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Eliminating Barriers To Electronic Commerce While Protecting Consumers - June 30, 2000

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Friday, June 30, 2000


June 30, 2000

"The Electronic Signatures in Global and National Commerce Act will open up new frontiers of economic opportunity while protecting the rights of American consumers."

President Bill Clinton
Friday, June 30, 2000

Today, in Philadelphia, Pennsylvania, President Clinton signed S.761, the Electronic Signatures in Global and National Commerce Act. This legislation will eliminate legal barriers to using electronic technology to sign contracts; give consumers the same protections while doing business on-line as they have on paper; and ensure that government agencies have authority to enforce the law. After the bill signing ceremony, the President demonstrated the new electronic signature technology that Americans will be able to use to sign legally binding contracts on-line.

THE BENEFITS OF E-COMMERCE. The U.S.has benefited dramatically from the onset of the digital age. But there are still barriers - especially legal uncertainty - to the use of technology for business-to-business and business-to-consumer commerce. Under the legislation President Clinton signed today:

  • Companies will be able to contract on-line to buy and sell products;

  • Businesses will be able to collect and store transaction records electronically;

  • Consumers will have the option of transacting business on-line, without waiting for paperwork to be completed.

ELIMINATING LEGAL BARRIERS TO ELECTRONIC COMMERCE. Companies may be deterred from doing business on-line because of uncertainty about whether their on-line contracts will be legally enforceable. The law sometimes requires that contracts documents be written on paper and signed with pen-and-ink signatures, which can slow down the pace of business. The new law signed by President Clinton will overcome these barriers by:

  • Preempting paper requirements. On-line contracts, signatures, and records will now have the same legal force as their paper equivalents;

  • Establishing technology neutrality. In most cases, requirements that one technology be used over another have been eliminated;

  • Ensuring accuracy of electronic records. Most electronic contracts and records will be legally enforceable only if they are in a form that is capable of being stored and reproduced for later reference.

PROVIDING CHOICE AND PROTECTION FOR CONSUMERS. In order to achieve the full potential of electronic commerce, consumers must have confidence that they have the same protections on-line as they have in the paper world. Today's law:

  • Gives consumers who do business on-line the same protections they currently have with paper contracts;

  • Protects the consumer's right to choose whether or not to use or accept electronic records, signatures, or contracts;

  • Requires that consumers affirmatively consent to the use of electronic notices, records, and contracts; that they be given notice of their rights; and that the firm verify that the consumer can access electronically the information to be provided.

PROTECTING TAXPAYERS AND ENFORCING THE LAW. The government sometimes requires that companies keep or generate voluminous paper records documenting their transactions. Record retention serves an important public purpose by allowing agencies to monitor for compliance, protect taxpayers from fraud and abuse, and enforce the law. In many cases, these same goals can be met using digital technologies through:

  • Electronic Record Retention. The Act requires that agencies allow most records to be retained electronically, but government may establish standards for electronic records to ensure that compliance with laws can be determined, taxpayers can be protected, and agency mission can be accomplished;

  • Electronic Filing: The Act allows the government to establish standards and formats for government filings.

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