North Carolina General Statutes 25-9-628. 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
Terms Used In North Carolina General Statutes 25-9-628
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(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 N.C. Gen. Stat. § 25-9-625(c)(2) for its failure to comply with N.C. Gen. Stat. § 25-9-616.
(e) Limitation of multiple liability for statutory damages. – A secured party is not liable under N.C. Gen. Stat. § 25-9-625(c)(2) more than once with respect to any one secured obligation. (2000-169, s. 1.)