Question

Is the "Accommodation Party" liable even though the holder of the check knew him to be a mere accommodation party who did not receive any value therefor?

a) Yes, an accommodation party is always liable.
b) No, an accommodation party is not liable if the holder is aware of their status.
c) Liability depends on the jurisdiction's laws.
d) The liability of an accommodation party is determined by the check amount.

Answer 1

An accommodation party is always liable for a negotiable instrument, such as a check, under the Uniform Commercial Code, even if the holder is aware of their status as an accommodation party who received no value.a) Yes, an accommodation party is always liable.

Step-by-step explanation:

The liability of an accommodation party for a negotiable instrument such as a check is a topic addressed in commercial law. To answer the question: Is the "Accommodation Party" liable even though the holder of the check knew him to be a mere accommodation party who did not receive any value therefor? The correct answer is (a) Yes, an accommodation party is always liable. According to the Uniform Commercial Code (UCC), which is widely adopted in the United States, an accommodation party is liable to a holder in due course even if the holder knew that the accommodation party received no value in exchange for signing the instrument. The purpose of the accommodation party's signature is to guarantee the instrument, thereby enhancing its creditworthiness.