Title 6A
Uniform Commercial Code

Chapter 9
Secured Transactions

Part 6
Default

Subpart 2
Noncompliance with Chapter

§ 6A-9-628. Nonliability and limitation on liability of secured party — Liability of secondary obligor.

(a) Limitation of liability of secured party for noncompliance with chapter. 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 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) Limitation of liability based on status as secured party. 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:

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

(ii) The identity of the person; and

(iii) 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:

(i) That the person is a debtor; and

(ii) The identity of the person.

(c) Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer transaction. 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) Limitation of liability for statutory damages. A secured party is not liable to any person under § 6A-9-625(c)(2) for its failure to comply with § 6A-9-616.

(e) Limitation of multiple liability for statutory damages. A secured party is not liable under § 6A-9-625(c)(2) more than once with respect to any one secured obligation.

(f) Exception: Limitation of liability under subsections (a) and (b) of this section does not apply. 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 subsection (b)(1)(i), (ii), or (iii) 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.