Amended in Assembly May 4, 2016

Amended in Assembly April 25, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1743


Introduced by Assembly Member Dababneh

(Coauthor: Assembly Member Wilk)

February 1, 2016


An act to amend Section 1633.3 of, and to add Sections 2984.7, 2984.8, 2986, and 2986.1 to, the Civil Code, relating to electronic transactions.

LEGISLATIVE COUNSEL’S DIGEST

AB 1743, as amended, Dababneh. Electronic transactions: motor vehicle finance.

Existing law, the Uniform Electronic Transactions Act (UETA), generally allows parties to contract to conduct transactions by electronic means, imposes specified requirements on electronic transactions in order to comply with the act, and provides specified protections for electronic transactions conducted pursuant to the act. Existing law defines and regulates the form and content of conditional sale contracts and lease contracts for motor vehicles and excepts these contracts from the application of the UETA.

This bill would delete the exemption from the UETA for conditional sale and lease contracts for motor vehicles. The bill would require sellers and lessors to offer buyers and lessees the option of signing their respective contracts and agreements electronically. The bill would require certain disclosures to be made in this regard and to be in a document separate from a conditional sale contract or lease contract. The bill would prohibit a seller or lessor from charging a buyer or lessee for a decision not to sign electronically and would prohibit charging more or less for vehicles based on the decision to sign electronically. The bill would require that the disclosures described here be signed at the seller’s or lessor’s place of business.

begin insert

This bill would provide, in the event of a discrepancy between an electronic contract in the possession of the seller and an executed contract in possession of the buyer, as specified, that there is no presumption regarding which is accurate or prevailing.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1633.3 of the Civil Code, as amended
2by Section 1.5 of Chapter 638 of the Statutes of 2015, is amended
3to read:

4

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
5and (c), this title applies to electronic records and electronic
6signatures relating to a transaction.

7(b) This title does not apply to transactions subject to the
8following laws:

9(1) A law governing the creation and execution of wills, codicils,
10or testamentary trusts.

11(2) Division 1 (commencing with Section 1101) of the Uniform
12Commercial Code, except Sections 1206 and 1306.

13(3) Divisions 3 (commencing with Section 3101), 4
14(commencing with Section 4101), 5 (commencing with Section
155101), 8 (commencing with Section 8101), 9 (commencing with
16Section 9101), and 11 (commencing with Section 11101) of the
17Uniform Commercial Code.

18(4) A law that requires that specifically identifiable text or
19disclosures in a record or a portion of a record be separately signed,
20including initialed, from the record. However, this paragraph does
21not apply to Section 1677 or 1678 of this code or Section 1298 of
22the Code of Civil Procedure.

23(c) This title does not apply to any specific transaction described
24in Section 17511.5 of the Business and Professions Code, Section
2556.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
26or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
P3    1Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
21789.16, or 1793.23 of, Chapter 1 (commencing with Section
31801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
41917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
52924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
62945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
72954.5 or 2963 of, Section 3071.5 of, Part 5 (commencing with
8Section 4000) of Division 4 of, or Part 5.3 (commencing with
9Section 6500) of Division 4 of this code, subdivision (b) of Section
1018608 or Section 22328 of the Financial Code, Section 1358.15,
111365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
12Code, Section 662, paragraph (2) of subdivision (a) of Section
13663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of
14Section 678, subdivisions (a) and (b) of Section 678.1, Section
15786 as it applies to individual and group disability policies, Section
1610192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or
1711624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482
18of the Public Utilities Code, or Section 9975 or 11738 of the
19Vehicle Code. An electronic record may not be substituted for any
20notice that is required to be sent pursuant to Section 1162 of the
21Code of Civil Procedure. Nothing in this subdivision shall be
22construed to prohibit the recordation of any document with a county
23recorder by electronic means.

24(d) This title applies to an electronic record or electronic
25signature otherwise excluded from the application of this title under
26subdivision (b) when used for a transaction subject to a law other
27than those specified in subdivision (b).

28(e) A transaction subject to this title is also subject to other
29applicable substantive law.

30(f) The exclusion of a transaction from the application of this
31title under subdivision (b) or (c) shall be construed only to exclude
32the transaction from the application of this title, but shall not be
33construed to prohibit the transaction from being conducted by
34electronic means if the transaction may be conducted by electronic
35means under any other applicable law.

36(g) Notwithstanding subdivisions (b) and (c), this title shall
37apply to electronic records and electronic signatures relating to
38transactions conducted by a person licensed, certified, or registered
39pursuant to the Alarm Company Act (Chapter 11.6 (commencing
40with Section 7590) of Division 3 of the Business and Professions
P4    1Code) for purposes of activities authorized by Section 7599.54 of
2the Business and Professions Code.

3(h) This section shall remain in effect only until January 1, 2019,
4and as of that date is repealed, unless a later enacted statute, that
5is enacted before January 1, 2019, deletes or extends that date.

6

SEC. 2.  

Section 1633.3 of the Civil Code, as amended by
7Section 2.5 of Chapter 638 of the Statutes of 2015, is amended to
8read:

9

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
10and (c), this title applies to electronic records and electronic
11signatures relating to a transaction.

12(b) This title does not apply to transactions subject to the
13following laws:

14(1) A law governing the creation and execution of wills, codicils,
15or testamentary trusts.

16(2) Division 1 (commencing with Section 1101) of the Uniform
17Commercial Code, except Sections 1206 and 1306.

18(3) Divisions 3 (commencing with Section 3101), 4
19(commencing with Section 4101), 5 (commencing with Section
205101), 8 (commencing with Section 8101), 9 (commencing with
21Section 9101), and 11 (commencing with Section 11101) of the
22Uniform Commercial Code.

23(4) A law that requires that specifically identifiable text or
24disclosures in a record or a portion of a record be separately signed,
25including initialed, from the record. However, this paragraph does
26not apply to Section 1677 or 1678 of this code or Section 1298 of
27the Code of Civil Procedure.

28(c) This title does not apply to any specific transaction described
29in Section 17511.5 of the Business and Professions Code, Section
3056.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
31or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
32Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
331789.16, or 1793.23 of, Chapter 1 (commencing with Section
341801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
351917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
362924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
372945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
382954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with
39Section 4000) of Division 4 of, or Part 5.3 (commencing with
40Section 6500) of Division 4 of this code, subdivision (b) of Section
P5    118608 or Section 22328 of the Financial Code, Section 1358.15,
21365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
3Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as
4it applies to individual and group disability policies, 10192.18,
510199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1
6of the Insurance Code, Section 779.1, 10010.1, or 16482 of the
7Public Utilities Code, or Section 9975 or 11738 of the Vehicle
8Code. An electronic record may not be substituted for any notice
9that is required to be sent pursuant to Section 1162 of the Code of
10Civil Procedure. Nothing in this subdivision shall be construed to
11prohibit the recordation of any document with a county recorder
12by electronic means.

13(d) This title applies to an electronic record or electronic
14signature otherwise excluded from the application of this title under
15subdivision (b) when used for a transaction subject to a law other
16than those specified in subdivision (b).

17(e) A transaction subject to this title is also subject to other
18applicable substantive law.

19(f) The exclusion of a transaction from the application of this
20title under subdivision (b) or (c) shall be construed only to exclude
21the transaction from the application of this title, but shall not be
22construed to prohibit the transaction from being conducted by
23electronic means if the transaction may be conducted by electronic
24means under any other applicable law.

25(g) Notwithstanding subdivisions (b) and (c), this title shall
26apply to electronic records and electronic signatures relating to
27transactions conducted by a person licensed, certified, or registered
28pursuant to the Alarm Company Act (Chapter 11.6 (commencing
29with Section 7590) of Division 3 of the Business and Professions
30Code) for purposes of activities authorized by Section 7599.54 of
31the Business and Professions Code.

32(h) This section shall become operative on January 1, 2019.

33(i) This section shall remain in effect only until January 1, 2021,
34and as of that date is repealed, unless a later enacted statute, that
35is enacted before January 1, 2021, deletes or extends that date.

36

SEC. 3.  

Section 1633.3 of the Civil Code, as added by Section
373.5 of Chapter 638 of the Statutes of 2015, is amended to read:

38

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
39and (c), this title applies to electronic records and electronic
40signatures relating to a transaction.

P6    1(b) This title does not apply to transactions subject to the
2following laws:

3(1) A law governing the creation and execution of wills, codicils,
4or testamentary trusts.

5(2) Division 1 (commencing with Section 1101) of the Uniform
6Commercial Code, except Sections 1206 and 1306.

7(3) Divisions 3 (commencing with Section 3101), 4
8(commencing with Section 4101), 5 (commencing with Section
95101), 8 (commencing with Section 8101), 9 (commencing with
10Section 9101), and 11 (commencing with Section 11101) of the
11Uniform Commercial Code.

12(4) A law that requires that specifically identifiable text or
13disclosures in a record or a portion of a record be separately signed,
14including initialed, from the record. However, this paragraph does
15not apply to Section 1677 or 1678 of this code or Section 1298 of
16the Code of Civil Procedure.

17(c) This title does not apply to any specific transaction described
18in Section 17511.5 of the Business and Professions Code, Section
1956.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
20or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
21Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
221789.16, or 1793.23 of, Chapter 1 (commencing with Section
231801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
241917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
252924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
262945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
272954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with
28Section 4000) of Division 4 of, or Part 5.3 (commencing with
29Section 6500) of Division 4 of this code, subdivision (b) of Section
3018608 or Section 22328 of the Financial Code, Section 1358.15,
311365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
32Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786,
3310086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44,
3410199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or
3511624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482
36of the Public Utilities Code, or Section 9975 or 11738 of the
37Vehicle Code. An electronic record may not be substituted for any
38notice that is required to be sent pursuant to Section 1162 of the
39Code of Civil Procedure. Nothing in this subdivision shall be
P7    1construed to prohibit the recordation of any document with a county
2recorder by electronic means.

3(d) This title applies to an electronic record or electronic
4signature otherwise excluded from the application of this title under
5subdivision (b) when used for a transaction subject to a law other
6than those specified in subdivision (b).

7(e) A transaction subject to this title is also subject to other
8applicable substantive law.

9(f) The exclusion of a transaction from the application of this
10title under subdivision (b) or (c) shall be construed only to exclude
11the transaction from the application of this title, but shall not be
12construed to prohibit the transaction from being conducted by
13electronic means if the transaction may be conducted by electronic
14means under any other applicable law.

15(g) Notwithstanding subdivisions (b) and (c), this title shall
16apply to electronic records and electronic signatures relating to
17transactions conducted by a person licensed, certified, or registered
18pursuant to the Alarm Company Act (Chapter 11.6 (commencing
19with Section 7590) of Division 3 of the Business and Professions
20Code) for purposes of activities authorized by Section 7599.54 of
21the Business and Professions Code.

22(h) This section shall become operative on January 1, 2021.

23

SEC. 4.  

Section 2984.7 is added to the Civil Code, to read:

24

2984.7.  

(a) (1) Prior to the execution of a conditional sale
25contract to which Section 1633.3 may apply, the seller shall offer
26the buyer the option of signing electronically the conditional sale
27contract and agreements as part of the transaction of the vehicle.
28A person’s consent to opt in to signing electronically may be
29acquired in writing or electronically. The consent form for opting
30in shall disclose, in writing or electronically, all of the following:

31(A) The election to sign electronically the conditional sale
32contract and other agreements as part of the transaction of the
33vehicle is voluntary.

34(B) The buyer may opt out at any time.

35(2) The buyer’s signature, in writing or electronically, shall be
36set forth immediately below the opt-in consent disclosure.

37(b) (1) The seller shall not charge a buyer for the decision not
38to sign a conditional sale contract electronically.

P8    1(2) The seller shall not charge more or less for the purchase of
2a vehicle to a buyer opting to sign a conditional sale contract
3electronically.

4(c) Notwithstanding Section 2981.9, the disclosure of the option
5to sign electronically and the buyer’s consent to it, if applicable,
6as described in subdivision (a), shall be in a document separate
7from the conditional sale contract.

begin insert

8
(d) In the event of a discrepancy between an electronic copy of
9the executed contract in the possession of the seller and a copy of
10the executed contract provided to the buyer pursuant to Section
112981.9, there shall be no presumption that either the seller’s copy
12or the buyer’s copy is the accurate or prevailing copy for purposes
13of determining the buyer’s obligations. Any provision in a contract
14that purports to provide otherwise is void.

end insert
15

SEC. 5.  

Section 2984.8 is added to the Civil Code, to read:

16

2984.8.  

A conditional sale contract to which Section 1633.3
17applies shall be signed at the seller’s place of business.

18

SEC. 6.  

Section 2986 is added to the Civil Code, to read:

19

2986.  

(a) (1) Prior to the execution of a lease contract to which
20Section 1633.3 may apply, the lessor shall offer the lessee the
21option of signing electronically the lease contract and agreements
22as part of the transaction of the vehicle. A person’s consent to opt
23in to signing electronically may be acquired in writing or
24electronically. The consent form for opting in shall disclose, in
25writing or electronically, all of the following:

26(A) The election to sign electronically the lease contract and
27other agreements as part of the transaction of the vehicle is
28voluntary.

29(B) The lessee may opt out at any time.

30(2) The lessee’s signature, in writing or electronically, shall be
31set forth immediately below the opt-in consent disclosure.

32(b) (1) The lessor shall not charge a lessee for the decision not
33to sign a lease contract electronically.

34(2) The lessor shall not charge more or less for the lease of a
35vehicle to a lessee opting to sign a lease contract electronically.

36(c) Notwithstanding Section 2985.8, the disclosure of the option
37to sign electronically and the lessee’s consent to it, if applicable,
38as described in subdivision (a), shall be in a document separate
39from the lease contract.

begin insert

P9    1
(d) In the event of a discrepancy between an electronic copy of
2the executed contract in the possession of the lessor and a copy of
3the executed contract provided to the lessee pursuant to subdivision
4(g) of Section 2985.8, there shall be no presumption that either
5the lessor’s copy or the lessee’s copy is the accurate or prevailing
6copy for purposes of determining the lessee’s obligations. Any
7provision in a contract that purports to provide otherwise is void.

end insert
8

SEC. 7.  

Section 2986.1 is added to the Civil Code, to read:

9

2986.1.  

A lease contract to which Section 1633.3 applies shall
10be signed at the lessor’s place of business.



O

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