(a)Limitation of liability of secured party for noncompliance with division.--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 this division; and
(2)the secured party's failure to comply with this division does not affect the liability of the person for a deficiency.
(b)Limitation of liability based on status as secured party.--Subject to subsection (f), a secured party is not liable because of its status as secured party to any of the following:
(1)A person that is a debtor or obligor unless t
Free access — add to your briefcase to read the full text and ask questions with AI
(a) Limitation of liability of secured party for noncompliance with division.--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 this division; and
(2) the secured party's failure to comply with this division does not affect the liability of the person for a deficiency.
(b) Limitation of liability based on status as secured party.--Subject to subsection (f), a secured party is not liable because of its status as secured party to any of the following:
(1) A person that is a debtor or obligor unless the secured party knows:
(i) that the person is a debtor or obligor;
(ii) the identity of the person; and
(iii) how to communicate with the person.
(2) A secured party or lienholder that has filed a financing statement against a person unless the secured party knows:
(i) that the person is a debtor; and
(ii) the identity of the person.
(c) 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:
(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) Limitation of liability for statutory damages.--A secured party is not liable to any person under section 9625(c)(2) (relating to remedies for secured party's failure to comply with division) for its failure to comply with section 9616 (relating to explanation of calculation of surplus or deficiency).
(e) Limitation of multiple liability for statutory damages.--A secured party is not liable under section 9625(c)(2) more than once with respect to any one secured obligation.
(f) Exception: limitation of liability under subsections (a) and (b) does not apply.--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) 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.