§ 25-9-628. Nonliability and limitation on liability of secured party; liability of secondary obligor. - North Carolina Statutes

§ 25‑9‑628. Nonliability and limitation on liability of secured party; liability ofsecondary obligor.

(a)        Limitation ofliability of secured party for noncompliance with Article. – Unless a securedparty knows that a person is a debtor or obligor, knows the identity of theperson, and knows how to communicate with the person:

(1)        The secured party isnot liable to the person, or to a secured party or lienholder that has filed afinancing statement against the person, for failure to comply with this Article;and

(2)        The secured party'sfailure to comply with this Article does not affect the liability of the personfor a deficiency.

(b)        Limitation ofliability based on status as secured party. – A secured party is not liablebecause of its status as secured party:

(1)        To a person that isa debtor or obligor, unless the secured party knows:

a.         That the person is adebtor or obligor;

b.         The identity of theperson; and

c.         How to communicatewith the person; or

(2)        To a secured partyor lienholder that has filed a financing statement against a person, unless thesecured party knows:

a.         That the person is adebtor; and

b.         The identity of theperson.

(c)        Limitation ofliability if reasonable belief that transaction not a consumer‑goodstransaction or consumer transaction. – A secured party is not liable to anyperson, and a person's liability for a deficiency is not affected, because ofany act or omission arising out of the secured party's reasonable belief that atransaction is not a consumer‑goods transaction or a consumer transactionor that goods are not consumer goods, if the secured party's belief is based onits reasonable reliance on:

(1)        A debtor'srepresentation concerning the purpose for which collateral was to be used,acquired, or held; or

(2)        An obligor'srepresentation concerning the purpose for which a secured obligation wasincurred.

(d)        Limitation ofliability for statutory damages. – A secured party is not liable to any personunder G.S. 25‑9‑625(c)(2) for its failure to comply with G.S. 25‑9‑616.

(e)        Limitation ofmultiple liability for statutory damages. – A secured party is not liable underG.S. 25‑9‑625(c)(2) more than once with respect to any one securedobligation. (2000‑169, s. 1.)