Asked by Rebecca Dooley on Jun 04, 2024
Verified
An accommodation maker is not liable on a note since he only agreed to sign as a favor to the maker.
Accommodation Maker
A person who signs a loan instrument to help someone obtain credit but who has no direct benefit from the loan.
Liable
Subject to legal obligation, where an individual or entity is responsible for fulfilling certain duties or compensating for harm caused to others.
- Identify the principles governing the liability of accommodation parties.
Verified Answer
BK
Brenden KephartJun 09, 2024
Final Answer :
False
Explanation :
An accommodation maker is liable on the note to a holder for value, even though they signed as a favor, because they intend to guarantee the note's payment.
Learning Objectives
- Identify the principles governing the liability of accommodation parties.