How Do You Spell ACCOMMODATION NOTE?

Pronunciation: [ɐkˌɒmədˈe͡ɪʃən nˈə͡ʊt] (IPA)

The word "accommodation note" is spelled with three syllables: /əˌkɒməˈdeɪʃən/ note. The first syllable, /əˌkɒm/, is pronounced with a schwa sound followed by the consonant blend /kɒm/. The second syllable, /əˈdeɪʃən/, begins with a schwa sound and is followed by the diphthong /eɪ/ and the consonant blend /ʃən/. The spelling of this word is based on its Latin root, accommodare, meaning "to make fit or suitable," and the word "note" refers to a written promise to pay a sum of money.

ACCOMMODATION NOTE Meaning and Definition

1. An accommodation note is a legal document that serves as a written acknowledgment of debt or agreement between two parties, typically a debtor and a creditor. It is an enforceable promissory note that outlines the terms and conditions of a loan or a financial arrangement. The accommodation note is generally used when a borrower requires a guarantor to secure the debt or when a third party agrees to assume responsibility for the loan if the original debtor fails to fulfill his obligations.

   The accommodation note ensures that the lender has an additional party on whom they can rely for the repayment of the debt in case the primary debtor defaults. This extra layer of security reassures the lender and often helps the borrower secure more favorable terms such as a lower interest rate or a larger loan amount. The accommodation note is legally binding and holds both the borrower and the accommodating party accountable for the repayment of the debt.

   In summary, an accommodation note is a written agreement that provides a guarantee for a loan or financial arrangement, providing security for the lender. It is a legal document that outlines the terms and conditions of the debt and ensures that both the borrower and the accommodating party are responsible for repaying the debt if the borrower defaults.

Etymology of ACCOMMODATION NOTE

The term "accommodation note" comes from the verb "accommodate", which has Latin roots. The word "accommodate" originally comes from the Latin word "accommodatus", which is the past participle of "accommodare". "Accommodare" is a combination of two Latin words: "ad" meaning "to" or "towards", and "commodus" meaning "measure" or "fitting". Therefore, "accommodate" originally meant "to measure or fit something to a particular need or purpose".

In the context of a financial instrument, an "accommodation note" refers to a promissory note signed by one party (accommodation party) for the benefit of another party (accommodated party). The accommodation party lends their creditworthiness to help the accommodated party secure a loan or financial transaction.