Electronic Commerce Security Act P.A. 90-759

Effective July 1, 1999, the Electronic Commerce Security Act (Act) established a legal system that provides rules and regulations for implementing and promoting secure electronic commerce. 5 ILCS 175/1-101 et seq. By recognizing the legal effect, validity, and enforceability of electronic information or electronic records, the Act removes any existing legal barriers and uncertainties that prevented many from using electronic information as a method of conducting business. Not only do private businesses benefit, the Electronic Commerce Security Act also permits government agencies to send, receive, create, use, store, and rely on electronic records and electronic signatures. The Act is divided into four parts.

Part I
Article 5 deals with electronic records and electronic signatures. In addition to providing the necessary definitions for interpreting the Act, Article 5 ascribes the same legal powers paper records and signatures have to electronic records and electronic signatures regarding statutory writing and signature requirements, evidentiary requirements, and record keeping requirements. However, these powers are curbed in three situations. First, the provisions of the Act are not applicable to documents that are specifically required to be on paper by the manifest intent of the lawmaking body, if the intent is not based only on the mere requirement that the information be "in writing," "written," or "printed." Second, for the creation or execution of wills, trusts, living wills, or healthcare power of attorney forms, the Act is inapplicable because of the importance of ceremony and the necessity for "attestation to sobriety and mental capacity and lack of obvious compulsion provided by a third party witness." Illinois Attorney General Jim Ryan's Commission on Electronic Commerce and Crime, Final Report of the Commission on Electronic and Crime (May 26, 1998), § 5-115, cmt 7(b). Third, the Act excludes documents such as negotiable instruments and other instruments of title where the possession of the instrument is deemed to confer title. This is due to the present lack of available means to create a unique and transferable electronic record of rights and obligations. However, this exemption ceases when the technology is available to create, store, and transfer a record in a way that allows for the "existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and cannot be copied except in a form that is readily identifiable as a copy."

Part II
Article 10 deals with secure electronic records and signatures. For an electronic record or signature to be considered secure, Article 10 establishes that the record or signature be verified by a qualified security procedure that is:

 

  1. Commercially reasonable under the circumstances;
  2. Applied by the relying party in a trustworthy manner; and
  3. Reasonably and in good faith relied upon by the relying party.

The qualified security procedure is used to detect changes in the content of an electronic record or to verify that the signature is unique to the signer. Secure electronic records and signatures are legally similar to notarized documents because of their enhanced reliability and trustworthiness due to the qualified security procedure used in creating them. According to the drafters of the Act, this is critical in promoting and enabling electronic commerce. The heightened evidentiary presumptions of secure electronic records and signatures will encourage businesses to perform commercial transactions via e-mail or over the Internet because of the nonrepudiable nature of the secure records and signatures. Final Report, Overview, p. 9.

Part III
Articles 15 and 20 specifically target the effect of a digital signature, a form of electronic signature. A digital signature is a mathematical encryption of the electronic record that allows easy detection of alterations when the signature is matched up with a public key. R.J. Robertson, Jr. and Thomas J. Smedinghoff, Illinois Law Enters Cyberspace: The Electronic Commerce Security Act, 87 Ill B J 308, 312 (June 1999). These two articles define the qualifications for a secure electronic record and signature for a digital signature, establish the rules and restrictions for the creation, use, and reliance of certificates and digital signatures, and lay out the responsibilities of parties dealing with digital signatures.

Part IV
Article 25 expressly states the rules for state agencies in sending, receiving, accepting, and using electronic records and signatures.

The Electronic Commerce Security Act authorizes the Secretary of State to enforce the provisions of the Act and provides for parties to seek civil remedies for violations of the Act. The Statute on Statutes, Freedom of Information Act, State Comptroller Act, and the Criminal Code of 1961 were also amended with the passing of the Electronic Commerce Security Act in order to reflect the authority of electronic records and electronic signatures in Illinois law.

© ATG atgc1099vol23

 

Print this page