(a)Limitation of liability of secured party for noncompliance with chapter. 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:
Terms Used In Tennessee Code 47-9-628
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.
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
(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 chapter; and(2) the secured party’s failure to comply with this chapter 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 § 47-9-625(c)(2) for its failure to comply with § 47-9-616.(e)Limitation of multiple liability for statutory damages. A secured party is not liable under § 47-9-625(c)(2) more than once with respect to any one (1) secured obligation.
