Massachusetts Uniform Electronic Transactions Act (MUETA)
Category: Legal

MUETA is codified as Mass. Gen. L. ch. 110G. An electronic version of the law is available at: http://www.mass.gov/legis/laws/mgl/110g-2.htm.

Similar to the Electronic Signatures in Global and National Commerce Act ("E-SIGN2", a federal law discussed in Question 10), The Massachusetts Uniform Electronic Transactions Act was enacted for the purpose of encouraging the use of electronic commerce in business, commercial, government activities throughout the Commonwealth. Under its terms, MUETA validates the use of "electronic signatures" or "records" in "transactions" involving two or more persons. In addition, MUETA validates the use of electronic signatures, contract or records in government activities that are not considered "transactions" under the Act. Such non-transactional activities by government agencies are considered in Question 8 of this release.

MUETA does not determine whether or not a valid electronic signature or record has LEGAL effect, but instead defers to existing law for the legal implications of such signatures or records. Absent the exemptions discussed in Question 4, MUETA ensures that electronic signatures and records have the SAME effect as their paper based versions under existing law. Although MUETA does not determine the legal consequences for VALID electronic signatures or records, MUETA does provide minimum threshold requirements which determine whether or not an electronic signature or record is valid for the purposes of MUETA. Such threshold requirements are addressed in Question 9 of this release.

In addition, MUETA does not apply to any transaction governed under the Massachusetts version of the UCC (Chapter 106 of Mass. Gen. Laws) except that MUETA provides electronic signatures and records as valid alternatives to the paper requirements found in sections 1-107 (involving written waivers), 1-206 (involving statute of frauds) and section 2 and section 2A (involving sales and lease contracts) of the Massachusetts UCC.

Under Section 2 of the Act, an "electronic signature" is defined as "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."

While MUETA covers actions by two or more parties, it does not usually cover unilateral actions undertaken by one person or entity which affects another person or entity. Where there is no interaction between a party and some other actor, MUETA normally does not apply. But MUETA would apply if one of the parties is a government entity. While most of MUETA deals with electronic signatures, contracts or records in the transactional setting, Sections 17 and 18 of the Act, which apply exclusively to government, implicitly make MUETA applicable to non-transactional government activities.

1. Authentication. A threshold question in designing any electronic signature or record process is the identification of the person creating the signature or record, which is referred to as "authentication" in the information technology world. Under Section 9 of the Act, MUETA states that "an electronic record or electronic signature is attributable to a person if it was the act of the person", and that "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 was attributable". This means that an agency seeking to create a legally valid electronic signature must be able to prove the identity of the person creating the signature or record and that this proof can be provided in the form of records of the security system used to identify individuals approaching an electronic transaction. The agency must employ a technology that accounts for such an authentication process.
2. Capturing the Individual’s Intent. Under Section 9 of the Act, an electronic record or signature is attributable to a person if it was the act of the person. MUETA’s emphasis on the "act" of the person signing or creating an electronic record highlights the importance of developing electronic forms that capture the intent of the authenticated individual with respect to the electronic signature or records. MUETA states that "the effect of an electronic record or electronic signature attributed to a person . . . is 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. " It must be clear from the electronic documents created or signed in connection with a government transaction that it is the intent of the signor to sign or the record creator to create the record. The agency should avoid providing electronic signatures on confusing web pages presented to citizens, businesses, or other government entities in connection with online government transactions that fail to clearly indicate to such persons that they are creating or signing an official electronic record. Such signatures will fail to meet MUETA requirements for a valid electronic signature.
3. Binding the electronic signature to the document. While traditional signatures are of necessity embedded in the paper on which they are written, an electronic signature is not necessarily so connected. Under MUETA, it is not sufficient for an agency to provide an opportunity to citizens and businesses to create an electronically signed record; the signature must be associated with the electronic record in some way. MUETA highlights this issue in its provisions regarding electronic notarization. In that provision, the MUETA states that "[I]f 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." By the same token, electronic signatures, as well as notarization material, must be attached to or logically associated with the relevant record. An agency must ensure that the technology it employs links and/or displays electronic signatures with their associated records.
4. Document Integrity. Under Section 12 of the Act, MUETA requires that electronic records subject to records retention requirements must be retained in a manner that accurately reflect the information set forth in the record after it was first generated in its final form as an electronic record or otherwise. An agency should employ a technology which "memorializes" the transaction and provides for a record storage and archival process.

Prior to the enactment of MUETA, the Commonwealth was subject to the federal E-SIGN law which validates the use of electronic signatures, contracts and other records in transactions that relate to the conduct of business, consumer or commercial affairs between two or more persons. E-SIGN preempts any state law which is contrary to its provisions. However, E-SIGN allows states to replace E-SIGN’s central validating provision (Section 7001 (a)-(b) of E-SIGN), if the states adopt as law the National Conference of Commissioners on Uniform State Laws ("NCCUSL") version of UETA. Because the MUETA appears to be similar enough to the NCCUSL version of UETA to pass the reverse preemption test set forth in E-SIGN, it effectively replaces section 7001 (a)-(b) of E-SIGN.

As discussed above, MUETA provides broader guidance for the use of electronic signatures and records by government agencies in their transactions with respective citizens of the Commonwealth. Unlike E-SIGN, which did not cover transactions involving government affairs, MUETA explicitly includes such transactions, in addition to non-transactional government activities under its provisions. Moreover, as discussed in Question 19, MUETA explicitly includes provisions which address an agency’s use of electronic signatures, contracts or records to meet its recordkeeping and retention requirements under existing law.

An agency should note that although most transactions it typically engages in will be covered or exempted under MUETA, E-SIGN may govern transactions not specifically addressed in Section 7001 (a)-(b). For instance, transactions involving consumers will be governed by the consumer disclosure provisions in Section 7001(c) of E-SIGN. Consumer transactions are dealings where the consumer obtains products or services from an agency, which are primarily used for personal, family or household purposes. If an agency engages in such market transactions (such as the sale of real estate, or the making of personal loans), it must follow the provisions of Section 7001(c) of E-SIGN.₃

An agency should note that like E-SIGN, MUETA is a technology-neutral statute. MUETA does not require an agency to adopt a particular technology in order to receive the benefit of its provisions. Instead, MUETA requires that agencies (1) implement electronic signatures and records that meet minimum threshold standards for validity (as discussed in Question 9 and (2) comply with any additional standards that are adopted by an agency’s relevant governing board or division for the use of electronic signatures, contracts and records.

The Supervisor of Records has issued several bulletins regarding the use of electronic public records. An agency should assume that any electronic records discussed in the SPR Bulletins are valid electronic records for MUETA purposes. The SPR Bulletins are available at: http://www.state.ma.us/sec/arc/arcrmu/rmubul/bulidx.htm.

1. SPR 1-99 (Electronic Mail) – if the agency uses email as electronic records, it must retain copies of received or created by a government employee since they are public records. Any contextual data (mailing address, routing info) must additionally be retained. Email systems must retain metadata. In addition, to meet record retention requirements, an agency must PRINT OUT email files and STORE as paper records. If the email records are too large, the agency must store electronically any such emails in an agency’s electronic storage system.
2. SPR 1-92 (Facsimile Transactions) – if the agency uses faxes as electronic records, it must retain copies of such faxes on plain paper since such faxes are public record

The Records Conservation Board has also released standards on the retention of electronic records. The RCB standards are available at: http://www.state.ma.us/sec/arc/arcrmu/rmuidx.htm. Currently, the RCB has issued the following electronic record retention standards:

If the agency falls under the Commonwealth’s Executive Department, it should also review any electronic records standards adopted by the ITD. ITD’s standards are available at: http://www.state.ma.us/itd/spg/publications/standards/index.htm.

The SPR, RCB and ITD have not currently released any technology requirements for valid electronic signatures and contracts (although, as noted above, ITD defers to the Comptroller’s decision not to accept electronic signatures and contracts). Agencies should choose electronic signatures that are appropriate given the context in which they will be used. Issues that an agency should consider in choosing an appropriate technology process are considered in the next question.

An agency should note that no technology process will completely protect an agency’s electronic transactions. An agency should consult with ITD and other similarly situated government agencies for more information on applicable technologies used to create, maintain and preserve electronic signatures, contracts and records.

In an automated transaction4 setting, an individual involved in such an automated transaction may avoid the effect of an erroneous record, if the electronic agent (for example, a web server) did not provide an opportunity for the individual to prevent or correct the erroneous record and the individual (1) promptly notifies the other person of the error, and the individual’s intention not to be bound by the erroneous record, and (2) takes reasonable steps (including steps that conform to the other person’s reasonable instructions) to return or destroy (at the other person’s instruction) any consideration received as a result of the erroneous record.

An agency should be mindful of any statutory or regulatory rules that require the agency, citizens or businesses to take certain acts within specified time periods. For example, a citizen against whom a decision has been rendered by an agency may have only so many days to file an appeal with the agency. Electronic systems created by state agencies after MUETA’s effective date must preserve existing statutory and regulatory timeframes for agency transactions in a manner consistent with Section 15 of MUETA, which governs when the sending or receipt of a document involved in an electronic transaction will be deemed to have occurred.

Section 15(g) also provides that if a person is aware that an electronic record that was purportedly sent or received under the section’s provisions, but was not actually received sent or received, the legal effect of the sending or receipt will not be governed by MUETA, but by other existing law.5

State and local agencies are subject to recordkeeping obligations under the Commonwealth’s Records Conservation Law, Mass. Gen. L. ch. 30, sec. 42. Under Section 12(d) and 12(f) of MUETA, agencies can now meet their statutory recordkeeping obligations, as well as their obligations to keep records for evidentiary, audit or like purposes, by retaining electronic public records as opposed to paper ones, even where state law, regulation or policy requires that a record be retained in its original form and the original record is not electronic. 

An agency should note that although the governing bodies mentioned above can impose additional recordkeeping requirements for electronic records, such bodies cannot re-impose pre-MUETA mandatory PAPER recordkeeping requirements.6

As discussed earlier, MUETA is a procedural rather than substantive statute; it does not prescribe the legal consequences of any electronic signature, contract or records. Under Section 3(d) of the Act, any transaction to which MUETA applies may be subject to other applicable substantive law. An agency should be mindful of how transaction to which MUETA applies affects any substantive law or regulatory rule that normally governs such agency’s transaction.7 In addition, an agency should ensure that implementing an electronic signature, contract or record system does not circumvent any of the state’s existing privacy laws.

Section 8 divides substantive disclosure laws into two camps: (1) laws that require written disclosure from one party to another party in a transaction, and (2) laws that require records to be posted or displayed in a certain manner. Under the first category of disclosure laws, MUETA deems that the law is satisfied if the parties agree to a transaction by electronic means, and the required written disclosure is sent electronically to the required party under the disclosure law. The law will not be satisfied if the required party can not retain the electronic record; a record is not capable of retention if the sender or its information processing system inhibits the required party from printing or storing the record.

A: Today both the State and Federal courts deal with the introduction of electronic evidence. Lawyers representing your agency will have to comply with the relevant rules of evidence and procedural rules regarding the transfer of adjudicative records from the agencies to the courts.

MUETA leaves that question up to the person collecting the signature. Any electronic signature method that the person collecting the signature wants to use is legally valid under MUETA if (1) it’s not exempted from MUETA; (2) the signor is authenticated; (3) the process captures the signor’s intent; (4) the signature is attached to or logically associated with that which is signed and (5) the integrity of the electronic record is preserved.

Absent Federal law, or Massachusetts law enacted post-UETA, to the contrary, an agency:

First, the 1999 NCCUSL version of UETA includes excellent notes explaining in detail the meaning of its provisions. The NCCUSL version of UETA, with commentary, is available online at http://www.law.upenn.edu/bll/ulc/fnact99/1990s/ueta99.htm. Although not precedential, the NCCUSL commentary will no doubt be persuasive to courts interpreting the impact of UETA on public sector entities.

Third, the Federal Government Paperwork Elimination Act ("GPEA"), Pub. L. No. 105-277, §§1701-1710 (1998) (codified as 44 U.S.C.A. § 3504 n. (West Supp. 1999)),which validated electronic signatures, contracts and other records used by the Federal Government, has been the subject of numerous Federal government policy statements which are helpful to public sector agencies seeking to adopt electronic processes. The best such publication is the Office of Management and Budget’s Legal Considerations in Designing and Implementing Electronic Processes, A Guide for Federal Agencies, available online at http://www.usdoj.gov/criminal/cybercrime/eprocess.htm.

Agencies should also contact: Linda Hamel, General Counsel for the Information Technology Division (ITD), (617) 626-4404. linda.hamel@state.ma.us for any additional requests for resources or any more specific questions regarding MUETA.

1 John Lee, Harvard Law School ’05, made a significant contribution to the drafting of this FAQ

2 A full text of the E-SIGN law is available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_public_laws&docid=f:publ229.106. Cite as: P.L. 106-229, 15 U.S.C.A. s. 7001 et seq.

3 Such consumer disclosures may also be subject to MUETA disclosure requirements (which are discussed in Question 20) if MUETA disclosure requirements are not contrary to or narrow the scope of E-SIGN’s consumer disclosure law.

4 MUETA defines an automated transaction as "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." An agency in deciding on whether to implement electronic transactions for its specific needs, should also consider the option of implementing automated transactions since such transactions are covered by MUETA’s provisions.

5 In addition, Section 15 states that unless otherwise agreed to, an electronic record is deemed to be sent from a sender’s place of business (or residence, if the sender has no business) and is deemed to be received by a recipient’s place of business (or residence, if the recipient has no business). If the sender or recipient has more than 1 place of business, the place of business for such sender or recipient is the place having the closest relationship to the underlying transaction.

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