Guarantor or Surety of a Negotiable Instrument

The video tutorial introduces the concept of an accommodation party, which is a party that signs an instrument to provide certainty of payment or collection. It explains two types of guarantees: guarantee of payment, where the guarantor pays if the obligor fails, and guarantee of collection, where the party seeking payment may sue the payor and collect from the guarantor if necessary. The tutorial concludes with a brief mention of future material that will delve deeper into the relationships between these parties.

What is the primary role of an accommodation party in an instrument?

• To provide legal advice

• To add certainty of payment or collection

• To negotiate terms

• To act as a witness

In a guarantee of payment, who is responsible if the obligor fails to pay?

• The original obligor

• The accommodation party

• The guarantor

• The payor

What action can the party seeking payment take under a guarantee of collection?

• Cancel the instrument

• Sue the payor for payment

• Transfer the obligation to another party

• Negotiate a new payment plan

If a judgment is received against the payor, who else can it be collected from under a guarantee of collection?

• The accommodation party

• The bank

• The original obligor

• The party guaranteeing collection

What will be introduced later regarding guarantors or sureties?

• In-depth relationships and rules

• Historical context

• Case studies

• New legal terms