accommodation bill

A bill of exchange that a party has signed without consideration (compensation) and for the accommodation of another; the latter should find the funds for payment when the bill becomes due, but the holder for value is entitled to sue the accommodating party, though he or she knows of the want of consideration.

The fact that an acceptor is an ‘accommodation party’, though no defence to an action by another party, entitles the acceptor to what he or she would not usually have, a recourse to the drawer he or she accommodated.