Salmond signs a note for the purpose of lending credit to John. Salmond also makes his father Richard sign the note because of his shaky financial condition. This indicates that Richard has signed the note in the capacity of a(n):

Question

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An accommodation party is someone who signs a negotiable instrument (like a note) for the purpose of lending credit to the borrower, but does not receive any direct benefit from the transaction. In this case, Richard has signed the note to help John obtain credit, despite his own shaky financial condition, making him an accommodation party. Salmond would be the drawer, as he is the one initiating the note, and there is no drawee mentioned in the scenario. An indorser would be someone who signs the note after it has already been issued, which does not apply in this situation.

Salmond Signs a Note for the Purpose of Lending Credit