§ 36-9-628. Nonliability and limitation on liability of secured party; liability of secondary obligor.

301 words·~1 min read·/sc/title-36-commercial-code/chapter-9/commercial-code-secured-transactions/36-9-628·

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

(a)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 chapter; and

(2)the secured party's failure to comply with this chapter does not affect the liability of the person for a deficiency.

(b)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 Section 36-9-625(c)(2) for its failure to comply with