How Do You Spell ACCOMMODATION PARTY?

Pronunciation: [ɐkˌɒmədˈe͡ɪʃən pˈɑːti] (IPA)

The term "accommodation party" refers to a person or business entity that enters into a financial agreement, such as a loan, bill of exchange, or promissory note, to provide financial backing for another party. The spelling of "accommodation party" is phonetically represented as əˌkɒməˈdeɪʃən ˈpɑːti. The word is divided into four syllables with the primary stress on the third syllable. The word's spelling is derived from Latin and French roots, with an added Middle English suffix "-tion" representing a state of being or act of doing.

Meaning and Definition
Etymology
Basic Check Advanced Check

ACCOMMODATION PARTY Meaning and Definition

  1. An accommodation party is a term used in financial and legal contexts to describe a person or entity who agrees to lend their name or creditworthiness to support another individual or organization's financial obligations. Also known as a "surety" or a "guarantor," an accommodation party assumes the responsibility of repaying a loan or assuming liability for a debt in the event that the primary borrower fails to fulfill their obligations.

    The role of an accommodation party is to provide additional security and credibility to a loan transaction, offering assurance to lenders that their funds will be repaid. Accommodation parties are commonly sought in situations where the primary borrower may lack sufficient credit history, have a low credit score, or possess limited collateral to secure the loan.

    Being an accommodation party entails significant risk, as they become legally bound to cover the borrower's debts or obligations if they default. They are required to honor repayments or other obligations promptly to avoid any penalties or damage to their creditworthiness. Accommodation parties, being third-party guarantors, often charge a fee or receive compensation for undertaking this financial risk on behalf of the borrower.

    It is important for both the accommodation party and the primary borrower to fully understand the terms and conditions of their agreement, in order to ensure proper adherence to the agreement and protect their respective interests.

Etymology of ACCOMMODATION PARTY

The term "accommodation party" does not have a specific etymology, as it is a combination of two separate words.

1. Accommodation: The word "accommodation" originates from the Latin word "accommodare", which means "to fit or adjust". It entered the English language through Old French and Middle English, with the meaning of providing lodging or adjusting to another's needs.

2. Party: The word "party" has its roots in the Old French word "partie", meaning "part" or "side". It evolved in Middle English to refer to a group of people united for a particular purpose or to celebrate an event.

The term "accommodation party" is not commonly used in general parlance but is a legal term.