There is a newer version of the Kentucky Revised Statutes
2009 Kentucky Revised Statutes
Article 3 Negotiable Instruments
355.3.419 Instruments signed for accommodation.
Download pdfparty") 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." (2) An accommodation party may sign the instrument as maker, drawer, acceptor, or indorser and, subject to subsection (4) of this section, 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. (3) 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 KRS 355.3-605, 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. (4) 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:
(a) Execution of judgment against the other party has been returned unsatisfied;
(b) The other party is insolvent or in an insolvency proceeding;
(c) The other party cannot be served with process; or
(d) It is otherwise apparent that payment cannot be obtained from the other party. (5) If the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or the signer signs the instrument as an
accommodation party in some other manner that does not unambiguously indicate
an intention to guarantee collection rather than payment, the signer is obliged to pay
the amount due on the instrument to a person entitled to enforce the instrument in
the same circumstances as the accommodated party would be obliged, without prior
resort to the accommodated party by the person entitled to enforce the instrument. (6) 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. In proper circumstances, an accommodation party may obtain
relief that requires the accommodated party to perform its obligations on the
instrument. An accommodated party that pays the instrument has no right of
recourse against, and is not entitled to contribution from, an accommodation party. Effective: July 12, 2006 History: Amended 2006 Ky. Acts ch. 242, sec. 41, effective July 12, 2006. -- Repealed and reenacted 1996 Ky. Acts ch. 130, sec. 57, effective January 1, 1997. -- Created
1958 Ky. Acts ch. 77, sec. 3-419, effective July 1, 1960.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.