{"data":{"id":"us-ky/krs-355.9-628","jurisdiction":"us-ky","citation":"KRS 355.9-628","heading":"Nonliability and limitation on liability of secured party -- Liability of","body":"secondary obligor.\n(1) Subject to subsection (6) of this section, unless a secured party knows that a person\nis a debtor or obligor, knows the identity of the p erson, and knows how to\ncommunicate with the person:\n(a) The secured party is not liable to the person, or to a secured party or\nlienholder that has filed a financing statement against the person, for failure to\ncomply with this article; and\n(b) The secure d party's failure to comply with this article does not affect the\nliability of the person for a deficiency.\n(2) Subject to subsection (6) of this section, a secured party is not liable because of its\nstatus as secured party:\n(a) To a person that is a debtor or obligor, unless the secured party knows:\n1. That the person is a debtor or obligor;\n2. The identity of the person; and\n3. How to communicate with the person; or\n(b) To a secured party or lienholder that has filed a financing statement against a\nperson, unless the secured party knows:\n1. That the person is a debtor; and\n2. The identity of the person.\n(3) A secured party is not liable to any person, and a person's liabi lity for a deficiency\nis not affected, because of any act or omission arising out of the secured party's\nreasonable belief that a transaction is not a consumer -goods transaction or a\nconsumer transaction or that goods are not consumer goods, if the secured  party's\nbelief is based on its reasonable reliance on:\n(a) A debtor's representation concerning the purpose for which collateral was to\nbe used, acquired, or held; or\n(b) An obligor's representation concerning the purpose for which a secured\nobligation was incurred.\n(4) A secured party is not liable to any person under KRS 355.9 -625(3)(b) for its\nfailure to comply with KRS 355.9-616.\n(5) A secured party is not liable under KRS 355.9 -625(3)(b) more than once with\nrespect to any one (1) secured obligation.\n(6) Subsections (1) and (2) of this section do not apply to limit the liability of a secured\nparty to a person if, at the time the secured party obtains control of collateral that is\na controllable account, controllable electronic record, or controllable pa yment\nintangible or at the time the security interest attaches to the collateral, whichever is\nlater:\n(a) The person is a debtor or obligor; and\n(b) The secured party knows that the information in subsection (2)(a)1., 2., or 3.\nof this section relating to the person is not provided by the collateral, a record\nattached to or logically associated with the collateral, or the system in which\nthe collateral is recorded.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55717","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:49Z","sha256":"0be11ac8eda4531b4d71f8d1babb067f4499a9e87c584f89bad9f31459af81e0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-627","next":"us-ky/krs-355.9-701"},"notice":"GroundRules: Original legal text. Not legal advice."}