Nonliability and limitation on liability of secured party; exception for controllable accounts, controllable electronic records, and controllable payment intangibles
Ind. Code § 26-1-9.1-628
in effectSec. 628. (a) 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 IC 26-1-9.1; and
(2) the secured party's failure to comply with IC 26-1-9.1 does not affect the liability of the person for a deficiency.
(b) 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) 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) A secured party is not liable to any person under IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
(e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more than once with respect to any one secured obligation.
(f) 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)(1)(B), or (b)(1)(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.
As added by P.L.57-2000, SEC.45. Amended by P.L.199-2023, SEC.88.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/26Fetched: 10/17/2026