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单词 accommodation party
释义 DictionarySeesurety

accommodation party


Related to accommodation party: accommodation endorser

Accommodation Party

One who signs a Commercial Paper for the purpose of lending his or her name and credit to another party to the document—the accommodated party—to help that party obtain a loan or an extension of credit.

A person wanting to obtain a car loan, for example, may offer a finance company a promissory note for the amount of the requested loan, promising to repay the amount over a number of years. If the company does not consider the person a good credit risk (one who will be able to repay the loan), it will request that someone else sign the note to ensure that the company will be repaid. Such a person may be an accommodation endorser, because he or she endorses the note after it has been completed, or an accommodation maker, because he or she must sign the note with the accommodation party.

An accommodation party is liable to the person or business that extended credit to theaccommodation party, but not to the accommodated party. The accommodation party is liable for the amount specified on the accommodation paper. If an accommodation party repays the debt, he or she can seek reimbursement from the accommodated party.

accommodation party

see ACCOMMODATION BILL.

accommodation party


accommodation party

One who signs a promissory note even though he or she receives no direct economic benefit from it.Typically, a financially strong party who must add his or her name to the transaction or the true borrower would not qualify for the loan. There is a widespread and mistaken belief among accommodation parties that they simply signed their name but will not be held responsible if the loan goes into default. This is incorrect; they will be held liable for the full amount of the loan if there is a default.(Do not confuse with accommodating party.)

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更新时间:2025/3/18 0:54:55