Accommodation Party Definition

A person who, without any direct or indirect benefit, compensation, or consideration, co-signs a negotiable instrument as a favor to the person who owes the money and, thus, becomes liable on it to all parties except the accommodated party who, by implication, agrees to pay the instrument and to indemnify the accommodation party for any losses incurred in paying it. This is frequently done when the creditworthiness of the accommodated party does not satisfy the person taking the negotiable instrument or extending the credit. Also called, in the case of a promissory note, an accommodation maker.