Definition of Without Recourse
The term “without recourse” has been defined in different ways. In financing particularly, it refers to the arrangement in which the dealer’s maximum possible liability is limited to warranties related to what the quality an installment contract holds.
Explanation of Without Recourse
Without recourse term also applies in the secondary market. The investor will not be indemnified for any losses by the seller of loans or securities. 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.