70A-9a-628 - Nonliability and limitation on liability of secured party -- Liability of secondary obligor.
70A-9a-628. Nonliability and limitation on liability of secured party -- Liability ofsecondary obligor.
(1) Unless a secured party knows that a person is a debtor or obligor, knows the identityof 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 hasfiled 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 ofthe person for a deficiency.
(2) 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 isnot affected, because of any act or omission arising out of the secured party's reasonable beliefthat a transaction is not a consumer-goods transaction or a consumer transaction or that goods arenot 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 wasincurred.
(4) A secured party is not liable to any person under Subsection 70A-9a-625(3)(b) for itsfailure to comply with Section 70A-9a-616.
(5) A secured party is not liable under Section 70A-9a-625(3)(b) more than once withrespect to any one secured obligation.
Enacted by Chapter 252, 2000 General Session