AN ACT to clarify the use of electronic signatures in CERTAIN contexts, PURSUANT TO A REVIEW directed BY THE GENERAL ASSEMBLY, as recommended by the general statutes commission.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 6‑21.6 reads as rewritten:

§ 6‑21.6.  Reciprocal attorneys' fees provisions in business contracts.

(a)        As used in this section, the following definitions apply:

(1)        Business contract. – A contract entered into primarily for business or commercial purposes. The term does not include a consumer contract, an employment contract, or a contract to which a government or a governmental agency of this State is a party.

(2)        Consumer contract. – A contract entered into by one or more individuals primarily for personal, family, or household purposes.

(3)        Employment contract. – A contract between an individual and another party to provide personal services by that individual to the other party, whether the relationship is in the nature of employee‑employer or principal‑independent contractor.

(4)        Reciprocal attorneys' fees provisions. – Provisions in any written business contract by which each party to the contract agrees, in the manner set out in subsection (b) of this section, upon the terms and subject to the conditions set forth in the contract that are made applicable to all parties, to pay or reimburse the other parties for attorneys' fees and expenses incurred by reason of any suit, action, proceeding, or arbitration involving the business contract.

(b)        Reciprocal attorneys' fees provisions in business contracts are valid and enforceable for the recovery of reasonable attorneys' fees and expenses only if all of the parties to the business contract sign by hand the business contract. Signature by hand is not intended to prevent the application of this section to a business contract executed by either the contract by hand or with one of the following:

(1)        A party's An electronic signature, as defined in G.S. 66‑312, if the party's electronic signature originates from an affirmative action on the part of the party to evidence acceptance and execution such as typing the party's signature or writing the party's signature with a finger or stylus on a touchscreen to indicate acceptance and execution.

(2)        A party's manual signature that is delivered by an electronic reproductive image thereof.

(c)        If a business contract governed by the laws of this State contains a reciprocal attorneys' fees provision, the court or arbitrator in any suit, action, proceeding, or arbitration involving the business contract may award reasonable attorneys' fees in accordance with the terms of the business contract. In determining reasonable attorneys' fees and expenses under this section, the court or arbitrator may consider all relevant facts and circumstances, including, but not limited to, the following:

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(7)        Offers of judgment pursuant to Rule 68 of the North Carolina Rules of Civil Procedure G.S. 1A‑1, Rule 68, and whether judgment finally obtained was more favorable than such these offers.

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(d)       Reasonable attorneys' fees and expenses shall not be are not governed by (i) any statutory presumption or provision in the business contract providing for a stated percentage of the amount of such the attorneys' fees or (ii) the amount recovered in other cases in which the business contract contains reciprocal attorneys' fees provisions.

(e)        Nothing in this section shall in any way make valid or invalid makes valid or invalid attorneys' fees provisions in consumer contracts or in any note, conditional sale contract, or other evidence of indebtedness that is otherwise governed by G.S. 6‑21.2. If the business contract is also a note, conditional sale contract, or other evidence of indebtedness that is otherwise governed by G.S. 6‑21.2, then the parties that are entitled to recover attorneys' fees and expenses may elect to recover attorneys' fees and expenses either under this section or G.S. 6‑21.2 but may recover only once for the same attorneys' fees and expenses.

(f)        In any suit, action, proceeding, or arbitration primarily for the recovery of monetary damages, the award of reasonable attorneys' fees may shall not exceed the amount in controversy.

(g)        Nothing in this section shall in any way make valid or invalid makes valid or invalid attorneys' fees provisions in a contract of insurance governed by Chapter 58 of the General Statutes.

SECTION 2.(a)  Subsection (e) of G.S. 10B‑5 is recodified as the fourth and fifth sentences of subdivision (b)(8) of that section.

SECTION 2.(b)  G.S. 10B‑5, as amended by subsection (a) of this section, reads as rewritten:

§ 10B‑5.  Qualifications.

(a)        Except as provided in subsection (d) of this section, the Secretary shall commission as a notary any qualified person who submits an application in accordance with this Chapter.

(b)        A person qualified for a notarial commission shall meet all of the following requirements:

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(8)        Submit an application containing no significant misstatement or omission of fact. The application form shall be provided by the Secretary and be available at the register of deeds office in each county. Every application shall include the signature of the applicant written with pen and ink, applicant, and the signature shall be acknowledged by the applicant before a person authorized to administer oaths. Notwithstanding subdivision (8) of subsection (b) of this section, the An applicant's signature on an initial application shall be written with pen and ink. The Secretary may allow applications for commissions to be submitted electronically, in the format prescribed by the Secretary. The Secretary shall establish a process for submission of the signature of the applicant prior to commissioning, which applicant's signature that may include electronic submission.

(9)        Repealed by Session Laws 2013‑204, s. 1, effective July 1, 2013.

(c)        The notary shall be commissioned in his or her county of residence, unless the notary is not a North Carolina resident, in which case he or she shall be commissioned in the county of his or her employment or business.

(d)       The Secretary may deny an application for commission or recommission if any of the following apply applies to an applicant:

(1)        Submission of an incomplete application or an application containing a material misstatement or omission of fact.

(2)        The applicant's conviction or plea of admission or nolo contendere to a felony or any crime involving dishonesty or moral turpitude. In no case may shall a commission be issued to an applicant within 10 years after release from prison, probation, or parole, whichever is later.

(3)        A finding or admission of liability against the applicant in a civil lawsuit based on the applicant's deceit.

(4)        The revocation, suspension, restriction, or denial of a notarial commission or professional license by this or any other state or nation. In no case may shall a commission be issued to an applicant within five years after the completion of all conditions of any disciplinary order.

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(e)        Recodified.

SECTION 3.  This act is effective when it becomes law.