2 New Laws Will Make Contracting on Net Easier

With so much of the state government’s energies focused on the year 2000 computer problem, 1999 was a slow year for Internet-related legislation in California.

State officials said there are only two new laws that took effect Saturday that will have much impact on Internet users, and both pertain to contracts entered into over the Internet.

State law has traditionally required personal signatures on many contracts and other legal documents for them to be considered enforceable. But that has become something of an outdated notion in the digital age.

The Uniform Electronic Transactions Act makes online agreements as binding as any offline contract, and allows so-called digital signatures to substitute for physical signatures. However, the law does not apply to wills, testamentary trusts and a handful of other contracts.

A separate but similar law eliminates the need for physical signatures by consumers starting accounts with stockbrokers. As of Saturday, an online application accompanied by some sort of digital verification “shall be deemed to be a valid contract,” according to the law.

State officials said the two laws eliminate loopholes that in some cases enabled consumers to back out of otherwise legitimate contracts simply because the transactions took place online.