By Dunnam H.B. No. 1379
77R246 LJR-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the Uniform Electronic Transactions Act.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 6, Civil Practice and Remedies Code, is
1-5 amended by adding Chapter 148 to read as follows:
1-6 CHAPTER 148. UNIFORM ELECTRONIC TRANSACTIONS ACT
1-7 Sec. 148.001. SHORT TITLE. This chapter may be cited as the
1-8 Uniform Electronic Transactions Act.
1-9 Sec. 148.002. DEFINITIONS. In this chapter:
1-10 (1) "Agreement" means the bargain of the parties in
1-11 fact, as found in their language or inferred from other
1-12 circumstances and from rules, regulations, and procedures given the
1-13 effect of agreements under laws otherwise applicable to a
1-14 particular transaction.
1-15 (2) "Automated transaction" means a transaction
1-16 conducted or performed, in whole or in part, by electronic means or
1-17 electronic records, in which the acts or records of one or both
1-18 parties are not reviewed by an individual in the ordinary course in
1-19 forming a contract, performing under an existing contract, or
1-20 fulfilling an obligation required by the transaction.
1-21 (3) "Computer program" means a set of statements or
1-22 instructions to be used directly or indirectly in an information
1-23 processing system in order to bring about a certain result.
1-24 (4) "Contract" means the total legal obligation
2-1 resulting from the parties' agreement as affected by this chapter
2-2 and other applicable law.
2-3 (5) "Electronic" means relating to technology having
2-4 electrical, digital, magnetic, wireless, optical, electromagnetic,
2-5 or similar capabilities.
2-6 (6) "Electronic agent" means a computer program or an
2-7 electronic or other automated means used independently to initiate
2-8 an action or respond to electronic records or performances in whole
2-9 or in part, without review or action by an individual.
2-10 (7) "Electronic record" means a record created,
2-11 generated, sent, communicated, received, or stored by electronic
2-12 means.
2-13 (8) "Electronic signature" means an electronic sound,
2-14 symbol, or process attached to or logically associated with a
2-15 record and executed or adopted by a person with the intent to sign
2-16 the record.
2-17 (9) "Governmental agency" means an executive,
2-18 legislative, or judicial agency, department, board, commission,
2-19 authority, institution, or instrumentality of the federal
2-20 government or of a State or of a county, municipality, or other
2-21 political subdivision of a State.
2-22 (10) "Information" means data, text, images, sounds,
2-23 codes, computer programs, software, databases, or the like.
2-24 (11) "Information processing system" means an
2-25 electronic system for creating, generating, sending, receiving,
2-26 storing, displaying, or processing information.
2-27 (12) "Record" means information that is inscribed on a
3-1 tangible medium or that is stored in an electronic or other medium
3-2 and is retrievable in perceivable form.
3-3 (13) "Security procedure" means a procedure employed
3-4 for the purpose of verifying that an electronic signature, record,
3-5 or performance is that of a specific person or for detecting
3-6 changes or errors in the information in an electronic record. The
3-7 term includes a procedure that requires the use of algorithms or
3-8 other codes, identifying words or numbers, encryption, or callback
3-9 or other acknowledgment procedures.
3-10 (14) "State" means a State of the United States, the
3-11 District of Columbia, Puerto Rico, the United States Virgin
3-12 Islands, or any territory or insular possession subject to the
3-13 jurisdiction of the United States. The term includes an Indian
3-14 tribe or band, or Alaskan native village, which is recognized by
3-15 federal law or formally acknowledged by a State.
3-16 (15) "Transaction" means an action or set of actions
3-17 occurring between two or more persons relating to the conduct of
3-18 business, commercial, or governmental affairs.
3-19 Sec. 148.003. SCOPE. (a) Except as otherwise provided in
3-20 Subsection (b), this chapter applies to electronic records and
3-21 electronic signatures relating to a transaction.
3-22 (b) This chapter does not apply to a transaction to the
3-23 extent it is governed by:
3-24 (1) a law governing the creation and execution of
3-25 wills, codicils, or testamentary trusts;
3-26 (2) the Uniform Commercial Code, other than Sections
3-27 1.107 and 1.206, and Chapters 2 and 2A; and
4-1 (3) (other laws, if any, identified by State).
4-2 (c) This chapter applies to an electronic record or
4-3 electronic signature otherwise excluded from the application of
4-4 this chapter under Subsection (b) when used for a transaction
4-5 subject to a law other than those specified in Subsection (b).
4-6 (d) A transaction subject to this chapter is also subject to
4-7 other applicable substantive law.
4-8 Sec. 148.004. PROSPECTIVE APPLICATION. This chapter applies
4-9 to any electronic record or electronic signature created,
4-10 generated, sent, communicated, received, or stored on or after the
4-11 effective date of this chapter.
4-12 Sec. 148.005. USE OF ELECTRONIC RECORDS AND ELECTRONIC
4-13 SIGNATURES; VARIATION BY AGREEMENT. (a) This chapter does not
4-14 require a record or signature to be created, generated, sent,
4-15 communicated, received, stored, or otherwise processed or used by
4-16 electronic means or in electronic form.
4-17 (b) This chapter applies only to transactions between
4-18 parties each of which has agreed to conduct transactions by
4-19 electronic means. Whether the parties agree to conduct a
4-20 transaction by electronic means is determined from the context and
4-21 surrounding circumstances, including the parties' conduct.
4-22 (c) A party that agrees to conduct a transaction by
4-23 electronic means may refuse to conduct other transactions by
4-24 electronic means. The right granted by this subsection may not be
4-25 waived by agreement.
4-26 (d) Except as otherwise provided in this chapter, the effect
4-27 of any of its provisions may be varied by agreement. The presence
5-1 in certain provisions of this chapter of the words "unless
5-2 otherwise agreed," or words of similar import, does not imply that
5-3 the effect of other provisions may not be varied by agreement.
5-4 (e) Whether an electronic record or electronic signature has
5-5 legal consequences is determined by this chapter and other
5-6 applicable law.
5-7 Sec. 148.006. CONSTRUCTION AND APPLICATION. This chapter
5-8 must be construed and applied:
5-9 (1) to facilitate electronic transactions consistent
5-10 with other applicable law;
5-11 (2) to be consistent with reasonable practices
5-12 concerning electronic transactions and with the continued expansion
5-13 of those practices; and
5-14 (3) to effectuate its general purpose to make uniform
5-15 the law with respect to the subject of this chapter among states
5-16 enacting it.
5-17 Sec. 148.007. LEGAL RECOGNITION OF ELECTRONIC RECORDS,
5-18 ELECTRONIC SIGNATURES, AND ELECTRONIC CONTRACTS. (a) A record or
5-19 signature may not be denied legal effect or enforceability solely
5-20 because it is in electronic form.
5-21 (b) A contract may not be denied legal effect or
5-22 enforceability solely because an electronic record was used in its
5-23 formation.
5-24 (c) If a law requires a record to be in writing, an
5-25 electronic record satisfies the law.
5-26 (d) If a law requires a signature, an electronic signature
5-27 satisfies the law.
6-1 Sec. 148.008. PROVISION OF INFORMATION IN WRITING;
6-2 PRESENTATION OF RECORDS. (a) If parties have agreed to conduct a
6-3 transaction by electronic means and a law requires a person to
6-4 provide, send, or deliver information in writing to another person,
6-5 the requirement is satisfied if the information is provided, sent,
6-6 or delivered, as the case may be, in an electronic record capable
6-7 of retention by the recipient at the time of receipt. An
6-8 electronic record is not capable of retention by the recipient if
6-9 the sender or its information processing system inhibits the
6-10 ability of the recipient to print or store the electronic record.
6-11 (b) If a law other than this chapter requires a record (i)
6-12 to be posted or displayed in a certain manner, (ii) to be sent,
6-13 communicated, or transmitted by a specified method, or (iii) to
6-14 contain information that is formatted in a certain manner, the
6-15 following rules apply:
6-16 (1) The record must be posted or displayed in the
6-17 manner specified in the other law.
6-18 (2) Except as otherwise provided in Subsection (d)(2),
6-19 the record must be sent, communicated, or transmitted by the method
6-20 specified in the other law.
6-21 (3) The record must contain the information formatted
6-22 in the manner specified in the other law.
6-23 (c) If a sender inhibits the ability of a recipient to store
6-24 or print an electronic record, the electronic record is not
6-25 enforceable against the recipient.
6-26 (d) The requirements of this section may not be varied by
6-27 agreement, but:
7-1 (1) to the extent a law other than this chapter
7-2 requires information to be provided, sent, or delivered in writing
7-3 but permits that requirement to be varied by agreement, the
7-4 requirement under Subsection (a) that the information be in the
7-5 form of an electronic record capable of retention may also be
7-6 varied by agreement; and
7-7 (2) a requirement under a law other than this chapter
7-8 to send, communicate, or transmit a record by first-class mail may
7-9 be varied by agreement to the extent permitted by the other law.
7-10 Sec. 148.009. ATTRIBUTION AND EFFECT OF ELECTRONIC RECORD
7-11 AND ELECTRONIC SIGNATURE. (a) An electronic record or electronic
7-12 signature is attributable to a person if it was the act of the
7-13 person. The act of the person may be shown in any manner,
7-14 including a showing of the efficacy of any security procedure
7-15 applied to determine the person to which the electronic record or
7-16 electronic signature was attributable.
7-17 (b) The effect of an electronic record or electronic
7-18 signature attributed to a person under Subsection (a) is determined
7-19 from the context and surrounding circumstances at the time of its
7-20 creation, execution, or adoption, including the parties' agreement,
7-21 if any, and otherwise as provided by law.
7-22 Sec. 148.010. EFFECT OF CHANGE OR ERROR. (a) If a change or
7-23 error in an electronic record occurs in a transmission between
7-24 parties to a transaction, the rules provided by this section apply.
7-25 (b) If the parties have agreed to use a security procedure
7-26 to detect changes or errors and one party has conformed to the
7-27 procedure, but the other party has not, and the nonconforming party
8-1 would have detected the change or error had that party also
8-2 conformed, the conforming party may avoid the effect of the changed
8-3 or erroneous electronic record.
8-4 (c) In an automated transaction involving an individual, the
8-5 individual may avoid the effect of an electronic record that
8-6 resulted from an error made by the individual in dealing with the
8-7 electronic agent of another person if the electronic agent did not
8-8 provide an opportunity for the prevention or correction of the
8-9 error and, at the time the individual learns of the error, the
8-10 individual:
8-11 (1) promptly notifies the other person of the error
8-12 and that the individual did not intend to be bound by the
8-13 electronic record received by the other person;
8-14 (2) takes reasonable steps, including steps that
8-15 conform to the other person's reasonable instructions, to return to
8-16 the other person or, if instructed by the other person, to destroy
8-17 the consideration received, if any, as a result of the erroneous
8-18 electronic record; and
8-19 (3) has not used or received any benefit or value from
8-20 the consideration, if any, received from the other person.
8-21 (d) If neither Subsection (b) nor Subsection (c) applies,
8-22 the change or error has the effect provided by other law, including
8-23 the law of mistake, and the parties' contract, if any.
8-24 (e) Subsections (c) and (d) may not be varied by agreement.
8-25 Sec. 148.011. NOTARIZATION AND ACKNOWLEDGMENT. If a law
8-26 requires a signature or record to be notarized, acknowledged,
8-27 verified, or made under oath, the requirement is satisfied if the
9-1 electronic signature of the person authorized to perform those
9-2 acts, together with all other information required to be included
9-3 by other applicable law, is attached to or logically associated
9-4 with the signature or record.
9-5 Sec. 148.012. RETENTION OF ELECTRONIC RECORDS; ORIGINALS.
9-6 (a) If a law requires that a record be retained, the requirement
9-7 is satisfied by retaining an electronic record of the information
9-8 in the record which:
9-9 (1) accurately reflects the information set forth in
9-10 the record after it was first generated in its final form as an
9-11 electronic record or otherwise; and
9-12 (2) remains accessible for later reference.
9-13 (b) A requirement to retain a record in accordance with
9-14 Subsection (a) does not apply to any information the sole purpose
9-15 of which is to enable the record to be sent, communicated, or
9-16 received.
9-17 (c) A person may satisfy Subsection (a) by using the
9-18 services of another person if the requirements of that subsection
9-19 are satisfied.
9-20 (d) If a law requires a record to be presented or retained
9-21 in its original form, or provides consequences if the record is not
9-22 presented or retained in its original form, that law is satisfied
9-23 by an electronic record retained in accordance with Subsection (a).
9-24 (e) If a law requires retention of a check, that requirement
9-25 is satisfied by retention of an electronic record of the
9-26 information on the front and back of the check in accordance with
9-27 Subsection (a).
10-1 (f) A record retained as an electronic record in accordance
10-2 with Subsection (a) satisfies a law requiring a person to retain a
10-3 record for evidentiary, audit, or like purposes, unless a law
10-4 enacted after January 1, 2002, specifically prohibits the use of an
10-5 electronic record for the specified purpose.
10-6 (g) This section does not preclude a governmental agency of
10-7 this State from specifying additional requirements for the
10-8 retention of a record subject to the agency's jurisdiction.
10-9 Sec. 148.013. ADMISSIBILITY IN EVIDENCE. In a proceeding,
10-10 evidence of a record or signature may not be excluded solely
10-11 because it is in electronic form.
10-12 Sec. 148.014. AUTOMATED TRANSACTION. (a) In an automated
10-13 transaction, the rules provided by this section apply.
10-14 (b) A contract may be formed by the interaction of
10-15 electronic agents of the parties, even if no individual was aware
10-16 of or reviewed the electronic agents' actions or the resulting
10-17 terms and agreements.
10-18 (c) A contract may be formed by the interaction of an
10-19 electronic agent and an individual, acting on the individual's own
10-20 behalf or for another person, including by an interaction in which
10-21 the individual performs actions that the individual is free to
10-22 refuse to perform and which the individual knows or has reason to
10-23 know will cause the electronic agent to complete the transaction or
10-24 performance.
10-25 (d) The terms of the contract are determined by the
10-26 substantive law applicable to it.
10-27 Sec. 148.015. TIME AND PLACE OF SENDING AND RECEIPT. (a)
11-1 Unless otherwise agreed between the sender and the recipient, an
11-2 electronic record is sent when it:
11-3 (1) is addressed properly or otherwise directed
11-4 properly to an information processing system that the recipient has
11-5 designated or uses for the purpose of receiving electronic records
11-6 or information of the type sent and from which the recipient is
11-7 able to retrieve the electronic record;
11-8 (2) is in a form capable of being processed by that
11-9 system; and
11-10 (3) enters an information processing system outside
11-11 the control of the sender or of a person that sent the electronic
11-12 record on behalf of the sender or enters a region of the
11-13 information processing system designated or used by the recipient
11-14 which is under the control of the recipient.
11-15 (b) Unless otherwise agreed between a sender and the
11-16 recipient, an electronic record is received when:
11-17 (1) it enters an information processing system that
11-18 the recipient has designated or uses for the purpose of receiving
11-19 electronic records or information of the type sent and from which
11-20 the recipient is able to retrieve the electronic record; and
11-21 (2) it is in a form capable of being processed by that
11-22 system.
11-23 (c) Subsection (b) applies even if the place the information
11-24 processing system is located is different from the place the
11-25 electronic record is deemed to be received under Subsection (d).
11-26 (d) Unless otherwise expressly provided in the electronic
11-27 record or agreed between the sender and the recipient, an
12-1 electronic record is deemed to be sent from the sender's place of
12-2 business and to be received at the recipient's place of business.
12-3 For purposes of this subsection, the following rules apply:
12-4 (1) if the sender or recipient has more than one place
12-5 of business, the place of business of that person is the place
12-6 having the closest relationship to the underlying transaction; and
12-7 (2) if the sender or the recipient does not have a
12-8 place of business, the place of business is the sender's or
12-9 recipient's residence, as the case may be.
12-10 (e) An electronic record is received under Subsection (b)
12-11 even if no individual is aware of its receipt.
12-12 (f) Receipt of an electronic acknowledgment from an
12-13 information processing system described in Subsection (b)
12-14 establishes that a record was received but, by itself, does not
12-15 establish that the content sent corresponds to the content
12-16 received.
12-17 (g) If a person is aware that an electronic record
12-18 purportedly sent under Subsection (a), or purportedly received
12-19 under Subsection (b), was not actually sent or received, the legal
12-20 effect of the sending or receipt is determined by other applicable
12-21 law. Except to the extent permitted by the other law, the
12-22 requirements of this subsection may not be varied by agreement.
12-23 Sec. 148.016. TRANSFERABLE RECORDS. (a) In this section,
12-24 "transferable record" means an electronic record:
12-25 (1) that would be a note under Chapter 3, Business &
12-26 Commerce Code, or a document under Chapter 7, Business & Commerce
12-27 Code, if the electronic record were in writing; and
13-1 (2) that the issuer of the electronic record expressly
13-2 has agreed is a transferable record.
13-3 (b) A person has control of a transferable record if a
13-4 system employed for evidencing the transfer of interests in the
13-5 transferable record reliably establishes that person as the person
13-6 to which the transferable record was issued or transferred.
13-7 (c) A system satisfies Subsection (b), and a person is
13-8 deemed to have control of a transferable record, if the
13-9 transferable record is created, stored, and assigned in such a
13-10 manner that:
13-11 (1) a single authoritative copy of the transferable
13-12 record exists which is unique, identifiable, and, except as
13-13 otherwise provided in Subdivisions (4), (5), and (6), unalterable;
13-14 (2) the authoritative copy identifies the person
13-15 asserting control as:
13-16 (A) the person to which the transferable record
13-17 was issued; or
13-18 (B) if the authoritative copy indicates that the
13-19 transferable record has been transferred, the person to which the
13-20 transferable record was most recently transferred;
13-21 (3) the authoritative copy is communicated to and
13-22 maintained by the person asserting control or its designated
13-23 custodian;
13-24 (4) copies or revisions that add or change an
13-25 identified assignee of the authoritative copy can be made only with
13-26 the consent of the person asserting control;
13-27 (5) each copy of the authoritative copy and any copy
14-1 of a copy is readily identifiable as a copy that is not the
14-2 authoritative copy; and
14-3 (6) any revision of the authoritative copy is readily
14-4 identifiable as authorized or unauthorized.
14-5 (d) Except as otherwise agreed, a person having control of a
14-6 transferable record is the holder, as defined in Section 1.201,
14-7 Business & Commerce Code, of the transferable record and has the
14-8 same rights and defenses as a holder of an equivalent record or
14-9 writing under the Uniform Commercial Code, including, if the
14-10 applicable statutory requirements under Section 3.302(a), 7.501, or
14-11 9.308, Business & Commerce Code, are satisfied, the rights and
14-12 defenses of a holder in due course, a holder to which a negotiable
14-13 document of title has been duly negotiated, or a purchaser,
14-14 respectively. Delivery, possession, and indorsement are not
14-15 required to obtain or exercise any of the rights under this
14-16 subsection.
14-17 (e) Except as otherwise agreed, an obligor under a
14-18 transferable record has the same rights and defenses as an
14-19 equivalent obligor under equivalent records or writings under the
14-20 Uniform Commercial Code.
14-21 (f) If requested by a person against which enforcement is
14-22 sought, the person seeking to enforce the transferable record shall
14-23 provide reasonable proof that the person is in control of the
14-24 transferable record. Proof may include access to the authoritative
14-25 copy of the transferable record and related business records
14-26 sufficient to review the terms of the transferable record and to
14-27 establish the identity of the person having control of the
15-1 transferable record.
15-2 SECTION 2. This Act takes effect January 1, 2002.