(a) Limitation of liability of secured party for noncompliance with Article. - 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.
(b) Limitation of liability based on status as secured party. - 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) 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 G.S. 25-9-625(c)(2) for its failure to comply with G.S. 25-9-616.
(e) Limitation of multiple liability for statutory damages. - A secured party is not liable under G.S. 25-9-625(c)(2) more than once with respect to any one secured obligation. (2000-169, s. 1.)
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Last modified: March 23, 2014