Section 9-1628 - [Effective 7/1/2025] Nonliability and limitation on liability of secured party; liability of secondary obligor(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(b). The secured party's failure to comply with this Article 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 [1999, c. 699, Pt. A, §2(NEW); 1999, c. 699, Pt. A, §4(AFF).](b). An obligor's representation concerning the purpose for which a secured obligation was incurred. [1999, c. 699, Pt. A, §2(NEW); 1999, c. 699, Pt. A, §4(AFF).] [1999, c. 699, Pt. A, §2(NEW); 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. [1999, c. 699, Pt. A, §2(NEW); 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. [1999, c. 699, Pt. A, §2(NEW); 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(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. Amended by 2024, c. 669,§ A-168, eff. 7/1/2025.Amended by 2024, c. 669,§ A-167, eff. 7/1/2025.Amended by 2024, c. 669,§ A-166, eff. 7/1/2025.1999, c. 699, §A2 (NEW) . 1999, c. 699, §A4 (AFF) .This section is set out more than once due to postponed, multiple, or conflicting amendments.