Gabrielle borrows $1,000 from Frank to pay for school and gives Frank a note for that amount. Frank wants Gabrielle's father to sign as an accommodation party. Gabrielle's father signs below Gabrielle's signature on the fall of the note. Which of the following statements is true of this case?
A) Only Gabrielle has primary liability as a maker.
B) Only Gabrielle's father has primary liability as an accommodation maker.
C) Gabrielle and her father have the same contractual liability.
D) Gabrielle has primary liability, and her father has secondary liability.

Question

Quizplus · Accepted Answer

An accommodation party is a person who signs a negotiable instrument for the purpose of lending her credit to another party to the instrument but is not a direct beneficiary of the value given for the instrument. In the above case, Gabrielle and her father have the same contractual liability.

Gabrielle Borrows $1,000 from Frank to Pay for School and Gives