70A-9a-628. Nonliability and limitation on liability of secured party -- Liability of secondary obligor.

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

Effective 5/6/2026

(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 chapter; and

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

(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

(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.

(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

(b)an obligor's representation concerning the purpose for which a secured obligation was incurred.

(4)A secured party is not liable to any person under Subsection 70A-9a-625(3)(b) for its failure to comply with Section 70A-9a-616 .

(5)A secured party is not liable under Section 70A-9a-625(3)(b) more than once with respect to any one secured obligation.

(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

(b)the secured party knows that the information in Subsection (2)(a)(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.

Amended by Chapter 322 , 2026 General Session