In which of the following accommodations is an accommodation party primarily liable?
A)in a guarantee of payment
B)in a guarantee of collection
C)in a guarantee of demand
D)in a guarantee of promise

Question

Quizplus · Accepted Answer

An accommodation party is primarily liable in a guarantee of payment. This means that they are responsible for paying the debt if the original party fails to do so. In a guarantee of collection, the accommodation party is only responsible if the debt cannot be collected from the original party. In a guarantee of demand, the accommodation party is responsible only if the creditor demands payment and the original party fails to pay. A guarantee of promise is not a recognized type of accommodation party liability.

In Which of the Following Accommodations Is an Accommodation Party