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Minnesota Legislature

Office of the Revisor of Statutes

336.3-419 MS 1990 [Repealed, 1992 c 565 s 114]
336.3-419 INSTRUMENTS SIGNED FOR ACCOMMODATION.
(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
endorser 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
endorsement 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 section
336.3-605, 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) 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 obligated 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.
(f) 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.
History: 1992 c 565 s 59; 2003 c 81 art 1 s 10