Asked by Brian Williams on Apr 24, 2024

If an accommodation party pays a note for an accommodated party, the accommodation party has a right of action against the accommodated party to recover the money paid.

Accommodation Party

A party who signs an instrument to provide credit for another party who has also signed the instrument.

Recover Money

The act or process of legally reclaiming monetary losses or damages through judicial or administrative procedures.

Accommodated Party

In finance, the party for whom a loan or credit extension is made, usually facilitated by the guarantee or cosigning by another party.

Acknowledge the scenarios in which endorsers and accommodation parties, among others involved with a negotiable instrument, are absolved of responsibility.
Recognize the requirements for ratification of unauthorized actions and the impact of such actions on liability.

Learning Objectives

Acknowledge the scenarios in which endorsers and accommodation parties, among others involved with a negotiable instrument, are absolved of responsibility.
Recognize the requirements for ratification of unauthorized actions and the impact of such actions on liability.