Payment Systems: Instruments Signed for Accommodation Podcast
The topic of this podcast is the obligations and rights of accommodation parties and accommodated parties under Article 3 of the Uniform Commercial Code (U.C.C.), including issues that arise with respect to the settlement of the obligation of the primary obligor. Guarantee transactions present themselves frequently in practice and, because issues can arise under Article 3, the issue sometimes comes up on the bar examination in terms of liability. The primary code provisions covered in this podcast are §§ 3-419 and 3-605. Important terminology will also be discussed. At the conclusion of this podcast, you should be able to (1) describe who are the parties when there is an accommodation; and (2) describe when an accommodation party will have liability on an instrument, particularly when there is a settlement.