1. (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:

   1. (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
   2. (b) the secured party's failure to comply with this chapter does not affect the liability of the person for a deficiency.

2. (2) Subject to Subsection (6), a secured party is not liable because of its status as secured party:

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

      1. (i) that the person is a debtor or obligor;
      2. (ii) the identity of the person; and
      3. (iii) how to communicate with the person; or

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

      1. (i) that the person is a debtor; and
      2. (ii) the identity of the person.

3. (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:

   1. (a) a debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or
   2. (b) an obligor's representation concerning the purpose for which a secured obligation was incurred.
4. (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. (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. (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:

   1. (a) the person is a debtor or obligor; and
   2. (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