Without Recourse


DEFINITION of 'Without Recourse'

This phrase has several meanings. In a general sense, when the buyer of a promissory note or other negotiable instrument assumes the risk of default. Without recourse can also refer to a financing arrangement where the dealer's maximum possible liability is limited to warranties pertaining to the quality of an installment contract.

BREAKING DOWN 'Without Recourse'

Another meaning of this term applies in the secondary market. In this case, the seller of loans or securities is no longer required to indemnify the investor for any losses suffered. Without recourse also applies to asset-based lending agreements where the lender is prohibited from charging back unpaid invoices caused by the debtor's inability to pay.

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  4. Non-Recourse Debt

    A type of loan that is secured by collateral, which is usually ...
  5. Non-Recourse Finance

    A loan where the lending bank is only entitled to repayment from ...
  6. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
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