§12A-1-9-628. Nonliability and limitation on liability of secured
505 words·~2 min read·
/ok/title-12a-uniform-commercial-code/12a-1-9-628·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
party; liability of secondary obligor. NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR
(a)Subject to subsection
(f)of this section, 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:
(1)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
(2)the secured party's failure to comply with this article does not affect the liability of the person for a deficiency.
(b)Subject to subsection
(f)of this section, a secured party is not liable because of its status as secured party:
(1)to a person that is a debtor or obligor, unless the secured party knows:
(A)that the person is a debtor or obligor;
(B)the identity of the person; and
(C)how to communicate with the person; or
(2)to a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(A)that the person is a debtor; and
(B)the identity of the person.
(c)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:
(1)a debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or
(2)an obligor's representation concerning the purpose for which a secured obligation was incurred.
(d)A secured party is not liable to any person under paragraph
(2)of subsection
(c)of Section 1-9-625 of this title for its failure to comply with Section 1-9-616 of this title.
(e)A secured party is not liable under paragraph
(2)of subsection
(c)of Section 1-9-625 of this title more than once with respect to any one secured obligation.
(f)Subsections
(a)and
(b)of this section 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:
(1)the person is a debtor or obligor; and
(2)the secured party knows that the information in subparagraph (A), (B), or
(C)of paragraph
(1)of subsection
(b)of this section 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. Added by Laws 2000, c. 371, § 135, eff. July 1, 2001. Amended by Laws 2024, c. 13, § 90, eff. Nov. 1, 2024.