1. (a) Subject to subsection (f), 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:
2. (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

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

   1. (b) Subject to subsection (f), a secured party is not liable because of its status as secured party:

4. (1) To a person that is a debtor or obligor, unless the secured party knows:

   1. (A) That the person is a debtor or obligor;
   2. (B) The identity of the person; and
   3. (C) How to communicate with the person; or

5. (2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

   1. (A) That the person is a debtor; and
   2. (B) The identity of the person.
   3. (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:
6. (1) A debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or

7. (2) An obligor's representation concerning the purpose for which a secured obligation was incurred.

   1. (d) A secured party is not liable to any person under § 57A-9-625(c)(2) for its failure to comply with § 57A-9-616.
   2. (e) A secured party is not liable under § 57A-9-625(c)(2) more than once with respect to any one secured obligation.
   3. (f) Subsections (a) and (b) 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:
8. (1) The person is a debtor or obligor; and
9. (2) The secured party knows that the information in subsection (b)(1)(A), (B), or (C) 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.

Source: SL 2000, ch 231 ; SL 2024, ch 198 , § 92.