# Title 9 — Contracts and Obligations

## Chapter 9-16 — Electronic Transactions

### § 9-16-01. Definitions.

In this chapter:
1. "Agreement" means the bargain of the parties in fact, as found in the parties' language
or inferred from other circumstances and from rules and procedures given the effect of
agreements under laws otherwise applicable to a particular transaction.
2. "Automated transaction" means a transaction conducted or performed, in whole or in
part, by electronic means or electronic records, in which the acts or records of one or
both parties are not reviewed by an individual in the ordinary course in forming a
contract, performing under an existing contract, or fulfilling an obligation required by
the transaction.
3. "Computer program" means a set of statements or instructions to be used directly or
indirectly in an information processing system in order to bring about a certain result.
4. "Contract" means the total legal obligation resulting from the parties' agreement as
affected by this chapter and other applicable law.
5. "Electronic" means relating to technology having electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capabilities.
6. "Electronic agent" means a computer program or an electronic or other automated
means used independently to initiate an action or respond to electronic records or
performances, in whole or in part, without review or action by an individual.
7. "Electronic record" means a record created, generated, sent, communicated, received,
or stored by electronic means.
8. "Electronic signature" means an electronic sound, symbol, or process attached to or
logically associated with a record and executed or adopted by a person with the intent
to sign the record.
9. "Governmental agency" means an executive, legislative, or judicial agency,
department, board, commission, authority, institution, or instrumentality of the state.
10. "Information" means data, text, images, sounds, codes, computer programs, software,
databases, or the like.
11. "Information processing system" means an electronic system for creating, generating,
sending, receiving, storing, displaying, or processing information.
12. "Record" means information that is inscribed on a tangible medium or which is stored
in an electronic or other medium and is retrievable in perceivable form.
13. "Security procedure" means a procedure employed for the purpose of verifying that an
electronic signature, record, or performance is that of a specific person or for detecting
changes or errors in the information in an electronic record. The term includes a
procedure that requires the use of algorithms or other codes, identifying words or
numbers, encryption, or callback or other acknowledgment procedures.
14. "State" means a state of the United States, the District of Columbia, Puerto Rico, the
United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan
native village, which is recognized by federal law or formally acknowledged by a state.
15. "Transaction" means an action or set of actions occurring between two or more
persons relating to the conduct of business, commercial, or governmental affairs.
16. "Writing" or "written" includes blockchain technology as defined in section 9-16-19.
### § 9-16-02. Scope.

1. Except as otherwise provided in subsection 2 or 3, this chapter applies to electronic
records and electronic signatures relating to a transaction.
2. Except as provided in subsection 3, this chapter does not apply to a transaction to the
extent the transaction is governed by:
a. A law governing the creation and execution of wills, codicils, or testamentary
trusts;

b. The Uniform Commercial Code other than section 41-01-20 and chapters 41-02
and 41-02.1; and
c. Chapters 41-03, 41-04, 41-04.1, 41-05, 41-07, 41-08, or 41-09.
3. Section 9-16-19 applies only to title 10 and transactions governed by chapters 41-02,
41-02.1, and 41-07.
4. This chapter applies to an electronic record or electronic signature otherwise excluded
from the application of this chapter under subsection 2 or 3, to the extent it is governed
by a law other than those specified in subsection 2 or 3.
5. A transaction subject to this chapter is also subject to other applicable substantive law.
### § 9-16-03. Prospective application.

This chapter applies to any electronic record or electronic signature created, generated,
sent, communicated, received, or stored after July 31, 2001.
### § 9-16-04. Use of electronic records and electronic signatures - Variation by agreement.

1. This chapter does not require a record or signature to be created, generated, sent,
communicated, received, stored, or otherwise processed or used by electronic means
or in electronic form.
2. This chapter applies only to transactions between parties each of which has agreed to
conduct transactions by electronic means. Whether the parties agree to conduct
transactions by electronic means is determined from the context and surrounding
circumstances, including the parties' conduct.
3. If a party agrees to conduct a transaction by electronic means, this chapter does not
prohibit the party from refusing to conduct other transactions by electronic means. This
subsection may not be varied by agreement.
4. Except as otherwise provided in this chapter, the effect of any of this chapter's
provisions may be varied by agreement. The presence in certain provisions of this
chapter of the words "unless otherwise agreed", or words of similar import, does not
imply that the effect of other provisions may not be varied by agreement.
5. Whether an electronic record or electronic signature has legal consequences is
determined by this chapter and other applicable law.
### § 9-16-05. Construction and application.

This chapter must be construed and applied:
1. To facilitate electronic transactions consistent with other applicable law;
2. To be consistent with reasonable practices concerning electronic transactions and with
the continued expansion of those practices; and
3. To effectuate its general purpose to make uniform the law with respect to the subject of
this chapter among states enacting it.
### § 9-16-06. Legal recognition of electronic records, electronic signatures, and electronic

contracts.
1. A record or signature may not be denied legal effect or enforceability solely because
the record or signature is in electronic form.
2. A contract may not be denied legal effect or enforceability solely because an electronic
record was used in the contract's formation.
3. If a law requires a record to be in writing, an electronic record satisfies the law.
4. If a law requires a signature, an electronic signature satisfies the law.
### § 9-16-07. Provision of information in writing - Presentation of records.

1. If parties have agreed to conduct transactions by electronic means and a law requires
a person to provide, send, or deliver information in writing to another person, the
requirement is satisfied if the information is provided, sent, or delivered, as the case
may be, in an electronic record capable of retention by the recipient at the time of
receipt. An electronic record is not capable of retention by the recipient if the sender or

the sender's information processing system inhibits the ability of the recipient to print
or store the electronic record.
2. If a law other than this chapter requires a record to be posted or displayed in a certain
manner, to be sent, communicated, or transmitted by a specified method, or to contain
information that is formatted in a certain manner, the following rules apply:
a. The record must be posted or displayed in the manner specified in the other law.
b. Except as otherwise provided in subdivision b of subsection 4, the record must be
sent, communicated, or transmitted by the method specified in the other law.
c. The record must contain the information formatted in the manner specified in the
other law.
3. If a sender inhibits the ability of a recipient to store or print an electronic record, the
electronic record is not enforceable against the recipient.
4. The requirements of this section may not be varied by agreement, but:
a. To the extent a law other than this chapter requires information to be provided,
sent, or delivered in writing but permits that requirement to be varied by
agreement, the requirement under subsection 1 that the information be in the
form of an electronic record capable of retention may also be varied by
agreement; and
b. A requirement under a law other than this chapter to send, communicate, or
transmit a record by United States mail first-class postage prepaid may be varied
by agreement to the extent permitted by the other law.
### § 9-16-08. Attribution and effect of electronic record and electronic signature.

1. An electronic record or electronic signature is attributable to a person if it was the act
of the person. The act of the person may be shown in any manner, including a showing
of the efficacy of any security procedure applied to determine the person to which the
electronic record or electronic signature was attributable.
2. The effect of an electronic record or electronic signature attributed to a person under
subsection 1 is determined from the context and surrounding circumstances at the
time of the record's or signature's creation, execution, or adoption, including the
parties' agreement, if any, and otherwise as provided by law.
### § 9-16-09. Effect of change or error.

If a change or error in an electronic record occurs in a transmission between parties to a
transaction, the following rules apply:
1. If the parties have agreed to use a security procedure to detect changes or errors and
one party has conformed to the procedure, but the other party has not, and the
nonconforming party would have detected the change or error had that party also
conformed, the conforming party may avoid the effect of the changed or erroneous
electronic record.
2. In an automated transaction involving an individual, the individual may avoid the effect
of an electronic record that resulted from an error made by the individual in dealing
with the electronic agent of another person if the electronic agent did not provide an
opportunity for the prevention or correction of the error and, at the time the individual
learns of the error, the individual:
a. Promptly notifies the other person of the error and that the individual did not
intend to be bound by the electronic record received by the other person;
b. Takes reasonable steps, including steps that conform to the other person's
reasonable instructions, to return to the other person or, if instructed by the other
person, to destroy the consideration received, if any, as a result of the erroneous
electronic record; and
c. Has not used or received any benefit or value from the consideration, if any,
received from the other person.
3. If neither subsection 1 nor subsection 2 applies, the change or error has the effect
provided by other law, including the law of mistake, and the parties' contract, if any.
4. Subsections 2 and 3 may not be varied by agreement.

### § 9-16-10. Notarization and acknowledgment.

If a law requires a signature or record to be notarized, acknowledged, verified, or made
under oath, the requirement is satisfied if the electronic signature of the person authorized to
perform those acts, together with all other information required to be included by other
applicable law, is attached to or logically associated with the signature or record.
### § 9-16-11. Retention of electronic records - Originals.

1. If a law requires that a record be retained, the requirement is satisfied by retaining an
electronic record of the information in the record which:
a. Accurately reflects the information set forth in the record after it was first
generated in its final form as an electronic record or otherwise; and
b. Remains accessible for later reference.
2. A requirement to retain a record in accordance with subsection 1 does not apply to any
information the sole purpose of which is to enable the record to be sent,
communicated, or received.
3. A person may satisfy subsection 1 by using the services of another person if the
requirements of that subsection are satisfied.
4. If a law requires a record to be presented or retained in the record's original form, or
provides consequences if the record is not presented or retained in the record's
original form, that law is satisfied by an electronic record retained in accordance with
subsection 1.
5. If a law requires retention of a check, that requirement is satisfied by retention of an
electronic record of the information on the front and back of the check in accordance
with subsection 1.
6. A record retained as an electronic record in accordance with subsection 1 satisfies a
law requiring a person to retain a record for evidentiary, audit, or like purposes, unless
a law enacted after July 31, 2001, specifically prohibits the use of an electronic record
for the specified purpose.
7. This section does not preclude a governmental agency of this state from specifying
additional requirements for the retention of a record subject to the agency's
jurisdiction.
### § 9-16-12. Admissibility in evidence.

In a proceeding, evidence of a record or signature may not be excluded solely because it is
in electronic form.
### § 9-16-13. Automated transactions.

In an automated transaction, the following rules apply:
1. A contract may be formed by the interaction of electronic agents of the parties, even if
no individual was aware of or reviewed the electronic agents' actions or the resulting
terms and agreements.
2. A contract may be formed by the interaction of an electronic agent and an individual,
acting on the individual's own behalf or for another person, including by an interaction
in which the individual performs actions that the individual is free to refuse to perform
and which the individual knows or has reason to know will cause the electronic agent
to complete the transaction or performance.
3. The terms of the contract are determined by the substantive law applicable to the
contract.
### § 9-16-14. Time and place of sending and receipt.

1. Unless otherwise agreed between the sender and the recipient, an electronic record is
sent when the record:
a. Is addressed properly or otherwise directed properly to an information processing
system that the recipient has designated or uses for the purpose of receiving

electronic records or information of the type sent and from which the recipient is
able to retrieve the electronic record;
b. Is in a form capable of being processed by that system; and
c. Enters an information processing system outside the control of the sender or of a
person that sent the electronic record on behalf of the sender or enters a region
of the information processing system designated or used by the recipient which is
under the control of the recipient.
2. Unless otherwise agreed between a sender and the recipient, an electronic record is
received when:
a. The record enters an information processing system that the recipient has
designated or uses for the purpose of receiving electronic records or information
of the type sent and from which the recipient is able to retrieve the electronic
record; and
b. The record is in a form capable of being processed by that system.
3. Subsection 2 applies even if the place the information processing system is located is
different from the place the electronic record is deemed to be received under
subsection 4.
4. Unless otherwise expressly provided in the electronic record or agreed between the
sender and the recipient, an electronic record is deemed to be sent from the sender's
place of business and to be received at the recipient's place of business. For purposes
of this subsection:
a. If the sender or recipient has more than one place of business, the place of
business of that person is the place having the closest relationship to the
underlying transaction.
b. If the sender or the recipient does not have a place of business, the place of
business is the sender's or recipient's residence, as the case may be.
5. An electronic record is received under subsection 2 even if no individual is aware of
the record's receipt.
6. Receipt of an electronic acknowledgment from an information processing system
described in subsection 2 establishes that a record was received but, by itself, does
not establish that the content sent corresponds to the content received.
7. If a person is aware that an electronic record purportedly sent under subsection 1, or
purportedly received under subsection 2, was not actually sent or received, the legal
effect of the sending or receipt is determined by other applicable law. Except to the
extent permitted by the other law, this subsection may not be varied by agreement.
### § 9-16-15. Transferable records.

1. In this section, "transferable record" means an electronic record that:
a. Would be a note under chapter 41-03 or a document under chapter 41-07 if the
electronic record were in writing; and
b. The issuer of the electronic record expressly has agreed is a transferable record.
2. A person has control of a transferable record if a system employed for evidencing the
transfer of interests in the transferable record reliably establishes that person as the
person to which the transferable record was issued or transferred.
3. A system satisfies subsection 2, and a person is deemed to have control of a
transferable record, if the transferable record is created, stored, and assigned in such
a manner that:
a. A single authoritative copy of the transferable record exists which is unique,
identifiable, and, except as otherwise provided in subdivisions d, e, and f,
unalterable;
b. The authoritative copy identifies the person asserting control as:
(1) The person to which the transferable record was issued; or
(2) If the authoritative copy indicates that the transferable record has been
transferred, the person to which the transferable record was most recently
transferred;

c. The authoritative copy is communicated to and maintained by the person
asserting control or its designated custodian;
d. Copies or revisions that add or change an identified assignee of the authoritative
copy can be made only with the consent of the person asserting control;
e. Each copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy that is not the authoritative copy; and
f. Any revision of the authoritative copy is readily identifiable as authorized or
unauthorized.
4. Except as otherwise agreed, a person having control of a transferable record is the
holder, as defined in section 41-01-09, of the transferable record and has the same
rights and defenses as a holder of an equivalent record or writing under title 41,
including, if the applicable statutory requirements under subsection 1 of section
41-03-28, section 41-07-30, or section 41-09-29 are satisfied, the rights and defenses
of a holder in due course, a holder to which a negotiable document of title has been
duly negotiated, or a purchaser, respectively. Delivery, possession, and endorsement
are not required to obtain or exercise any of the rights under this subsection.
5. Except as otherwise agreed, an obligor under a transferable record has the same
rights and defenses as an equivalent obligor under equivalent records or writings
under title 41.
6. If requested by a person against which enforcement is sought, the person seeking to
enforce the transferable record shall provide reasonable proof that the person is in
control of the transferable record. Proof may include access to the authoritative copy
of the transferable record and related business records sufficient to review the terms of
the transferable record and to establish the identity of the person having control of the
transferable record.
### § 9-16-16. Creation and retention of electronic records and conversion of written

records by governmental agencies.
The state records administrator shall provide guidelines to determine whether, and the
extent to which, a governmental agency will create and retain electronic records and convert
written records to electronic records.
### § 9-16-17. Acceptance and distribution of electronic records by governmental agencies.

1. Except as otherwise provided in subsection 6 of section 9-16-11, the state records
administrator shall provide guidelines to determine whether, and the extent to which, a
governmental agency will send and accept electronic records and electronic
signatures to and from other persons.
2. To the extent that a governmental agency uses electronic records and electronic
signatures under subsection 1, the state records administrator, giving due
consideration to security, may specify:
a. The manner in which the electronic records must be sent, communicated,
received, and stored and the systems established for those purposes;
b. If electronic records must be signed by electronic means, the type of electronic
signature required, the manner and format in which the electronic signature must
be affixed to the electronic record, and the identity of, or criteria that must be met
by, any third party used by a person filing a document to facilitate the process;
c. Control processes and procedures as appropriate to ensure adequate
preservation, disposition, integrity, security, confidentiality, and auditability of
electronic records; and
d. Any other required attributes for electronic records which are specified for
corresponding nonelectronic records or reasonably necessary under the
circumstances.
3. Except as otherwise provided in subsection 6 of section 9-16-11, this chapter does not
require a governmental agency of this state to use or permit the use of electronic
records or electronic signatures.

### § 9-16-18. Interoperability.

The state records administrator shall encourage and promote consistency and
interoperability with similar requirements adopted by other governmental agencies of this and
other states and the federal government and nongovernmental persons interacting with
governmental agencies of this state. If appropriate, those standards may specify differing levels
of standards from which governmental agencies of this state may choose in implementing the
most appropriate standard for a particular application.
### § 9-16-19. Signatures and records secured through blockchain technology - Smart

contracts - Ownership of information - Definitions.
1. A signature secured through blockchain technology is considered to be in an electronic
form and to be an electronic signature.
2. A record or contract secured through blockchain technology is considered to be in an
electronic form and to be an electronic record.
3. Smart contracts may exist in commerce. A contract relating to a transaction may not be
denied legal effect, validity, or enforceability solely because the contract contains a
smart contract term.
4. Notwithstanding title 10 or chapters 41-02, 41-02.1, and 41-07, a person in or affecting
interstate or foreign commerce using blockchain technology to secure information the
person owns or has the right to use retains the same rights of ownership or use with
respect to that information as before the person secured the information using
blockchain technology. This subsection does not apply to the use of blockchain
technology to secure information in connection with a transaction to the extent the
terms of the transaction expressly provide for the transfer of rights of ownership or use
with respect to that information.
5. As used in this subsection:
a. "Blockchain technology" means distributed ledger technology that uses a
distributed, decentralized, shared, and replicated ledger, which may be public or
private, permissioned or permissionless, or driven by tokenized cryptoeconomics
or tokenless and which is protected with cryptography, is immutable, and
auditable and provides an uncensored truth.
b. "Smart contract" means an event-driven program, with state, that runs on a
distributed, decentralized, shared, and replicated ledger and which can take
custody over and instruct transfer of assets on that ledger.
