§ 554.9628 — Nonliability and limitation on liability of secured party — liability of secondary obligor

Iowa § 554.9628

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

obligor.
1. Limitation of liability of secured party for noncompliance with article. 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. Limitation of liability based on status as secured party. 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:
(1) that the person is a debtor or obligor;
(2) the identity of the person; and
(3) 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:
(1) that the person is a debtor; and
(2) the identity of the person.
3. 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:
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 was
incurred.
4. Limitationofliabilityforstatutorydamages. Asecuredpartyisnotliabletoanyperson
under section 554.9625, subsection 3, paragraph “b”, for its failure to comply with section
554.9616.
5. Limitation of multiple liability for statutory damages. A secured party is not liable
under section 554.9625, subsection 3, paragraph “b”, more than once with respect to any one
secured obligation.
6. Exception: limitationofliabilityundersubsections1and2doesnotapply. 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 (1), (2), or (3), 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.