This text of North Dakota § 41-09-123 ((9-628) Nonliability and limitation on liability of secured party - Liability of secondary obligor) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
secondary obligor.
1. Subject to subsection 5, 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 chapter; and
b. The secured party's failure to comply with this chapter does not affect the liability
of the person for a deficiency.
2. Subject to subsection 5, 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
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secondary obligor.
1. Subject to subsection 5, 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 chapter; and
b. The secured party's failure to comply with this chapter does not affect the liability
of the person for a deficiency.
2. Subject to subsection 5, 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. 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. A secured party is not liable under subdivision b of subsection 3 of section 41-09-120
more than once with respect to any one secured obligation.
5. 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 subdivision a of subsection 2
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.