N.Y. Uniform Commercial Code Law Section 9-628
Nonliability and Limitation on Liability of Secured Party

  • Liability of Secondary Obligor
Section 9--628. Nonliability and Limitation on Liability of Secured Party; Liability of Secondary Obligor.

(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 Section 9--625 (c) (2) for its failure to comply with Section 9--616.

(e)

Limitation of multiple liability for statutory damages. A secured party is not liable under Section 9--625 (c) (2) more than once with respect to any one secured obligation.

Source: Section 9-628 — Nonliability and Limitation on Liability of Secured Party; Liability of Secondary Obligor, https://www.­nysenate.­gov/legislation/laws/UCC/9-628 (updated Sep. 22, 2014; accessed Oct. 26, 2024).

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Accessed:
Oct. 26, 2024

Last modified:
Sep. 22, 2014

§ 9-628’s source at nysenate​.gov

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