(a) If an instrument is issued for value given for the benefit of a party to the
instrument ("accommodated party") and another party to the instrument
("accommodation party") signs the instrument for the purpose of incurring liability
on the instrument without being a direct beneficiary of the value given for the
instrument, the instrument is signed by the accommodation party "for
accommodation".
(b) An accommodation party may sign the instrument as maker, drawer,
acceptor, or indorser and, subject to subsection (d), is obliged to pay the instrument
in the capacity in which the accommodation party signs. The obligation of an
accommodation party may be enforced notwithstanding any statute of frauds and
whether or not the accommodation party receives consideration for the
accommodation.
(c) A person signing an instrument is presumed to be an accommodation
party and there is notice that the instrument is signed for accommodation if the
signature is an anomalous indorsement or is accompanied by words indicating that
the signer is acting as surety or guarantor with respect to the obligation of another
party to the instrument. Except as provided in § 3-605, the obligation of an
accommodation party to pay the instrument is not affected by the fact that the person
enforcing the obligation had notice when the instrument was taken by that person
that the accommodation party signed the instrument for accommodation.
(d) If the signature of a party to an instrument is accompanied by words
indicating unambiguously that the party is guaranteeing collection rather than
payment of the obligation of another party to the instrument, the signer is obliged to
pay the amount due on the instrument to a person entitled to enforce the instrument
only if (i) execution of judgment against the other party has been returned
unsatisfied, (ii) the other party is insolvent or in an insolvency proceeding, (iii) the
other party cannot be served with process, or (iv) it is otherwise apparent that
payment cannot be obtained from the other party.
(e) An accommodation party who pays the instrument is entitled to
reimbursement from the accommodated party and is entitled to enforce the
instrument against the accommodated party. An accommodated party who pays the
instrument has no right of recourse against, and is not entitled to contribution from,
an accommodation party.‹ Prev All Maryland sections Next ›
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