38A: Liability of accommodation party and position of accommodation party — Negotiable Instruments Act, 1881

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Liability of accommodation party and position of accommodation party.—(1) An accommodation party is liable on a negotiable instrument to a holder in due course, notwithstanding that when such holder took the instrument he knew such party to be an accommodation party. (2) An accommodation party to a negotiable instrument, if he has paid the amount thereof, is entitled to recover such amount from the party accommodated.]

Effective date: 1881-12-09

Related sections

38: Prior party a principal in respect on each subsequent party 39: Suretyship 37: Maker, drawer and acceptor principals 40: Discharge of indorser’s liability 36: Liability of prior parties to holder in due course 41: Acceptor bound although indorsement forged

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