When Bill Clinton was President, he signed into law legislation that was supposed to pave the way for electronic transactions. Well, Clinton’s been gone for quite a while now and I haven’t noticed a big boom in electronic transactions. Why?
For one thing, no one is really sure how it all works. The other day on a PDF E-mail discussion group someone wanted to know if it was okay to keep records in PDF form; the fellow’s lawyer had told him he had to keep his documents on a WORM drive to preserve their admissibility in court (which is completely wrong). So when I say ‘no one is really sure how this all works’ I’m including lawyers. But then lawyers aren’t known for their prowess in making transactions work more smoothly.
Actually, there is another problem with all these electronic records and transactions: how they work depends on context in which they are used. But let’s not make this complicated. The simple truth is that, if parties to a transaction agree that digital signatures work, then the digital signatures are okay. If they agree that the transaction will be completely electronic that’s okay too. But if one of them has a penchant for paper, then that’s the way the transaction will be carried out. Of course, the guy with the penchant for electronic stuff can just scan the papers and know that he is in all likelihood going to satisfy his record-keeping requirements. So the world has indeed been nicely paved for electronic transactions.
How do I know all of this? Well, for starters I asked my law professor friend Henry Gabriel. He was the reporter for the Louisiana Electronic Transactions Act [PDF: 60 KB], and was on the drafting committee of NCCUSL, which created the Uniform Electronic Transactions Act. He was also the reporter for the revision to the UCC Sales and Lease provisions and the chair of the UCC committee to revise the law of documents of title- which provides for electronic documents of title.
Bottom line? He knows a lot of stuff about electronic transactions. And he has graciously shared his Powerpoint presentation, which lays it all out. If you want a clear explanation of how it all this electronic transaction stuff works click here. If you don’t then, by all means, keep shuffling paper.