alternative procedures or requirements are consistent with this title and title II [15 USCS §§ 7001 et seq. and 15 USCS § 7021]; andUSCS §§ 7001 et seq. and 15 USCS § 7021]; and

(ii) such alternative procedures or requirements do not require, or accord greater legal status or (ii) such alternative procedures or requirements do not require, or accord greater legal status or effect to, the implementation or application of a specific technology or technical specification for effect to, the implementation or application of a specific technology or technical specification for performing the functions of creating, storing, generating, receiving, communicating, or authenticating performing the functions of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures; andelectronic records or electronic signatures; and

(B) if enacted or adopted after the date of the enactment of this Act [enacted June 30, 2000], (B) if enacted or adopted after the date of the enactment of this Act [enacted June 30, 2000], makes specific reference to this Act [15 USCS §§ 7001 et seq. and 47 USCS § 231 note].makes specific reference to this Act [15 USCS §§ 7001 et seq. and 47 USCS § 231 note].

(b) Exceptions for actions by States as market participants. Subsection (a)(2)(A)(ii) shall not apply to (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 governing procurement by any State, or any agency or the statutes, regulations, or other rules of law governing procurement by any State, or any agency or instrumentality thereof.instrumentality thereof.

(c) Prevention of circumvention. Subsection (a) does not permit a State to circumvent this title or title (c) Prevention of circumvention. Subsection (a) does not permit a State to circumvent this title or title

II [15 USCS §§ 7001 et seq. or 15 USCS § 7021] through the imposition of nonelectronic delivery II [15 USCS §§ 7001 et seq. or 15 USCS § 7021] through the imposition of nonelectronic delivery methods under section 8(b)(2) of the Uniform Electronic Transactions Act.methods under section 8(b)(2) of the Uniform Electronic Transactions Act.

EXPRESS PREEMPTION/DEFERRAL EXPRESS PREEMPTION/DEFERRAL UNDER E-SIGNUNDER E-SIGN

Preemption of Inconsistent State Version UETA Preemption of Inconsistent State Version UETA Exceptions from the Uniform NCCUSL version of UETA Exceptions from the Uniform NCCUSL version of UETA [E-Sign 7002(a)(1)][E-Sign 7002(a)(1)] States may States may notnot enact their own version of UETA exceptions to limit enact their own version of UETA exceptions to limit

the scope of e-signatures, e-records, and delivery thereof as the scope of e-signatures, e-records, and delivery thereof as authorized in the authorized in the NCCUSLNCCUSL uniform version of UETA if these uniform version of UETA if these exceptions are "inconsistent" with E-SIGNexceptions are "inconsistent" with E-SIGN

Examples:Examples: Example Example

Uniform UETA does not exclude from scope of permitted electronic notice Uniform UETA does not exclude from scope of permitted electronic notice life and health insurance benefits terminations noticeslife and health insurance benefits terminations notices

However, E-SIGN does have such an exclusionHowever, E-SIGN does have such an exclusion So, enactment of exclusions under a state version of UETA. requiring paper So, enactment of exclusions under a state version of UETA. requiring paper

life and health insurance benefit terminations notice would be permissible life and health insurance benefit terminations notice would be permissible ExampleExample

Uniform UETA does not exclude from scope of permitted electronic notice Uniform UETA does not exclude from scope of permitted electronic notice annuity terminations noticesannuity terminations notices

E-SIGN also does E-SIGN also does notnot exclude annuity terminations notice – i.e. these may be exclude annuity terminations notice – i.e. these may be given electronicallygiven electronically

So a state UETA version barring electronic annuity terminations notice So a state UETA version barring electronic annuity terminations notice would be preempted.would be preempted.

California, for example, had a host of “homebrew” exclusions many of which California, for example, had a host of “homebrew” exclusions many of which would be preempted by E-Sign (See Cal Code 1633.3(c))would be preempted by E-Sign (See Cal Code 1633.3(c))

EXPRESS EXPRESS PREEMPTION/DEFERRAL UNDER PREEMPTION/DEFERRAL UNDER

E-SIGN (CONT’D)E-SIGN (CONT’D) A state version of UETA can specify alternative A state version of UETA can specify alternative

““consistent with E-SIGNconsistent with E-SIGN” requirements for ” requirements for electronic records or signatures as to some sorts electronic records or signatures as to some sorts of notices and disclosures, avoiding preemption of notices and disclosures, avoiding preemption [E-SIGN Section 7002(a)(2)]. [E-SIGN Section 7002(a)(2)].

Consistent in this context means that it is possible to Consistent in this context means that it is possible to comply with both laws (i.e. state and federal)comply with both laws (i.e. state and federal)

ExampleExample E-SIGN is silent on issues concerning methodology of E-SIGN is silent on issues concerning methodology of

delivery of electronic recordsdelivery of electronic records Uniform UETA permits “freedom on contract” regarding Uniform UETA permits “freedom on contract” regarding

delivery (e.g. a notice concerning a policy change posted delivery (e.g. a notice concerning a policy change posted on a Web site could be contractually be agreed to be on a Web site could be contractually be agreed to be “delivered”)“delivered”)

A state version of UETA could consistent with E-SIGN A state version of UETA could consistent with E-SIGN require email notice be sent to the policyholderrequire email notice be sent to the policyholder


E-SIGN (CONT’D)E-SIGN (CONT’D) E-SIGN Defers to Uniform UETA Provisions Which E-SIGN Defers to Uniform UETA Provisions Which

Modify, Limit or Supersede ESIGN [E-Sign 7002(a)Modify, Limit or Supersede ESIGN [E-Sign 7002(a)(1)](1)]

Some read this to mean that where uniform UETA is silent Some read this to mean that where uniform UETA is silent on a provision contained in E-Sign (Most notoriously - the on a provision contained in E-Sign (Most notoriously - the consumer notice and consent provisions for e-delivery of consumer notice and consent provisions for e-delivery of records) then that E-Sign provision does not have to be records) then that E-Sign provision does not have to be applied on state law e-delivery of documentsapplied on state law e-delivery of documents

Others question whether silence is the same thing as a Others question whether silence is the same thing as a modifying, limiting or supersedingmodifying, limiting or superseding

Also note no specific “opt out” (c.f. specific provision for Also note no specific “opt out” (c.f. specific provision for state opt out from bankruptcy exemptions in Bankruptcy state opt out from bankruptcy exemptions in Bankruptcy Code 522(b)(1) )Code 522(b)(1) )

In the absence of authority, play this safe and get the In the absence of authority, play this safe and get the consumer consents required by E-Sign even in uniform consumer consents required by E-Sign even in uniform UETA states for state law required doc deliveriesUETA states for state law required doc deliveries

Some UETA states have added the E-Sign Consumer Some UETA states have added the E-Sign Consumer Notice and Consent ProvisionsNotice and Consent Provisions


E-SIGN (CONT’D)E-SIGN (CONT’D) Non-UETA State LawsNon-UETA State Laws

As noted several states have not adopted UETA, e.g. NYAs noted several states have not adopted UETA, e.g. NY One NY trial court case actually states in dicta that E-Sign One NY trial court case actually states in dicta that E-Sign

purports to preempt the NY Non-UETA statute (Electronic purports to preempt the NY Non-UETA statute (Electronic Signatures and Records Act - ESRA). See Signatures and Records Act - ESRA). See PeoplePeople v. v. McFarlanMcFarlan, 191 Misc. 2d 531, 538 (N.Y.County Supreme, , 191 Misc. 2d 531, 538 (N.Y.County Supreme, 2002)2002)

However, it may be, provided that ESRA fundamentally However, it may be, provided that ESRA fundamentally provides for the equality of electronic and non-electronic provides for the equality of electronic and non-electronic records and signatures, that only provisions of ESRA which records and signatures, that only provisions of ESRA which are “inconsistent” with E-Sign will be pre-empted not the are “inconsistent” with E-Sign will be pre-empted not the entire law. [E-SIGN7002(a)(2)]entire law. [E-SIGN7002(a)(2)]

E-Sign does require state law to explicitly refer to E-Sign if E-Sign does require state law to explicitly refer to E-Sign if enacted after June 30, 2000enacted after June 30, 2000

ESRA was enacted prior to that in 1999 ESRA was enacted prior to that in 1999 However, there were some 2002 amendments and NY was However, there were some 2002 amendments and NY was

careful to refer to E-Signcareful to refer to E-Sign In fact NY took position that NY ESRA does not “modify, limit In fact NY took position that NY ESRA does not “modify, limit

or supersede” E-Sign but rather “works in tandem” with E-or supersede” E-Sign but rather “works in tandem” with E-SignSign

EXPRESS E-SIGN EXPRESS E-SIGN PREEMPTIONS (Cont’d)PREEMPTIONS (Cont’d)

Preemption of Post 6/30/2000 State Nonelectronic Preemption of Post 6/30/2000 State Nonelectronic (Paper) delivery requirements(Paper) delivery requirements [E-Sign 7002(c)] [E-Sign 7002(c)] E-SIGN Section 7002(c), on "prevention of circumvention," E-SIGN Section 7002(c), on "prevention of circumvention,"

provides that states may not circumvent E-SIGN by imposing provides that states may not circumvent E-SIGN by imposing nonelectronic delivery methods under UETA section 8(b)(2).nonelectronic delivery methods under UETA section 8(b)(2).

Section 8(b)(2) of UETA preserves mandatory state law rules on Section 8(b)(2) of UETA preserves mandatory state law rules on method of delivery for certain notices, even though that means method of delivery for certain notices, even though that means paper notice--such as rules requiring use of first-class mail. paper notice--such as rules requiring use of first-class mail.

E-SIGN preempts Post 6/30/2000 non-electronic delivery rulesE-SIGN preempts Post 6/30/2000 non-electronic delivery rules Non-electronic state law delivery requirements existing prior to Non-electronic state law delivery requirements existing prior to

July 1, 2000 should be grandfathered, because logically they July 1, 2000 should be grandfathered, because logically they were not passed in circumvention of a yet-to-be-enacted federal were not passed in circumvention of a yet-to-be-enacted federal statute.statute.

EG with first class mail delivery requirements. The EG with first class mail delivery requirements. The information to be delivered may be provided on a disc, i.e., in information to be delivered may be provided on a disc, i.e., in electronic form, but the particular means of delivery must electronic form, but the particular means of delivery must still be via the US postal service.still be via the US postal service.

Display, delivery and formatting requirements will continue Display, delivery and formatting requirements will continue to be applicable to electronic records and signatures.to be applicable to electronic records and signatures.


Preemption of Technology-specific Preemption of Technology-specific state laws [ESIGN 7002(a)(2)(A)state laws [ESIGN 7002(a)(2)(A)(ii)](ii)] Electronic records laws that require or

accord greater legal status to a “specific technology or technical specification”

Some states had required, for example, Some states had required, for example, dual key (public/private) w/ 3dual key (public/private) w/ 3rdrd party party certificationcertification

E-SIGN preempts that kind of lawE-SIGN preempts that kind of law


Preemption of Inconsistent or Additional State Agency Preemption of Inconsistent or Additional State Agency RegulationsRegulations [E-Sign 7004(b)(1)-(2)] [E-Sign 7004(b)(1)-(2)] If a state agency is responsible for rulemaking under a statute, E-Sign If a state agency is responsible for rulemaking under a statute, E-Sign

authorizes the agency to interpret E-Sign provided the rules meet two authorizes the agency to interpret E-Sign provided the rules meet two tests: tests:

State agency rules must be "consistent" with E-SIGN Section 7001 and State agency rules must be "consistent" with E-SIGN Section 7001 and State agency rules State agency rules may notmay not add to the requirements of that section. add to the requirements of that section.

Note: this makes it clear that Note: this makes it clear that addingadding to E-Sign is to E-Sign is not the same as not the same as inconsistencyinconsistency with it, an important point in the interpretation of E-Sign’s with it, an important point in the interpretation of E-Sign’s preemptive effect, so:preemptive effect, so:

State legislatures can add to E-SIGN State legislatures can add to E-SIGN State agencies cannot, generally, add to E-SIGNState agencies cannot, generally, add to E-SIGN

E-Sign would permit a state agency to define how a consumer is to E-Sign would permit a state agency to define how a consumer is to "affirmatively consent" to electronic notices and how a merchant should "affirmatively consent" to electronic notices and how a merchant should comply with the requirement for a test of the consumer's ability to comply with the requirement for a test of the consumer's ability to receive electronic recordsreceive electronic records

But E-Sign would not permit a state agency to add requirements for But E-Sign would not permit a state agency to add requirements for which there is no framework in E-SIGN, as a matter of interpretation of which there is no framework in E-SIGN, as a matter of interpretation of E-SIGN.E-SIGN.

However, uniform UETA 12(g) does allow state agencies to add However, uniform UETA 12(g) does allow state agencies to add requirements for records retention – This is “saved” from preemption by requirements for records retention – This is “saved” from preemption by ESIGN 7002(a)(1)ESIGN 7002(a)(1)

IMPLICIT PREEMPTIONIMPLICIT PREEMPTION

Implication is that “inconsistent with E-SIGN” Implication is that “inconsistent with E-SIGN” non-uniform UETA enactments will be non-uniform UETA enactments will be preempted by E-SIGNpreempted by E-SIGN

Does not mean that states (at least Does not mean that states (at least legislatures) can’t enact requirements on legislatures) can’t enact requirements on which E-SIGN is silentwhich E-SIGN is silent

E.G. Consumer Notice Provisions of E-ESIGNE.G. Consumer Notice Provisions of E-ESIGN If a state legislature stated in UETA that it intended

to “opt out” of UETA that would be non-uniform’ Opt out language would have to be tested for

“consistency” with E-SIGN and would fail

Thank YouThank You

For A Copy of this Presentation For A Copy of this Presentation Leave your Business Card Leave your Business Card

If You Have Further Questions If You Have Further Questions Contact:Contact:

Robert J. Kiggins, Esq.Robert J. Kiggins, Esq.

McCarthy FingarMcCarthy Fingar

11 Martine Avenue11 Martine Avenue

White Plains, NY 10606White Plains, NY 10606

Tel 914-946-3817 Ext. 251Tel 914-946-3817 Ext. 251

Email Email [email protected]@mfdds.com

The E-Sign Consumer The E-Sign Consumer Consent Rules – Appendix IConsent Rules – Appendix I

Consumer Disclosures: Consumer Disclosures: Where it is required by applicable laws, Where it is required by applicable laws, rules or regulations that information be given to a consumer in rules or regulations that information be given to a consumer in writing, the use of an electronic record to provide the consumer such writing, the use of an electronic record to provide the consumer such information is permitted provided certain requirements are met: information is permitted provided certain requirements are met:

(1) the consumer has affirmatively consented to such use and has not (1) the consumer has affirmatively consented to such use and has not withdrawn such consent;withdrawn such consent;

(2) the consumer, prior to consenting, is provided with a clear and (2) the consumer, prior to consenting, is provided with a clear and conspicuous statementconspicuous statement

(a) informing the consumer of(a) informing the consumer of (i) any right or option of the consumer to (i) any right or option of the consumer to have the record provided or made available have the record provided or made available

on paperon paper or in nonelectronic form, and or in nonelectronic form, and (ii) the right of the consumer to (ii) the right of the consumer to withdraw the consentwithdraw the consent to have the record provided or to have the record provided or

made available in an electronic form and of any conditions,made available in an electronic form and of any conditions, (b) informing the consumer of whether the consent applies(b) informing the consumer of whether the consent applies

(i) only to the particular transaction which gave rise to the obligation to provide the (i) only to the particular transaction which gave rise to the obligation to provide the record, orrecord, or

(ii) to identified categories of records that may be provided or made available during (ii) to identified categories of records that may be provided or made available during the course of the parties’ relationship;the course of the parties’ relationship;

(c) describing the (c) describing the procedures the consumer must use to withdrawprocedures the consumer must use to withdraw consent and consent and to update information needed to contact the consumer electronically; andto update information needed to contact the consumer electronically; and

(d) informing the consumer (d) informing the consumer (i) how, after the consent, the consumer may, upon request, obtain a paper copy of an (i) how, after the consent, the consumer may, upon request, obtain a paper copy of an

electronic record, and electronic record, and (ii) whether any fee will be charged for such copy;(ii) whether any fee will be charged for such copy;

The E-Sign Consumer The E-Sign Consumer Consent Rules – Appendix I Consent Rules – Appendix I

(Cont’d)(Cont’d) (3) the consumer—(3) the consumer—

(a) prior to consenting, is (a) prior to consenting, is provided with a statement of the hardware provided with a statement of the hardware and software requirements for access to and retention of the and software requirements for access to and retention of the electronicelectronic records; and records; and

(b) consents electronically, or confirms his or her consent (b) consents electronically, or confirms his or her consent electronically, electronically, in a manner that reasonably demonstrates that the in a manner that reasonably demonstrates that the consumer can access information in the electronic formconsumer can access information in the electronic form that will be that will be used to provide the information that is the subject of the consent;used to provide the information that is the subject of the consent;

andand (4) after the consent of a consumer if a change in the hardware or (4) after the consent of a consumer if a change in the hardware or

software requirements needed to access or retain electronic software requirements needed to access or retain electronic records creates a material risk that the consumer will not be able records creates a material risk that the consumer will not be able to access or retain a subsequent electronic record that was the to access or retain a subsequent electronic record that was the subject of the consent, the person providing the electronic recordsubject of the consent, the person providing the electronic record

(a) provides the consumer with a statement of (a) provides the consumer with a statement of (i) the revised hardware and software requirements for access to and (i) the revised hardware and software requirements for access to and

retention of the electronic records, and retention of the electronic records, and (ii) the right to withdraw consent without the imposition of any fees for (ii) the right to withdraw consent without the imposition of any fees for

such withdrawal and without the imposition of any condition or such withdrawal and without the imposition of any condition or consequence that was not disclosed andconsequence that was not disclosed and

(b) again complies with (3) above(b) again complies with (3) above

E-SIGN Federal Agency E-SIGN Federal Agency Authority to Exempt from Authority to Exempt from

Consumer Consent Provisions Consumer Consent Provisions – Appendix II– Appendix II

A Federal regulatory agency may:A Federal regulatory agency may: with respect to matter within its jurisdiction, with respect to matter within its jurisdiction, by regulation or order issued after notice and an by regulation or order issued after notice and an

opportunity for public commentopportunity for public comment exempt without condition a specified category or exempt without condition a specified category or

type of record from the requirements relating to type of record from the requirements relating to consumer consent consumer consent

if such exemption is necessary to eliminate a if such exemption is necessary to eliminate a substantial burden on electronic commerce and substantial burden on electronic commerce and will not increase the material risk of harm to will not increase the material risk of harm to consumers.consumers.

resolution of conflicts between e-sign and ueta – “another oar dipped into troubled waters” by...

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