Harmful guarantees may alter the conditions of the unit, including: If the original borrower is unable to pay the loan or be late, the loan holder expects the host to assume responsibility for the repayment. It is then up to the co-signer to recover the money from the original borrower. In essence, you agree to give your own good credit rating for another`s financial agreement. This can lead to a personal risk. They accept responsibility for another person`s debts if they do not pay. Normally, you would only do it for a friend, relative or associate. There is no use for the hosting part: this does not mean payment or compensation. The hosting company is responsible if the hosted party (the person in need of accommodation) is late. (e) Where the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or that the signatory signs the instrument as a hosting company in another way that does not clearly indicate the intention to guarantee recovery rather than payment, the signatory is required to pay a person the amount owed on the amount of the authorization. which is authorized to enforce the instrument in the same circumstances as the hosted party, without the person authorized to enforce the act having previously used the hosted part. (a) When an instrument is issued for a given value to a party to the instrument (“hosted part”) and another party to the instrument (“hosting part”) signs the instrument for the purposes of liability of the instrument without being a direct beneficiary of the value indicated for the instrument, the instrument is signed by the hosting company “for accommodation”. Although parties to accommodation are sufficiently common, it is not mandatory to accept due diligence, as personal risk may be high. c) A person who signs an instrument is considered a hosting partner in a dispute, and it is recalled that the hosting instrument is signed if the signature is an anomalous undertaking or if there are words that indicate that the signatory is guarantor or guarantor of the commitment of another party to the instrument.
With the exception of section 3-605, the obligation to pay for the instrument by a host is not affected, as the person performing the obligation has indicated, upon obtaining the deed, that the hosting company has signed the accommodation instrument. The hosting company is not exempt from service if: d) If the signature of a part of an instrument is accompanied by words clearly indicating that the party guarantees forfeiture instead of paying the commitment of another party to the act, the signatory is obliged to pay the amount owed on the deed only to a person entitled to carry out the act if (i) the execution of the judgment against the other party has been rendered without satisfaction. (ii) the other party is insolvent or engaged in insolvency proceedings, (iii) cannot be served on the other party, or (iv) it appears otherwise that payment cannot be obtained from the other party. (f) A hosting company that pays for the deed is entitled to reimbursement by the hosted party and has the right to enforce the act against the hosted party. In regular circumstances, a hosting company may benefit from relief which obliges the hosted party to fulfil its obligations on the instrument.