State Codes and Statutes

Statutes > Utah > Title-70a > Chapter-03 > 70a-3-419

70A-3-419. Instruments signed for accommodation.
(1) If an instrument is issued for value given for the benefit of a party to the instrument,the "accommodated party," and another party to the instrument, the "accommodation party," signsthe instrument for the purpose of incurring liability on the instrument without being a directbeneficiary of the value given for the instrument, the instrument is signed by the accommodationparty "for accommodation."
(2) An accommodation party may sign the instrument as maker, drawer, acceptor, orindorser and, subject to Subsection (4), is obliged to pay the instrument in the capacity in whichthe accommodation party signs. The obligation of an accommodation party may be enforcednotwithstanding any statute of frauds and whether or not the accommodation party receivesconsideration for the accommodation.
(3) A person signing an instrument is presumed to be an accommodation party and thereis notice that the instrument is signed for accommodation if the signature is an anomalousindorsement or is accompanied by words indicating that the signer is acting as surety or guarantorwith respect to the obligation of another party to the instrument. Except as provided in Section70A-3-605, the obligation of an accommodation party to pay the instrument is not affected by thefact that the person enforcing the obligation had notice when the instrument was taken by thatperson that the accommodation party signed the instrument for accommodation.
(4) If the signature of a party to an instrument is accompanied by words indicatingunambiguously that the party is guaranteeing collection rather than payment of the obligation ofanother party to the instrument, the signer is obliged to pay the amount due on the instrument to aperson entitled to enforce the instrument only if execution of judgment against the other party hasbeen returned unsatisfied, the other party is insolvent or in an insolvency proceeding, the otherparty cannot be served with process, or it is otherwise apparent that payment cannot be obtainedfrom the other party.
(5) An accommodation party who pays the instrument is entitled to reimbursement fromthe accommodated party and is entitled to enforce the instrument against the accommodatedparty. An accommodated party who pays the instrument has no right of recourse against, and isnot entitled to contribution from, an accommodation party.

Repealed and Re-enacted by Chapter 237, 1993 General Session