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

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

A secured party is not liable because of its status as secured party:

To a person that is a debtor or obligor, unless the secured party knows:

That the person is a debtor or obligor;

The identity of the person; and

How to communicate with the person; or

To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

That the person is a debtor; and

The identity of the person.

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 debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or

An obligor's representation concerning the purpose for which a secured obligation was incurred.

A secured party is not liable to any person under Section 75-9-625(c)(2) for its failure to comply with Section 75-9-616.

A secured party is not liable under Section 75-9-625(c)(2) more than once with respect to any one (1) secured obligation.


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