An accommodation party and a co-maker of a note have the same liability on an instrument.

Question

Quizplus · Accepted Answer

An accommodation party is liable to the holder of the instrument as if they were a primary party, even though they receive no direct benefit, acting merely to lend their credit to another party. A co-maker, on the other hand, is directly obligated to pay the note and typically benefits from the loan. Their liabilities differ in terms of their roles and obligations regarding the note.

An Accommodation Party and a Co-Maker of a Note Have