The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 9A V.S.A. § 3-419)
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§ 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 indorser
and, subject to subsection (d) 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.
(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
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 section 3—605 of this title, 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) 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. An accommodated party who pays the instrument has no right of recourse against,
and is not entitled to contribution from, an accommodation party. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)