§ 26-1-9.1-628 — Nonliability and limitation on liability of secured party; exception for controllable accounts, controllable electronic records, and controllable payment intangibles

Indiana § 26-1-9.1-628

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 9.1: Secured Transactions

Text

(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:
(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 IC 26-1-9.1; and
(2) the secured party's failure to comply with IC 26-1-9.1 does not
affect the liability of the person for a deficiency.
(b) Subject to subsection (f), 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:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) 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:
(A) that the person is a debtor; and
(B) the identity of the person.
(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:
(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) A secured party is not liable to any person under IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
(e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more
than once with respect to any one secured obligation.
(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:
(1) the person is a debtor or obligor; and
(2) the secured party knows that the information in subsection
(b)(1)(A), (b)(1)(B), or (b)(1)(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.

Legislative History

As added by P.L.57-2000, SEC.45. Amended by P.L.199-2023, SEC.88.