Nonliability and limitation on liability of secured party; liability of secondary obligor

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47-9628. Nonliability and limitation on liability of secured party; liability of secondary obligor

A. 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 chapter; and

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

B. 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 section 47-9625, subsection C, paragraph 2 for its failure to comply with section 47-9616.

E. A secured party is not liable under section 47-9625, subsection C, paragraph 2 more than once with respect to any one secured obligation.


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