Accomodation Indorsement Law and Legal Definition

Accomodation indorsement is an indorsement to an instrument that is made by a third party. The third party acts as a surety for another person who remains primarily liable. The indorser does not derive any use or benefit from the paper.

In an accommodation indorsement, the third person makes the indorsement for the holder’s benefit or to enable the maker to obtain money or credit on it. Unless otherwise explained, an accommodation indorsement is understood as a loan of the indorser’s credit without restriction.