§9-1628. Nonliability and limitation on liability of secured party; liability of secondary obligor

665 words·~3 min read·/me/title-11-uniform-commercial-code/9-1628

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1). Subject to subsection

(6), unless a secured party knows that a person is a debtor or obligor, knows the identity of the person and knows how to communicate with the person:

(a). The secured party is not liable to the person or to a secured party or lienholder that has filed a financing statement against the person for failure to comply with this Article; and [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). The secured party's failure to comply with this Article does not affect the liability of the person for a deficiency. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 2023, c. 669, Pt. A, §166 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(2). Subject to subsection

(6), a secured party is not liable because of its status as secured party:

(a). To a person that is a debtor or obligor, unless the secured party knows:

(i)That the person is a debtor or obligor;

(ii)The identity of the person; and

(iii)How to communicate with the person; or [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

(i)That the person is a debtor; and

(ii)The identity of the person. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 2023, c. 669, Pt. A, §167 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(3). A secured party is not liable to any person, and a person's liability for a deficiency is not affected because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on:

(a). A debtor's representation concerning the purpose for which collateral was to be used, acquired or held; or [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). An obligor's representation concerning the purpose for which a secured obligation was incurred. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(4). A secured party is not liable to any person under section 9‑1625, subsection (3), paragraph

(b)for its failure to comply with section 9‑1616 .

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(5). A secured party is not liable under section 9‑1625, subsection (3), paragraph

(b)more than once with respect to any one secured obligation.

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(6). Subsections

(1)and

(2)do not apply to limit the liability of a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later:

(a). The person is a debtor or obligor; and [PL 2023, c. 669, Pt. A, §168 (NEW); PL 2023, c. 669, Pt. E, §1 (AFF).]

(b). The secured party knows that the information in subsection (2), paragraph

(a), subparagraph (i),

(ii)or

(iii)relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral or the system in which the collateral is recorded. [PL 2023, c. 669, Pt. A, §168 (NEW); PL 2023, c. 669, Pt. E, §1 (AFF).]

[PL 2023, c. 669, Pt. A, §168 (NEW); PL 2023, c. 669, Pt. E, §1 (AFF).]