§ 3-415 — Contract of Accommodation Party

New York § 3-415

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Part 4: Liability of Parties
• Art. 3: Commercial Paper

Text

Section 3--415. Contract of Accommodation Party.\n (1) An accommodation party is one who signs the instrument in any\ncapacity for the purpose of lending his name to another party to it.\n (2) When the instrument has been taken for value before it is due the\naccommodation party is liable in the capacity in which he has signed\neven though the taker knows of the accommodation.\n (3) As against a holder in due course and without notice of the\naccommodation oral proof of the accommodation is not admissible to give\nthe accommodation party the benefit of discharges dependent on his\ncharacter as such. In other cases the accommodation character may be\nshown by oral proof.\n (4) An indorsement which shows that it is not in the chain of title is\nnotice of its accommodation character.\n (5) An accommodation party is not liable to the party accommodated,\nand if he pays the instrument has a right of recourse on the instrument\nagainst such party.\n (6) An accommodation party warrants to any subsequent holder who is\nnot the party accommodated and who takes the instrument in good faith\nthat\n (a) all signatures are genuine or authorized; and\n (b) the instrument has not been materially altered; and\n (c) all prior parties had capacity to contract; and\n (d) he has no knowledge of any insolvency proceeding instituted\n with respect to the maker or acceptor or the drawer of an\n unaccepted instrument.\n