Ohio UETA (Edited)

FALL 2009

Licensing Intellectual Property

Course No.: 9200-705 (&805)-801 Course IDs: 85285, 85286	Tu 6:30 - 9:30 p.m.	Room W-215
Professor Jay Dratler, Jr.	Room 231D (IP Alcove)	(330) 972-7972	jdratler@gmail.com

Ohio's Uniform Electronic Transactions Act (UETA)
Ohio Revised Code §§ 1306.01 - 1306.23 (edited)

NOTES: The official version of UETA, the model statute, has numerous and lengthy comments, which clarify the intended meaning of the definitions and the proper interpretation of many provisions. You should refer to the comments as a guide to the meaning and application of UETA's provisions. For the latest official version of the model statute with comments, visit the NCCUSL Website, hit "FINAL ACTS" in the left margin, then scroll to and hit "Uniform Electronic Transactions Act—Final Act 1999."

You should be aware, however, that there are significant differences between Ohio's version of UETA and the Final Act 1999. You should consider any differences in statutory text before relying on the official Comments to the Final Act 1999 as authoritative "legislative history" in Ohio.

§ 1306.01. Definitions

As used in sections 1306.01 to 1306.23 of the Revised Code:

(A) "Agreement" means the bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations, and procedures given the effect of agreements under laws otherwise applicable to a particular transaction.

(B) "Automated transaction" means a transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an obligation required by the transaction.

(C) "Computer program" means a set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result.

(D) "Contract" means the total legal obligation resulting from the parties' agreement as affected by sections 1306.01 to 1306.23 of the Revised Code and other applicable law.

(E) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(F) "Electronic agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

(G) "Electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means.

(H) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

(I) "Governmental agency" means any executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the federal government, of a state, or of a county, municipality, or other political subdivision of a state.

(J) "Information" means data, text, images, sounds, codes, computer programs, software, databases, or the like.

(K) "Information processing system" means an electronic system for creating, generating, sending, receiving, storing, displaying, or processing information.

(L) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency, public corporation, or any other legal or commercial entity.

(M) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(N) "Security procedure" means a procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. "Security procedure" includes a procedure that requires the use of algorithms or other codes, identifying word or numbers, encryption, or callback or other acknowledgment procedures.

(O) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. "State" includes an Indian tribe or band, or Alaskan native village, that is recognized by federal law or formally acknowledged by a state.

(P) "Transaction" means an action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs.

§ 1306.02. Scope of chapter; exceptions

(A) Except as provided in division (B) of this section, sections 1306.01 to 1306.23 of the Revised Code apply to electronic records and electronic signatures relating to a transaction.

(B) Sections 1306.01 to 1306.23 of the Revised Code do not apply to a transaction to the extent it is governed by any of the following:

(1) A law governing the creation and execution of wills, codicils, or testamentary trusts;

(2) Chapter 1301 [miscellaneous provisions of the UCC, including special sales of grain and air conditioners and attorneys' fee agreements in commercial contracts], except sections 1301.07 [waiver or renunciation of claim or right after breach] and 1301.12 [UCC's statute of frauds for kinds of personal property not otherwise covered], and Chapters 1303 [commercial paper], 1304 [bank deposits and collections], 1305 [letters of credit], 1307 [warehouse receipts, bills of lading, and other documents of title], 1308 [investment securities], and 1309 [secured transactions] of the Revised Code.
§ 1306.03. Prospective application of chapter

Sections 1306.01 to 1306.23 of the Revised Code apply to any electronic record or electronic signature created, generated, sent, communicated, received, or stored on or after the effective date of sections 1306.01 to 1306.23 of the Revised Code [which was September 14, 2000].

§ 1306.04. Electronic format not mandatory; agreement to conduct transaction by electronic means; determination of legal consequences

(A) Sections 1306.01 to 1306.23 of the Revised Code do not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form.

(B) Sections 1306.01 to 1306.23 of the Revised Code apply only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct.

(C) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this division may not be waived by agreement.

(D) Except as otherwise provided in sections 1306.01 to 1306.23 of the Revised Code, any of the provisions of such sections may be varied by agreement. The presence in certain provisions of sections 1306.01 to 1306.23 of the Revised Code of the words "unless otherwise agreed," or words of similar import, does not imply that the effect of other provisions may not be varied by agreement.

(E) Whether an electronic record or electronic signature has legal consequences is determined by sections 1306.01 to 1306.23 of the Revised Code and other applicable law.

§ 1306.05. Citation, construction and application of chapter

Sections 1306.01 to 1306.15 of the Revised Code may be known and cited as the "uniform electronic transactions act" and shall be construed and applied as follows:

(A) To facilitate electronic transactions consistent with other applicable law;

(B) To be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices;

(C) To effectuate its general purpose to make uniform the law with respect to the subject of sections 1306.01 to 1306.15 of the Revised Code among states enacting the uniform electronic transactions act.

§ 1306.06. Electronic record or signature satisfies legal requirements

(A) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(B) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(C) If a law requires a record to be in writing, an electronic record satisfies the law.

(D) If a law requires a signature, an electronic signature satisfies the law.

§ 1306.07. Electronic record must be capable of retention by recipient; posting or display requirements

(A) If the parties have agreed to conduct a transaction by electronic means and a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered, as the case may be, in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.

(B) If a law other than sections 1306.01 to 1306.23 of the Revised Code requires a record to be posted or displayed in a certain manner, to be sent, communicated, or transmitted by a specified method, or to contain information that is formatted in a certain manner, all of the following apply:

(1) The record shall be posted or displayed in the manner specified in the other law.

(2) Except as otherwise provided in division (D)(2) of this section, the record shall be sent, communicated, or transmitted by the method specified in the other law.

(3) The record shall contain the information formatted in the manner specified in the other law. (C) If a sender inhibits the ability of a recipient to store or print an electronic record, the electronic record is not enforceable against the recipient.
(D) Divisions (A), (B), and (C) of this section may not be varied by agreement, except as follows:

(1) To the extent a law, other than sections 1306.01 to 1306.23 of the Revised Code, requires information to be provided, sent, or delivered in writing but permits that requirement to be varied by agreement, the requirement under division (A) of this section that the information be in the form of an electronic record capable of retention also may be varied by agreement;

(2) A requirement under a law, other than sections 1306.01 to 1306.23 of the Revised Code, to send, communicate, or transmit a record by regular mail may be varied by agreement to the extent permitted by the other law.

§ 1306.08. When electronic record or signature is attributable to person; effect

(A) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature is attributable.

(B) The effect of an electronic record or electronic signature attributed to a person under division (A) of this section shall be determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law.

§ 1306.09. Transmission change or error

(A) If a change or error in an electronic record occurs in a transmission between parties to a transaction, both of the following apply:

(1) If the parties have agreed to use a security procedure to detect changes or errors and one party has conformed to the procedure, but the other party has not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the changed or erroneous electronic record.

(2) In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person, if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, the individual does all of the following:

(b) The individual takes reasonable steps, including steps that conform to the other person's reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record.

(c) The individual has not used or received any benefit or value from the consideration, if any, received from the other person.

(B) If divisions (A)(1) and (2) of this section do not apply, the change or error has the effect provided by other law, including the law of mistake, and the parties' contract, if any.

(C) Divisions (A)(2) and (B) of this section may not be varied by agreement.

§ 1306.10. Notary, acknowledgment, verification or oath requirement

If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.

§ 1306.11. Requirement that record be retained; checks

(A) If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record if both of the following are satisfied:

(1) The electronic record accurately and completely reflects the information set forth in the record after it was first generated in its final form as an electronic record or otherwise.

(2) The electronic record remains accessible for later reference. (B) A requirement to retain a record in accordance with division (A) of this section does not apply to any information the sole purpose of which is to enable the record to be sent, communicated, or received.

(C) A person satisfies division (A) of this section by using the services of another person if the requirements of that division are satisfied.

(D) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with division (A) of this section.

(E) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with division (A) of this section.

(F) A record retained as an electronic record in accordance with division (A) of this section satisfies a law requiring a person to retain a record for evidentiary, audit, or similar purposes, unless a law enacted after the effective date of this section specifically prohibits the use of an electronic record for the specified purpose.

(G) This section does not preclude a governmental agency of this state from specifying additional requirements for the retention of a record subject to the agency's jurisdiction.

§ 1306.12. Use as evidence

In a proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form.

§ 1306.13. Formation of contract; determination of terms

In an automated transaction, all of the following apply:

(A) A contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents' actions or the resulting terms and agreements.

(B) A contract may be formed by the interaction of an electronic agent and an individual, acting on the individual's own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and that the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance.

(C) The terms of the contract described in this section are determined by the substantive law applicable to the contract.

§ 1306.14. When record is deemed sent and received

(A) Unless otherwise agreed between the sender and the recipient, an electronic record is sent when it satisfies all of the following:

(1) The record is addressed properly or otherwise directed properly to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent, and from which the recipient is able to retrieve the electronic record.

(2) The record is in a form capable of being processed by the information processing system described in division (A)(1) of this section.

(3) The record enters an information processing system outside the control of the sender or of a person that sent the electronic record on behalf of the sender, or enters a region of the information processing system designated or used by the recipient that is under the control of the recipient. (B) Unless otherwise agreed between a sender and the recipient, an electronic record is received when both of the following are satisfied:

(1) The record enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent, and from which the recipient is able to retrieve the electronic record.

(2) The record is in a form capable of being processed by the information processing system described in division (B)(1) of this section. (C) Division (B) of this section applies even if the place the information processing system is located is different from the place the electronic record is deemed to be received under division (D) of this section.

(D)

(1) Unless otherwise expressly provided in the electronic record or agreed between the sender and the recipient, an electronic record is deemed to be sent from the sender's place of business and to be received at the recipient's place of business.

(2) For purposes of division (D)(1) of this section, both of the following apply:

(a) If the sender or recipient has more than one place of business, the place of business of that person is the place having the closest relationship to the underlying transaction.

(b) If the sender or the recipient does not have a place of business, the place of business is the sender's or recipient's residence, as the case may be.

(E) An electronic record is received under division (B) of this section even if no individual is aware of its receipt.

(F) Receipt of an electronic acknowledgment from an information processing system described in division (B) of this section establishes that a record was received, but, by itself, does not establish that the content sent corresponds to the content received.

(G)

(1) If a person is aware that an electronic record purportedly sent under division (A) of this section, or purportedly received under division (B) of this section, was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law.

(2) Except to the extent permitted by other law, division (G)(1) of this section may not be varied by agreement.

§ 1306.15. Control of transferable record

[This section, which pertains to electronic versions of commercial paper, warehouse receipts, bills of lading, and other documents of title—called "transferable records"—is omitted.]
§ 1306.16. Enforceability against consumer

(A) A provision of a nonelectronic contract involving a consumer and to which a state agency is not a party that authorizes the conducting of a transaction or any part of a transaction by electronic means is unenforceable against the consumer, unless the consumer separately signs the provision.

(B) A consumer's agreement to conduct a transaction or a part of a transaction electronically shall not be inferred solely from the fact that the consumer has used electronic means to pay an account or register a purchase or warranty.

(C) Divisions (A) and (B) of this section apply to every transaction described in those divisions notwithstanding any other provision of sections 1306.01 to 1306.23 of the Revised Code. This section shall not be varied by agreement.

(D) For purposes of this section, both of the following apply:

(1) "Consumer" means an individual who is involved in a transaction primarily for personal, family, or household purposes.

(2) "State agency" means every organized body, office, or agency established by the laws of the state for the exercise of any function of state government.
§ 1306.17. Commercial reasonableness of security procedure

(A) This section and section 1306.18 of the Revised Code apply to the attribution of electronic records and electronic signatures among parties that are not state agencies.

(B) For purposes of this section and section 1306.18 of the Revised Code, the commercial reasonableness of a security procedure is to be determined by a court. In making this determination, both of the following apply:

(1) A security procedure established by statute or regulation is effective for transactions covered by the statute or regulation.

(2) Except as otherwise provided in division (B)(1) of this section, the commercial reasonableness and effectiveness is to be determined in light of the purposes of the security procedure and the commercial circumstances at the time the parties agree to or adopt the procedure. (C) As used in this section, "state agency" means every organized body, office, or agency established by the laws of the state for the exercise of any function of state government.

§ 1306.18. Compliance with security procedure; requirements for attributing signature or record to party

(A) If there is a security procedure between the parties with respect to an electronic signature or electronic record, both of the following apply:

(1) The effect of compliance with a security procedure established by a law or regulation is determined by that law or regulation.

(2) In all other cases than those described in division (A)(1) of this section, if the parties agree to use or otherwise knowingly adopt a security procedure to verify the person from which an electronic signature or electronic record has been sent, the electronic signature or electronic record is attributable to the person identified by the security procedure, if the person relying on the attribution establishes all of the following:

(a) The security procedure is commercially reasonable.

(b) The party accepted or relied on the electronic message in good faith and in compliance with the security procedure and any additional agreement with or separate instructions of the other party.

(B) If the electronic signature or electronic record is not attributable to a party under section 1306.08 of the Revised Code but is attributable to the party under other provisions of this section, then, notwithstanding the other provisions of this section, the electronic signature or electronic record is not attributable to the party if the party establishes that the electronic signature or electronic record was caused directly or indirectly by a person meeting any of the following:

(1) The person was not entrusted at any time with the right or duty to act for the party with respect to such electronic signature or electronic record or security procedure.

(2) The person lawfully obtained access to transmitting facilities of the party, if such access facilitated the misuse of the security procedure.

(3) The person obtained, from a source controlled by the party, information facilitating misuse of the security procedure. (C) If the parties use a commercially reasonable security procedure to detect errors or changes with respect to an electronic signature or electronic record, both of the following apply:

(1) The effect of a security procedure is determined by the agreement between the parties, or, in the absence of an agreement, by this section or any law establishing the security procedure.

(2) Unless the circumstances indicate otherwise, if a security procedure indicates that an electronic signature or electronic record has not been altered since a particular time, it shall be treated as not having been altered since that time.

§ 1306.19. Exemption for consumer transactions

Sections 1306.17 and 1306.18 of the Revised Code do not apply to transactions to which a consumer is a party.

[Sections 1306.20 - 1306.21, which pertain to uses of electronic records and electronic signatures by state agencies, are omitted.]

§ 1306.22. Application to legislature and courts

(A) Nothing in sections 1306.01 to 1306.23 of the Revised Code shall be construed to require the general assembly, any legislative agency, the supreme court, the other courts of record in this state, or any judicial agency to use or permit the use of electronic records and electronic signatures.

(B) The general assembly and the supreme court may adopt rules pertaining to the use of electronic records and electronic signatures by their respective bodies and agencies.

§ 1306.23. Exemptions to disclosure of records

Records that would disclose or may lead to the disclosure of records or information that would jeopardize the state's continued use or security of any computer or telecommunications devices or services associated with electronic signatures, electronic records, or electronic transactions are not public records for purposes of section 149.43 of the Revised Code.

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