                                 CODE OF VIRGINIA

NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF
SECONDARY OBLIGOR (§ 8.9A-628)

a. Limitation of liability of secured party for noncompliance with title.
Subject to subsection (f), 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 title; and

   2. the secured party&#8217;s failure to comply with this title does not affect
   the liability of the person for a deficiency.

b. Limitation of liability based on status as secured party. Subject to
subsection (f), 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&#8217;s liability for a deficiency is not
affected, because of any act or omission arising out of the secured
party&#8217;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&#8217;s belief is based on its reasonable reliance on:

   1. a debtor&#8217;s representation concerning the purpose for which collateral
   was to be used, acquired, or held; or

   2. an obligor&#8217;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 &#xA7; 8.9A-625 (c) (2) for its failure to comply with
&#xA7; 8.9A-616.

e. Limitation of multiple liability for statutory damages. A secured party is
not liable under &#xA7; 8.9A-625 (c) (2) more than once with respect to any one
secured obligation.

f. Limitation of liability under subsections (a) and (b) does not apply.
Subsections (a) and (b) do not apply to limit the liability of a secured party
to a person if, at the time the secured party obtains control of collateral that
is a controllable account, controllable electronic record, or controllable
payment intangible or at the time the security interest attaches to the
collateral, whichever is later:

   1. the person is a debtor or obligor; and

   2. the secured party knows that the information in subsection (b)(1)(A), (B),
   or (C) relating to the person is not provided by the collateral, a record
   attached to or logically associated with the collateral, or the system in
   which the collateral is recorded.

HISTORY: 2000, c. 1007; 2024, c. 652.