From the August 1999 issue of Startups

Can a faxed signature or an e-mail message carrying an agreement to a contract serve as a valid contract in a court of law? In Georgia¾and upward of 40 other states--they can. Georgia recently enacted the Electronic Writings and Signatures Act, legalizing business conducted by e-mail and fax. The ruling means any business or government entity conducting transactions and negotiating deals via fax or e-mail now have contracts as valid and binding as oral and written contracts, says H. West Richards, executive director of the Georgia Electronic Commerce Association, which spearheaded the effort.

There is precedence for handshakes and telegrams to legally bind agreements, legal experts note. Some have felt e-mail and faxes would enjoy the same protection. But with no direct case law in e-commerce, state leaders sought a model that would apply, often using case law based on oral agreements or telecommunications law as a foundation. That poses a problem--as Richards points out, "it doesn't always transfer over nicely."

Consequently, Congress is considering a digital signatures bill. The National Conference of Commissioners on Uniform State Laws, a federal-state consortium, is reviewing a Uniform Electronic Transactions Act (UETA) that creates groundwork for digital agreement uniformity.

While the state follows Florida, Illinois, Utah, Virginia and others that have passed various laws on the issue, Georgia's is seen as being among the most sweeping in scope. It even allows electronic records to satisfy requirements for archival of written documents like contracts or other legal agreements, according to Richard Keck, a partner with Atlanta legal firm Troutman Sanders LLP and chief architect of the bill. "That's a huge impact," Keck says. "It certainly reduces your cost of having to put things in paper and store them."

The law was spurred by big corporations like BellSouth, Equifax and Georgia Power, which had been faxing contracts and assuming they were legal, Richards says.

For corporations and homebased businesses alike, the need--and remedy--is clear. "It's going to affect privacy, intellectual property, risk management, e-commerce," Richards says. "The Internet is like the wild, wild West. There aren't any rules."

Now, in Georgia--and a growing number of states--there are.

Contact Source
Georgia Electronic Commerce Association
http://www.geca.org

Troutman Sanders LLP
(404) 885-3236

Jeff Zbar is a homebased writer, speaker and author of Home Office Know-How (Upstart Publishing).