What is the role of a guarantor or surety of a negotiable instrument?

A guarantor (also known as a surety or co-signor) serves to add certainty of payment of a negotiable instrument. A guarantor of a note or draft is an accommodation party who signs the instrument as an indorser.

What are the Types of Guarantor?

 There are a couple of forms of guarantor, as follows:

• Guarantor of Payment
• Guarantor of Collection

What is a Guarantor of Payment?

A co-maker’s accommodation indorsement guarantees payment. The holder may demand payment from her without first seeking payment from other co-maker.

What is a Guarantor of Collection?

A collection guarantor is an accommodation party who is liable only if a judgment is rendered against a payor and the judgment is uncollectible against the debtor or is returned unsatisfied.