As Amended by Senate Committee
Session of 2000
By Committee on Judiciary

10             AN  ACT concerning electronic transfers; repealing K.S.A. 1999 Supp.
11             60-2616
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. This act shall be known and may be cited as the uniform
15       electronic transactions act.
16             Sec.  2. In this act:
17             (1) ``Agreement'' means the bargain of the parties in fact, as found in
18       their language or inferred from other circumstances and from rules, reg-
19       ulations, and procedures given the effect of agreements under laws oth-
20       erwise applicable to a particular transaction.
21             (2) ``Automated transaction'' means a transaction conducted or per-
22       formed, in whole or in part, by electronic means or electronic records, in
23       which the acts or records of one or both parties are not reviewed by an
24       individual in the ordinary course in forming a contract, performing under
25       an existing contract or fulfilling an obligation required by the transaction.
26             (3) ``Computer program'' means a set of statements or instructions to
27       be used directly or indirectly in an information processing system in order
28       to bring about a certain result.
29             (4) ``Contract'' means the total legal obligation resulting from the par-
30       ties' agreement as affected by this act and other applicable law.
31             (5) ``Electronic'' means relating to technology having electrical, dig-
32       ital, magnetic, wireless, optical, electromagnetic or similar capabilities.
33             (6) ``Electronic agent'' means a computer program or an electronic
34       or other automated means used independently to initiate an action or
35       respond to electronic records or performances in whole or in part, without
36       review or action by an individual.
37             (7) ``Electronic record'' means a record created, generated, sent,
38       communicated, received or stored by electronic means.
39             (8) ``Electronic signature'' means an electronic sound, symbol or pro-
40       cess attached to or logically associated with a record and executed or
41       adopted by a person with the intent to sign the record.
42             (9) ``Governmental agency'' means an executive, legislative, or judicial
43       agency, department, board, commission, authority, institution or instru-


  1       mentality of the federal government or of a state or of a county, munic-
  2       ipality or other political subdivision of a state.
  3             (10) ``Information'' means data, text, images, sounds, codes, com-
  4       puter programs, software, databases or the like.
  5             (11) ``Information processing system'' means an electronic system for
  6       creating, generating, sending, receiving, storing, displaying or processing
  7       information.
  8             (12) ``Person'' means an individual, corporation, business trust, estate,
  9       trust, partnership, limited liability company, association, joint venture,
10       governmental agency, public corporation or any other legal or commercial
11       entity.
12             (13) ``Record'' means information that is inscribed on a tangible me-
13       dium or that is stored in an electronic or other medium and is retrievable
14       in perceivable form.
15             (14) ``Security procedure'' means a procedure employed for the pur-
16       pose of verifying that an electronic signature, record or performance is
17       that of a specific person or for detecting changes or errors in the infor-
18       mation in an electronic record. The term includes a procedure that re-
19       quires the use of algorithms or other codes, identifying words or numbers,
20       encryption, callback or other acknowledgment procedures.
21             (15) ``State'' means a state of the United States, the District of Co-
22       lumbia, Puerto Rico, the United States Virgin Islands or any territory or
23       insular possession subject to the jurisdiction of the United States. The
24       term includes an Indian tribe or band, or Alaskan native village, which is
25       recognized by federal law or formally acknowledged by a state.
26             (16) ``Transaction'' means an action or set of actions occurring be-
27       tween two or more persons relating to the conduct of business, commer-
28       cial or governmental affairs.
29             Sec.  3. (a) Except as otherwise provided in subsection (b), this act
30       applies to electronic records and electronic signatures relating to a
31       transaction.
32             (b) This act does not apply to a transaction to the extent it is governed
33       by:
34             (1) A law governing the creation and execution of wills, codicils or
35       testamentary trusts; and
36             (2) the uniform commercial code, other than K.S.A. 84-1-107 and 84-
37       1-206 and articles 2 and 2a of chapter 84 of the Kansas Statutes Anno-
38       tated, and amendments thereto.
39             (c) This act applies to an electronic record or electronic signature
40       otherwise excluded from the application of this act under subsection (b)
41       to the extent it is governed by a law other than those specified in subsec-
42       tion (b).
43             (d) A transaction subject to this act is also subject to other applicable


  1       substantive law.
  2             Sec.  4. This act applies to any electronic record or electronic signa-
  3       ture created, generated, sent, communicated, received or stored on or
  4       after the effective date of this act.
  5             Sec.  5. (a) This act does not require a record or signature to be cre-
  6       ated, generated, sent, communicated, received, stored or otherwise proc-
  7       essed or used by electronic means or in electronic form.
  8             (b) This act applies only to transactions between parties each of which
  9       has agreed to conduct transactions by electronic means. Whether the
10       parties agree to conduct a transaction by electronic means is determined
11       from the context and surrounding circumstances, including the parties'
12       conduct.
13             (c) A party that agrees to conduct a transaction by electronic means
14       may refuse to conduct other transactions by electronic means. The right
15       granted by this subsection may not be waived by agreement.
16             (d) Except as otherwise provided in this act, the effect of any of its
17       provisions may be varied by agreement. The presence in certain provi-
18       sions of this act of the words ``unless otherwise agreed'', or words of
19       similar import, does not imply that the effect of other provisions may not
20       be varied by agreement.
21             (e) Whether an electronic record or electronic signature has legal
22       consequences is determined by this act and other applicable law.
23             Sec.  6. This act must be construed and applied:
24             (a) To facilitate electronic transactions consistent with other appli-
25       cable law;
26             (b) to be consistent with reasonable practices concerning electronic
27       transactions and with the continued expansion of those practices; and
28             (c) to effectuate its general purpose to make uniform the law with
29       respect to the subject of this act among states enacting it.
30             Sec.  7. (a) A record or signature may not be denied legal effect or
31       enforceability solely because it is in electronic form.
32             (b) A contract may not be denied legal effect or enforceability solely
33       because an electronic record was used in its formation.
34             (c) If a law requires a record to be in writing, an electronic record
35       satisfies the law.
36             (d) If a law requires a signature, an electronic signature satisfies the
37       law.
38             Sec.  8. (a) If parties have agreed to conduct a transaction by elec-
39       tronic means and a law requires a person to provide, send or deliver
40       information in writing to another person, the requirements is satisfied if
41       the information is provided, sent or delivered, as the case may be, in an
42       electronic record capable of retention by the recipient at the time of
43       receipt. An electronic record is not capable of retention by the recipient


  1       if the sender or its information processing system inhibits the ability of
  2       the recipient to print or store the electronic record.
  3             (b) If a law other than this act requires a record (1) to be posted or
  4       displayed in a certain manner, (2) to be sent, communicated or transmit-
  5       ted by a specified method, or (3) to contain information that is formatted
  6       in a certain manner, the following rules apply:
  7             (A) The record must be posted or displayed in the manner specified
  8       in the other law.
  9             (B) Except as otherwise provided in subsection (d)(2), the record
10       must be sent, communicated or transmitted by the method specified in
11       the other law.
12             (C) The record must contain the information formatted in the man-
13       ner specified in the other law.
14             (c) If a sender inhibits the ability of a recipient to store or print an
15       electronic record, the electronic record is not enforceable against the
16       recipient.
17             (d) The requirements of this section may not be varied by agreement,
18       but:
19             (1) To the extent a law other than this act requires information to be
20       provided, sent or delivered in writing but permits that requirement to be
21       varied by agreement, the requirement under subsection (a) that the in-
22       formation be in the form of an electronic record capable of retention also
23       may be varied by agreement; and
24             (2) a requirement under a law other than this act to send, commu-
25       nicate or transmit a record by first-class mail, may be varied by agreement
26       to the extent permitted by the other law.
27             Sec.  9. (a) An electronic record or electronic signature is attributable
28       to a person if it was the act of the person. The act of the person may be
29       shown in any manner, including a showing of the efficacy of any security
30       procedure applied to determine the person to which the electronic record
31       or electronic signature was attributable.
32             (b) The effect of an electronic record or electronic signature attrib-
33       uted to a person under subsection (a) is determined from the context and
34       surrounding circumstances at the time of its creation, execution or adop-
35       tion, including the parties' agreement, if any, and otherwise as provided
36       by law.
37             Sec.  10. If a change or error in an electronic record occurs in a trans-
38       mission between parties to a transaction, the following rules apply:
39             (a) If the parties have agreed to use a security procedure to detect
40       changes or errors and one party has conformed to the procedure, but the
41       other party has not, and the nonconforming party would have detected
42       the change or error had that party also conformed, the conforming party
43       may avoid the effect of the changed or erroneous electronic record.


  1             (b) In an automated transaction involving an individual, the individual
  2       may avoid the effect of an electronic record that resulted from an error
  3       made by the individual in dealing with the electronic agent of another
  4       person if the electronic agent did not provide an opportunity for the
  5       prevention or correction of the error and, at the time the individual learns
  6       of the error, the individual:
  7             (1) Promptly notifies the other person of the error and that the in-
  8       dividual did not intend to be bound by the electronic record received by
  9       the other person;
10             (2) takes reasonable steps, including steps that conform to the other
11       person's reasonable instruction, to return to the other person or, if in-
12       structed by the other person, to destroy the consideration received, if any,
13       as a result of the erroneous electronic record; and
14             (3) has not used or received any benefit or value from the consider-
15       ation, if any, received from the other person.
16             (c) If neither paragraph (a) nor paragraph (b) applies, the change or
17       error has the effect provided by other law, including the law of mistake,
18       and the parties' contract, if any.
19             (d) Paragraphs (b) and (c) may not be varied by agreement.
20             Sec.  11. If a law requires a signature or record to be notarized, ac-
21       knowledged, verified or made under oath, the requirement is satisfied if
22       the electronic signature of the person authorized to perform those acts,
23       together with all other information required to be included by other ap-
24       plicable law, is attached to or logically associated with the signature or
25       record.
26             Sec.  12. (a) If a law requires that a record be retained, the require-
27       ment is satisfied by retaining an electronic record of the information in
28       the record which:
29             (1) Accurately reflects the information set forth in the record after it
30       was first generated in its final form as an electronic record or otherwise;
31       and
32             (2) remains accessible for later reference.
33             (b) A requirement to retain a record in accordance with subsection
34       (a) does not apply to any information the sole purpose of which is to
35       enable the record to be sent, communicated or received.
36             (c) A person may satisfy subsection (a) by using the services of an-
37       other person if the requirements of that subsection are satisfied.
38             (d) If a law requires a record to be presented or retained in its original
39       form, or provides consequences if the record is not presented or retained
40       in its original form, that law is satisfied by an electronic record retained
41       in accordance with subsection (a).
42             (e) If a law requires retention of a check, that requirement is satisfied
43       by retention of an electronic record of the information on the front and


  1       back of the check in accordance with subsection (a).
  2             (f) A record retained as an electronic record in accordance with sub-
  3       section (a) satisfies a law requiring a person to retain a record for eviden-
  4       tiary, audit or like purposes, unless a law enacted after the effective date
  5       of this act specifically prohibits the use of an electronic record for the
  6       specified purpose.
  7             (g) This section does not preclude a governmental agency of this state
  8       from specifying additional requirements for the retention of a record
  9       subject to the agency's jurisdiction.
10             Sec.  13. In a proceeding, evidence of a record or signature may not
11       be excluded solely because it is in electronic form.
12             Sec. 14. In an automated transaction, the following rules apply:
13             (a) A contract may be formed by the interaction of electronic agents
14       of the parties, even if no individual was aware of or reviewed the elec-
15       tronic agents' actions or the resulting terms and agreements.
16             (b) A contract may be formed by the interaction of an electronic agent
17       and an individual, acting on the individual's own behalf or for another
18       person, including by an interaction in which the individual performs ac-
19       tions that the individual is free to refuse to perform and which the indi-
20       vidual knows or has reason to know will cause the electronic agent to
21       complete the transaction or performance.
22             (c) The terms of the contract are determined by the substantive law
23       applicable to it.
24             Sec.  15. (a) Unless otherwise agreed between the sender and the
25       recipient, an electronic record is sent when it:
26             (1) Is addressed properly or otherwise directed properly to an infor-
27       mation processing system that the recipient has designated or uses for
28       the purpose of receiving electronic records or information of the type
29       sent and from which the recipient is able to retrieve the electronic record;
30             (2) is in a form capable of being processed by that system; and
31             (3) enters an information processing system outside the control of
32       the sender or of a person that sent the electronic record on behalf of the
33       sender or enters a region of the information processing system designated
34       or used by the recipient which is under the control of the recipient.
35             (b) Unless otherwise agreed between a sender and the recipient, an
36       electronic record is received when:
37             (1) It enters an information processing system that the recipient has
38       designated or uses for the purpose of receiving electronic records or in-
39       formation of the type sent and from which the recipient is able to retrieve
40       the electronic record; and
41             (2) it is in a form capable of being processed by that system.
42             (c) Subsection (b) applies even if the place the information processing
43       system is located is different from the place the electronic record is


  1       deemed to be received under subsection (d).
  2             (d) Unless otherwise expressly provided in the electronic record or
  3       agreed between the sender and the recipient, an electronic record is
  4       deemed to be sent from the sender's place of business and to be received
  5       at the recipient's place of business. For purposes of this subsection, the
  6       following rules apply:
  7             (1) If the sender or recipient has more than one place of business,
  8       the place of business of that person is the place having the closest rela-
  9       tionship to the underlying transaction.
10             (2) If the sender or the recipient does not have a place of business,
11       the place of business is the sender's or recipient's residence, as the case
12       may be.
13             (e) An electronic record is received under subsection (b) even if no
14       individual is aware of its receipt.
15             (f) Receipt of an electronic acknowledgment from an information
16       processing system described in subsection (b) establishes that a record
17       was received but, by itself, does not establish that the content sent cor-
18       responds to the content received.
19             (g) If a person is aware that an electronic record purportedly sent
20       under subsection (a), or purportedly received under subsection (b), was
21       not actually sent or received, the legal effect of the sending or receipt is
22       determined by other applicable law. Except to the extent permitted by
23       the other law, the requirements of this subsection may not be varied by
24       agreement.
25             Sec.  16. (a) In this section, ``transferable record'' means an electronic
26       record that:
27             (1) Would be a note under article 3 of chapter 84 of the Kansas
28       Statutes Annotated, and amendments thereto or a document under article
29       7 of chapter 84 of the Kansas Statutes Annotated, and amendments
30       thereto if the electronic record were in writing; and
31             (2) the issuer of the electronic record expressly has agreed is a trans-
32       ferable record.
33             (b) A person has control of a transferable record if a system employed
34       for evidencing the transfer of interests in the transferable record reliably
35       establishes that person as the person to which the transferable record was
36       issued or transferred.
37             (c) A system satisfies subsection (b), and a person is deemed to have
38       control of a transferable record, if the transferable record is created,
39       stored and assigned in such a manner that:
40             (1) A single authoritative copy of the transferable record exists which
41       is unique, identifiable, and, except as otherwise provided in paragraphs
42       (4), (5) and (6), unalterable;
43             (2) the authoritative copy identifies the person asserting control as:


  1             (A) The person to which the transferable record was issued; or
  2             (B) if the authoritative copy indicates that the transferable record has
  3       been transferred, the person to which the transferable record was most
  4       recently transferred;
  5             (3) the authoritative copy is communicated to and maintained by the
  6       person asserting control or its designated custodian;
  7             (4) copies or revisions that add or change an identified assignee of
  8       the authoritative copy can be made only with the consent of the person
  9       asserting control;
10             (5) each copy of the authoritative copy and any copy of a copy is
11       readily identifiable as a copy that is not the authoritative copy; and
12             (6) any revision of the authoritative copy is readily identifiable as au-
13       thorized or unauthorized.
14             (d) Except as otherwise agreed, a person having control of a trans-
15       ferable record is the holder, as defined in K.S.A. 84-1-201(20), and
16       amendments thereto, of the transferable record and has the same rights
17       and defenses as a holder of an equivalent record or writing under the
18       uniform commercial code, including, if the applicable statutory require-
19       ments under K.S.A. 84-3-302(a), 84-7-501, or 84-9-308, and amendments
20       thereto are satisfied, the rights and defenses of a holder in due course, a
21       holder to which a negotiable document of title has been duly negotiated,
22       or a purchaser, respectively. Delivery, possession, and indorsement are
23       not required to obtain or exercise any of the rights under this subsection.
24             (e) Except as otherwise agreed, an obligor under a transferable rec-
25       ord has the same rights and defenses as an equivalent obligor under equiv-
26       alent records or writings under the uniform commercial code.
27             (f) If requested by a person against which enforcement is sought, the
28       person seeking to enforce the transferable record shall provide reasonable
29       proof that the person is in control of the transferable record. Proof may
30       include access to the authoritative copy of the transferable record and
31       related business records sufficient to review the terms of the transferable
32       record and to establish the identity of the person having control of the
33       transferable record.
34             Sec.  17. The secretary of administration shall determine whether,
35       and the extent to which, governmental agencies will create and retain
36       electronic records and convert written records to electronic records.
37             Sec.  18. (a) Except as otherwise provided in subsection (f) of section
38       12, and amendments thereto, the secretary of administration shall deter-
39       mine whether, and the extent to which, a governmental agency will send
40       and accept electronic records and electronic signatures to and from other
41       persons and otherwise create, generate, communicate, store, process, use
42       and rely upon electronic records and electronic signatures.
43             (b) To the extent that a governmental agency uses electronic records


  1       and electronic signatures under subsection (a), the secretary, giving due
  2       consideration to security, may specify:
  3             (1) The manner and format in which the electronic records must be
  4       created, generated, sent, communicated, received and stored and the sys-
  5       tems established for those purposes;
  6             (2) if electronic records must be signed by electronic means, the type
  7       of electronic signature required, the manner and format in which the
  8       electronic signature must be affixed to the electronic record, and the
  9       identity of, or criteria that must be met by, any third party used by a
10       person filing a document to facilitate the process;
11             (3) control processes and procedures as appropriate to ensure ade-
12       quate preservation, disposition, integrity, security, confidentiality and au-
13       ditability of electronic records; and
14             (4) any other required attributes for electronic records which are
15       specified for corresponding nonelectronic records or reasonably neces-
16       sary under the circumstances.
17             (c) Except as otherwise provided in subsection (f) of section 12, and
18       amendments thereto, this act does not require a governmental agency of
19       this state to use or permit the use of electronic records or electronic
20       signatures.
21             Sec.  19. The secretary of administration who adopts standards pur-
22       suant to section 18 and amendments thereto may encourage and promote
23       consistency and interoperability with similar requirements adopted by
24       other governmental agencies of this and other states and the federal gov-
25       ernment and nongovernmental persons interacting with governmental
26       agencies of this state. If appropriate, those standards may specify differing
27       levels of standards from which governmental agencies of this state may
28       choose in implementing the most appropriate standard for a particular
29       application.
30             Sec.  20. 17. If any provision of this act or its application to any person
31       or circumstance is held invalid, the invalidity does not affect other pro-
32       visions or applications of this act which can be given effect without the
33       invalid provision or application, and to this end the provisions of this act
34       are severable. 
35       Sec.  21. 18. K.S.A. 1999 Supp. 60-2616 is hereby repealed.
36        Sec.  22. 19. This act shall take effect and be in force from and after
37       its publication in the statute book.