Page 17: of Maritime Reporter Magazine (October 2000)

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Maritime Records and Contracts: Electronically Signed, Sealed, Delivered and Maintained?

Is there an electronic Oil Record Book in the future of the maritime industry?

There could be. Will charters be negoti- ated and signed electronically? They can be, but they do not have to be. Will the new rules of electronic signatures and electronic record keeping change the maritime industry? Most certainly.

Are the new rules simple to apply? Not at all.

The rapidly accelerating use of elec- tronic commerce in all industries demands changes in the traditional "paper and pen" foundation of legal documents. The "high tech" community has been a strong proponent of the need for change for several years. Initially their efforts focused solely on electronic signatures. More recently, the accep- tance of electronic records was added to the list of demands, a change that brought an explosion in the scope and potential impact of this proposal.

Electronic Signatures Are Now Valid

Thanks to the recently enacted Elec- tronic Signatures in Global and Nation- al Commerce Act ("E-SIGN"), electron- ic signatures can be considered valid and binding evidence of commitment to a legal obligation. E-SIGN creates a legal "floor" for the recognition of elec- tronic signatures. States can no longer require that contracts and other legal documents be written, signed, or in non- electronic form.

The use of electronic signatures is not mandatory, but state law can no longer discriminate against them. Notarization and acknowledgement of a signature can also be satisfied electronically.

Only the method of signing a docu- ment and forming a contract is affected.

All other rights and obligations under any applicable Federal or state law remain the same, including the Federal and state laws that prohibit unfair and deceptive acts and practices.

E-SIGN affects contracts and other legal documents between consumers, between businesses, and between busi- nesses and consumers It does not affect "governmental" transactions, such as an application for benefits, enforcement actions, etc.

Does This Mean A Paperless Future for the Maritime Industry?

No. First and foremost, the use of electronic signatures is not mandatory.

No party can be forced to accept an electronic signature.

Likewise, no party can be forced to insure a paperless transaction. The P& I

Clubs have already expressed consider- able reservations about insuring such transactions by excluding from cover- age participation in electronic trading and the carriage of good pursuant to a paperless contract of carriage.

Many people may take a "wait and see" attitude because of the many ques- tions raised by E-SIGN that remain unresolved. For example, the pre-emp- tion of state law relating to signatures can be avoided by a state that enacts, without change, the Uniform Electronic

Transactions Act ("UETA") adopted by the National Conference of Commis- sioners on Uniform State Laws. If a state adopts a statute, regulation or rule

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October, 2000 Circle 347 on Reader Service Card 17

Maritime Reporter

First published in 1881 Maritime Reporter is the world's largest audited circulation publication serving the global maritime industry.