Legal Definitions - accommodated party

Definition: An accommodated party is a party that benefits from the actions of an accommodation party who signs a contract and assumes liability on their behalf.

For example, if a friend asks you to co-sign a loan for them because they have poor credit, your friend is the accommodated party and you are the accommodation party. If your friend defaults on the loan, you will be held liable for the debt.

Another example is when a business owner asks their supplier to extend payment terms for a large order. The supplier may agree to do so if the business owner can provide an accommodation party to guarantee payment. In this case, the business owner is the accommodated party and the accommodation party is the one assuming liability for the payment.

These examples illustrate how an accommodated party benefits from the actions of an accommodation party who assumes risk and liability on their behalf.