Asked by Sophie Hansen on May 20, 2024
Verified
How can an accommodation party sign an instrument?
A) As a maker or a drawer,but not as an acceptor or an endorser.
B) As an acceptor or an endorser,but not as a maker or a drawer.
C) As a maker or an acceptor,but not as a drawer or an endorser.
D) As a drawer or an endorser,but not as a maker or an acceptor.
E) As a maker,a drawer,an acceptor,or an endorser.
Accommodation Party
is an individual who signs a negotiable instrument on behalf of another party, guaranteeing payment without receiving personal benefit.
Maker
A person who has promised to pay a set sum to the holder of a promissory note or certificate of deposit.
Drawer
The person who writes or issues a bill of exchange, cheque, or draft, instructing a drawee to pay a specified sum to a payee.
- Identifying the variations between parties such as makers, drawers, endorsers, and accommodation parties in relation to negotiable instruments.
Verified Answer
DA
Dorothy AntoineMay 22, 2024
Final Answer :
E
Explanation :
Accommodation parties may be primarily or secondarily liable for an instrument and can sign as makers,drawers,acceptors,or endorsers.However,accommodation parties more frequently sign as makers or endorsers.
Learning Objectives
- Identifying the variations between parties such as makers, drawers, endorsers, and accommodation parties in relation to negotiable instruments.