Accomodation Party Law and Legal Definition

Accommodation party refers to a person who, without recompense or other benefit, signs a negotiable instrument for the purpose of being a surety for accommodated party to the instrument. The accommodation party can sign in any capacity. An accommodation party is liable to all parties except the accommodated party, who impliedly agrees to pay the note or draft and to indemnify the accommodation party for all losses incurred having to pay it.