Calvin,a college student,wants to purchase an automobile on credit from Irontilt Motors.He does not have sufficient income or the credit history to justify the extension of credit to him alone.Calvin asks his father to cosign a note to Irontilt Motors,which his father agrees to.What role does Calvin's father fulfill here so that Calvin can buy the car?
A) an accommodation party
B) an agent
C) a principal
D) a qualified indorser

Question

Quizplus · Accepted Answer

Calvin's father is acting as an accommodation party by cosigning the note, which means he is agreeing to be responsible for the debt if Calvin is unable to pay. This allows Irontilt Motors to extend credit to Calvin based on the father's credit history and income, rather than solely on Calvin's limited credit and income.

Calvin,a College Student,wants to Purchase an Automobile on Credit from Irontilt