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Accommodation Note


A negotiable instrument that is endorsed by a party that does not receive any compensation/reward in return. In other words, the drawer or acceptor adds its signature (endorsement) merely as an accommodation to another party, without charging any fees for so doing. In this sense, the endorser becomes a party to the instrument, enhancing it by its own credit power. However, the rights of an accommodated party are not taken for granted, as the endorser is under no liability to the party benefited, as no consideration is paid in return. Furthermore, companies cannot legally make accommodation notes.

This instrument is also known as an accommodation paper.



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