Written by Bart W. Howk

The Hawaii Uniform Electronic Transactions Act provides that (if certain requirements are met): (a) electronic records and signatures are enforceable even if in electronic form, (b) contracts are enforceable even if they were formed using an electronic record, and (c) electronic records and signatures satisfy laws requiring written records and signatures.

The Act applies to “transactions,” which the Act defines as actions between persons relating to the conduct of business, commercial, or governmental affairs.  The Act only applies when the parties agree to conduct transactions by electronic means, but prohibits parties from including that agreement in a standard form contract that is not itself an electronic record (unless the agreement is separate and optional).  Despite this seemingly strict requirement, the Act permits an agreement to be determined by the context and surrounding circumstances, including the parties’ conduct.

Since many contracts are now negotiated and delivered electronically, this Act is helpful in clarifying that physical signature pages need not be exchanged when the law requires a contract to be in writing (for example, a real-estate purchase contract).  But it is a double-edged sword, since it solidifies that contracts requiring a writing may be created in situations people might have previously considered informal, such as exchanging emails.