Colorado Code
Part 6 - Default
§ 4-9-628. Nonliability and Limitation on Liability of Secured Party - Liability of Secondary Obligor




(1) To a person that is a debtor or obligor, unless the secured party knows:


(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.


(1) A record authenticated by the debtor concerning the purpose for which collateral was to be used, acquired, or held, or indicating that collateral is not a consumer deposit account; or
(2) A record authenticated by the obligor concerning the purpose for which a secured obligation was incurred.





Source: L. 2001: Entire article R&RE, p. 1421, § 1, effective July 1. L. 2002: (d)(2) repealed, p. 939, § 9, effective August 7.
Editor's note - Colorado legislative change: Colorado substituted the phrase "A record authenticated by the debtor" for the phrase "A debtor's representation" and added the phrase "or indicating that collateral is not a consumer deposit account" in subsection (c)(1), substituted the phrase "A record authenticated by the obligor" for the phrase "An obligor's representation" in subsection (c)(2), and did not adopt subsection (d) of the uniform act. The uniform act's subsection (e) states: "A secured party is not liable under section 4-9-625(c)(2) more than once with respect to any one secured obligation."




If a secured party reasonably, but mistakenly, believes that a consumer transaction or consumer-goods transaction is a non-consumer transaction or non-consumer-goods transaction, and if the secured party's belief is based on its reasonable reliance on a representation of the type specified in subsection (c)(1) or (c)(2), then this Article should be applied as if the facts reasonably believed and the representation reasonably relied upon were true. For example, if a secured party reasonably believed that a transaction was a non-consumer transaction and its belief was based on reasonable reliance on the debtor's representation that the collateral secured an obligation incurred for business purposes, the secured party is not liable to any person, and the debtor's liability for a deficiency is not affected, because of any act or omission of the secured party which arises out of the reasonable belief. Of course, if the secured party's belief is not reasonable or, even if reasonable, is not based on reasonable reliance on the debtor's representation, this limitation on liability is inapplicable.

Structure Colorado Code

Colorado Code

Title 4 - Uniform Commercial Code

Article 9 - Secured Transactions

Part 6 - Default

§ 4-9-601. Rights After Default - Judicial Enforcement - Consignor or Buyer of Accounts, Chattel Paper, Payment Intangibles, or Promissory Notes

§ 4-9-602. Waiver and Variance of Rights and Duties

§ 4-9-603. Agreement on Standards Concerning Rights and Duties

§ 4-9-604. Procedure if Security Agreement Covers Real Property or Fixtures

§ 4-9-605. Unknown Debtor or Secondary Obligor

§ 4-9-606. Time of Default for Agricultural Lien

§ 4-9-607. Collection and Enforcement by Secured Party

§ 4-9-608. Application of Proceeds of Collection or Enforcement - Liability for Deficiency and Right to Surplus

§ 4-9-609. Secured Party's Right to Take Possession After Default

§ 4-9-610. Disposition of Collateral After Default

§ 4-9-611. Notification Before Disposition of Collateral

§ 4-9-612. Timeliness of Notification Before Disposition of Collateral

§ 4-9-613. Contents and Form of Notification Before Disposition of Collateral: General

§ 4-9-614. Contents and Form of Notification Before Disposition of Collateral: Consumer-Goods Transaction

§ 4-9-615. Application of Proceeds of Disposition; Liability for Deficiency and Right to Surplus

§ 4-9-616. Explanation of Calculation of Surplus or Deficiency - Definitions

§ 4-9-617. Rights of Transferee of Collateral

§ 4-9-618. Rights and Duties of Certain Secondary Obligors

§ 4-9-619. Transfer of Record or Legal Title

§ 4-9-620. Acceptance of Collateral in Full or Partial Satisfaction of Obligation - Compulsory Disposition of Collateral

§ 4-9-621. Notification of Proposal to Accept Collateral

§ 4-9-622. Effect of Acceptance of Collateral

§ 4-9-623. Right to Redeem Collateral

§ 4-9-624. Waiver

§ 4-9-625. Remedies for Secured Party's Failure to Comply With Article

§ 4-9-626. Action in Which Deficiency or Surplus Is in Issue

§ 4-9-627. Determination of Whether Conduct Was Commercially Reasonable

§ 4-9-628. Nonliability and Limitation on Liability of Secured Party - Liability of Secondary Obligor

§ 4-9-629. Secured Party's Liability When Taking Possession After Default - Legislative Declaration - Fund