A.R.S. tit. 44 ch. 26 — Arizona Revised Statutes Title 44 Chapter 26 — Electronic Transactions

44-7001. Short title This chapter may be cited as the Arizona electronic transactions act. 44-7002. Definitions In this chapter, unless the context otherwise requires: 1. "Agreement" means the bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations and procedures that are given the effect of agreements under laws otherwise applicable to a particular transaction. 2. "Automated transaction" means a transaction that is conducted or performed, in whole or in part, by electronic means or electronic records and 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 that is 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 any other applicable law. 5. "Electronic" means relating to technology that has electrical, digital, magnetic, wireless, optical or electromagnetic capabilities or similar capabilities. 6. "Electronic agent" means a computer program or an electronic or other automated means that is 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 that is created, generated, sent, communicated, received or stored by electronic means. 8. "Electronic signature" means an electronic sound, symbol or process that is attached to or logically associated with a record and that is executed or adopted by an individual 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 federal government or a state or of a county or municipality or other political subdivision of a state. 10. "Information" means data, text, images, sounds, codes, computer programs, software or databases or similar items. 11. "Information processing system" means an electronic system for creating, generating, sending, receiving, storing, displaying or processing information. 12. "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency or public corporation or any other legal or commercial entity. 13. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and that is retrievable in perceivable form. 14. "Security procedure" means a procedure that is employed to verify that an electronic signature, record or performance is that of a specific person or to detect changes or errors in the information in an electronic record. Security procedure includes a procedure that requires the use of algorithms or other codes, identifying words or numbers or encryption, callback or other acknowledgment procedures. 15. "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. State includes an Indian tribe or band or Alaskan native village that is recognized by federal law or formally acknowledged by another state. 16. "State agency" means any department, commission, board, institution or other agency of the state that receives, expends or disburses state funds or incurs obligations of the state, including the Arizona board of regents but excluding the universities under the jurisdiction of the Arizona board of regents, the community college districts and the legislative or judicial branches. 17. "Transaction" means an action or set of actions occurring between two or more persons relating to the conduct of business, commercial or governmental affairs. 44-7003. Scope A. Except as otherwise provided in subsections B and C of this section, this chapter applies to any electronic record and electronic signature relating to a transaction. B. For the purposes of this article and articles 2, 3 and 4 of this chapter, this chapter does not apply to a transaction to the extent the transaction is governed by: 1. Title 14 as it relates to the creation and execution of wills, codicils or testamentary trusts. 2. Title 19, chapter 1 as it relates to the signing of referendum petitions and initiative petitions. 3. Title 47, other than title 47, chapters 2 and 2A and section 47-1306 and as otherwise provided in section 44-7016. C. Article 5 of this chapter applies only to title 10 and transactions governed by title 47, chapters 2, 2A and 7. D. This chapter applies to an electronic record or electronic signature otherwise excluded from the application of this chapter under subsection B or C of this section to the extent the record or signature is governed by a law other than those laws described in subsection B or C of this section. E. Any transaction subject to this chapter is also subject to any other applicable substantive law. 44-7004. Prospective application This chapter applies to any electronic record or electronic signature created, generated, sent, communicated, received or stored on or after the effective date of this chapter. 44-7005. Use of electronic records and signatures; variation by agreement A. This chapter does not require a record or signature to be created, generated, sent, communicated, received or stored or otherwise processed or used by electronic means or in electronic form. B. 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 a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct. C. A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement. D. Except as provided in subsection C and otherwise provided in this chapter, the effect of any of the provisions of this chapter may be varied by agreement. The words "unless otherwise agreed", or other similar words, as used in this chapter do not imply that the effect of other provisions may not be varied by agreement. E. Whether an electronic record or electronic signature has legal consequences is determined by this chapter and any other applicable law. 44-7006. Construction; application This chapter shall be construed and applied to: 1. Facilitate electronic transactions consistent with other applicable law. 2. Be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices. 3. Effectuate its general purpose to make uniform the law of this state with respect to the subject of this chapter for intrastate, interstate and international transactions. 44-7007. Legal recognition of electronic records, signatures and contracts; definition A. A record or signature in electronic form cannot be denied legal effect and enforceability solely because the record or signature is in electronic form. B. A contract formed by an electronic record cannot be denied legal effect and enforceability solely because an electronic record was used in its formation. C. An electronic record satisfies any law that requires a record to be in writing or to be retained, or both. D. An electronic signature satisfies any law that requires a signature. E. For the purposes of this section, "law" includes a governmental agency's policy. 44-7008. Provision of information in writing; presentation of records A. If the parties to a transaction have agreed to conduct the transaction 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 that is 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. B. If a law other than this chapter requires a person to post or display a record in a certain manner, to send, communicate or transmit a record by a specified method or to format information in a record in a certain manner, the following requirements apply: 1. The record shall be posted or displayed in the manner prescribed in that law. 2. Except as otherwise provided in subsection D, paragraph 2, the record shall be sent, communicated or transmitted by the method prescribed in that law. 3. The record shall contain the information formatted in the manner prescribed in that law. C. 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. D. The parties to the transaction shall not vary the requirements of this section, except that to the extent a law other than this chapter requires: 1. Information to be provided, sent or delivered in writing but allows that requirement to be varied by agreement, the parties may agree to vary the requirement prescribed in subsection A that the information be in the form of an electronic record capable of retention. 2. A record to be sent, communicated or transmitted by postage prepaid first class mail or regular mail but allows that requirement to be varied by agreement, the parties may agree to vary the requirement to the extent allowed by the other law. 44-7009. Attribution and effect of electronic record and signature A. An electronic record or electronic signature is attributable to a person if the record or signature was the act of the person or the person's electronic agent. 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. B. The effect of an electronic record or electronic signature that is attributed to a person under subsection A is determined from the context and surrounding circumstances at the time the record or signature was created, executed or adopted, including the parties' agreement, if any, and as otherwise provided by law. 44-7010. Effect of change or error A. The following apply to any change or error in an electronic record that occurs in a transmission between the parties to a transaction: 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 that involves 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. (c) Has not used or received any benefit or value from the consideration, if any, received from the other person. B. If subsection A, paragraphs 1 and 2 do not apply, the change or error has the effect provided by other applicable law, including the law of mistake, and the parties' contract, if any. C. The parties to the transaction shall not agree to vary the requirements prescribed in subsection A, paragraph 2 and subsection B. 44-7011. Notarization; acknowledgment If a law requires a signature or record to be notarized, acknowledged, verified or made under oath, that 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. 44-7012. Electronic records retention; originals; definition A. If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record that: 1. Accurately reflects the information prescribed in the record after the record was first generated in its final form as an electronic record or otherwise. 2. Remains accessible for later reference. B. A person may satisfy subsection A of this section by using the services of another person to satisfy subsection A of this section. C. If a law requires: 1. A record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained according to subsection A of this section. 2. 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 according to subsection A of this section. D. A record retained as an electronic record pursuant to subsection A of this section satisfies a law that requires a person to retain a record for evidentiary, audit or like purposes, unless a law that is enacted after July 18, 2000 prohibits the use of an electronic record for the specified purpose. E. For the purposes of this section, "law" includes a governmental agency's policy. 44-7013. Admissibility in evidence In any proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form. 44-7014. Automated transaction contracts A. In any automated transaction, the parties may form a contract by the interaction of: 1. 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. An electronic agent and an individual who acts on the individual's own behalf or for another person, including by an interaction in which the individual performs actions that the individual may refuse to perform and in which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance. B. In addition to subsection A, paragraphs 1 and 2, the terms of any contract are determined by the substantive law that applies to that contract. 44-7015. Time and place of sending and receipt A. Unless otherwise agreed to by the sender and the recipient, an electronic record is sent if the record: 1. Is properly addressed or otherwise properly directed 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. 2. Is in a form that is capable of being processed by the information processing system described in paragraph 1 of this subsection. 3. Enters an information processing system that is 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 that is designated or used by the recipient and that is under the control of the recipient. B. Unless otherwise agreed to by the sender and the recipient, an electronic record is received if the record: 1. 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. 2. Is in a form that is capable of being processed by the information processing system described in paragraph 1 of this subsection. C. Subsection B applies even if the information processing system is located in a different place from the place the electronic record is deemed to be received pursuant to subsection D. D. Unless otherwise expressly provided in the electronic record or agreed to by 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. If the sender or recipient has more than one place of business, the place of business of that person is the place that has the closest relationship to the underlying transaction. 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 applicable. E. An electronic record is received pursuant to subsection B even if no individual is aware of its receipt. F. Receipt of an electronic acknowledgment from an information processing system described in subsection B establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received. G. If a person is aware that an electronic record was purportedly sent as prescribed in subsection A or purportedly received as prescribed in subsection B, but was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law. Except to the extent allowed by the other law, the parties may not agree to vary the requirements of this subsection. 44-7016. Transferable records; definition A. 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. B. A system complies with subsection A and a person has control of a transferable record if the transferable record is created, stored and assigned in such a manner that all of the following are true: 1. A single authoritative copy of the transferable record exists that is unique, identifiable and, except as otherwise provided in paragraphs 4, 5 and 6 of this subsection, unalterable. 2. The authoritative copy identifies the person asserting control as either: (a) The person to which the transferable record was issued. (b) If the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred. 3. The authoritative copy is communicated to and maintained by the person asserting control or the person's designated custodian. 4. 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. 5. Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy. 6. Any revision of the authoritative copy is readily identifiable as authorized or unauthorized. C. Except as otherwise agreed, a person that has control of a transferable record is the holder as defined in section 47-1201 of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing pursuant to title 47 including, if the applicable requirements under section 47-3302, subsection A or section 47-7501 or 47-9308 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 indorsement are not required to obtain or exercise any of the rights under this subsection. D. 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 47. E. 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 that are sufficient to review the terms of the transferable record and to establish the identity of the person that has control of the transferable record. F. For the purposes of this section, "transferable record" means an electronic record that both: 1. Would be a note pursuant to title 47, chapter 3 or a document pursuant to title 47, chapter 7 if the electronic record were in writing. 2. The issuer has expressly agreed the electronic record is a transferable record. 44-7031. Secure electronic signatures A signature is a secure electronic signature if, through the application of a security procedure, it can be demonstrated that the electronic signature at the time the signature was made was all of the following: 1. Unique to the person using it. 2. Capable of verification. 3. Under the sole control of the person using it. 4. Linked to the electronic record to which it relates in such a manner that if the record were changed the electronic signature would be invalidated. 44-7032. Secure electronic records If, through the ongoing application of a security procedure, it can be demonstrated that an electronic record signed by a secure electronic signature has remained unaltered since a specified time, the record is a secure electronic record from that time of signing forward. 44-7033. Presumptions A. There is a rebuttable presumption that a secure electronic record has not been altered since the specific time to which the secure status relates. B. There is a rebuttable presumption that the secure electronic signature is the electronic signature of the party to whom it relates. C. In the absence of a secure electronic record or a secure electronic signature, this chapter does not create any presumption regarding the authenticity and integrity of an electronic record or an electronic signature. 44-7034. Electronic notarization; acknowledgment If a law requires a signature or record to be notarized, acknowledged, verified or made under oath, that requirement is satisfied if all of the following are true: 1. A secure electronic signature of the individual who is authorized to perform those acts and all other information that is required to be included pursuant to any other applicable law are applied to a secure electronic record. 2. The secure electronic record has a time stamp token that is both: (a) Created by a party recognized by the secretary of state. (b) In a form that is accepted by the secretary of state to do all of the following: (i) Reasonably verify the validity of the signing party's secure electronic signature. (ii) Reasonably establish the time of signing. 3. The secure electronic record cannot be altered without invalidating the time stamp token. 44-7041. Creation; retention; conversion of written records A. Each governmental agency shall determine if, and the extent to which, the governmental agency will create and retain electronic records and convert written records to electronic records. Any governmental agency that is subject to the management, preservation, determination of value and disposition of records requirements prescribed in sections 41-151, 41-151.12, 41-151.13, 41-151.14, 41-151.15, 41-151.16, 41-151.17 and 41-151.19 and the permanent public records requirements prescribed in section 39-101 shall comply with those requirements. B. State agencies shall comply with the standards adopted by the department of administration pursuant to title 18, chapter 1. C. All governmental agencies shall comply with the policies that are established pursuant to section 18-106 and that apply to the use of electronic signatures. 44-7042. Sending and accepting electronic records; exemption A. Except as otherwise provided in section 44-7012, subsection D, and this subsection, each governmental agency, except state agencies, shall determine if, and the extent to which, the governmental agency will send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use and rely on electronic records and electronic signatures. State agencies shall accept electronic records and electronic signatures and shall comply with the appropriate standards and policies adopted or established by the department of administration pursuant to title 18, chapter 1. B. To the extent that a governmental agency uses electronic records and electronic signatures pursuant to subsection A of this section, the governmental agency after giving due consideration to security may specify: 1. The manner and format in which the electronic records must be created, generated, sent, communicated, received and stored and the systems established for those purposes. 2. 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. 3. Control processes and procedures as appropriate to ensure adequate preservation, disposition, integrity, security, confidentiality and ability to perform audits of electronic records. 4. Any other required attributes for electronic records that are specified for corresponding nonelectronic records or that are reasonably necessary under the circumstances. C. This section does not apply to the judicial branch. 44-7043. Interoperability Technology standards adopted by the governmental information technology agency, electronic signature use policies adopted by the secretary of state or any other similar standards adopted by any other governmental agency pursuant to section 44-7042 shall encourage and promote consistency and interoperability with similar requirements adopted by other governmental agencies, other states, the federal government and nongovernmental persons that interact with governmental agencies. If deemed appropriate by the entity adopting the standards, the standards may allow for differing levels of standards from which governmental agencies may choose in implementing the most appropriate standard for a particular application. 44-7051. Consumer protection A. Nothing in this chapter diminishes the parties' consumer protection rights prescribed in chapter 10, article 7 of this title or any other federal or state law relating to consumers. B. If a consumer law, other than this chapter, requires a paper record or notice of the transaction, the parties to the transaction may request that the record or notice be provided in an electronic format and that record or notice shall comply with this chapter. Even if before completing a consumer transaction by an electronic method that complies with this chapter, a party to the transaction requests that a record or notice of the transaction be delivered in electronic form, that party may subsequently change that preference and request that all future records or notices relating to that transaction be sent in paper form to an appropriate address. Withdrawal of consent does not affect the enforceability of electronic records or notices previously provided or made available to that party in accordance with this chapter. C. A nonelectronic consumer contract or agreement may not contain a provision that authorizes any transaction or part of any transaction pursuant to that contract or agreement by electronic means unless all of the following apply: 1. The consumer makes a separate and express assent or signing either manually or electronically that specifies that the consumer agrees that certain transactions or parts of transactions will be conducted by electronic means. 2. The contract or agreement indicates which transactions or parts of transactions that may be conducted by electronic means and the manner in which those transactions or parts of transactions shall be conducted. 3. The consumer agrees, as part of the assent, to provide the other party with the consumer's electronic address that complies with section 44-7015. 4. The consumer agrees, as part of the assent, to notify the other party, either manually or electronically, of any change in the electronic address prescribed in paragraph 3 or the consumer's withdrawal of consent to electronic transactions. 44-7052. Electronic delivery of written communications; exception; definition A. Any law requiring an entity, a government agency, a government official or any person acting with official government authority to communicate with a person in writing or by mail may be satisfied by use of a secure electronic delivery service. B. This section does not apply to ballots, sample ballots, publicity pamphlets or other similar governmental communication regarding an election. C. For the purposes of this section, "secure electronic delivery service" means a service that both: 1. Employs security procedures to provide, send, deliver or otherwise communicate electronic records to their intended recipients by means that use either: (a) Security methods such as passwords, encryption and matching an electronic address to a person's physical United States postal address. (b) Other security methods that are consistent with applicable law or industry standards. 2. Operates subject to otherwise applicable requirements of the electronic signatures in global and national commerce act (15 United States Code chapter 96) or this chapter and that allows information to be provided, sent, delivered or otherwise communicated by or from an entity, a government agency, a government official or any person acting with official government authority to a person in the form of an electronic record. 44-7061. Signatures and records secured through blockchain technology; smart contracts; ownership of information; definitions A. A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature. B. A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record. C. Smart contracts may exist in commerce. A contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a smart contract term. D. Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain technology to secure information that 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 that the terms of the transaction expressly provide for the transfer of rights of ownership or use with respect to that information. E. For the purposes of this section: 1. "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 crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth. 2. "Smart contract" means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger.