A qualified endorsement on such a negotiable instrument, by which the endorser protects himself or herself from liability to subsequent holders.
Latin: sans recours
This appears on a bill of exchange to indicate that the holder has no recourse to the person from whom it was acquired, if it is not paid. This term may be written on the face of the bill of exchange or as an endorsement.
If “Without Recourse/Sans Recours” does not appear on a bill of exchange, then the holder does have recourse to the drawer (or endorser) if the bill is dishonoured upon maturity.
Without recourse is a phrase that has several meanings.
When it comes to sales, “with recourse” is a legal term that means with subsequent liability, and “without recourse” means without subsequent liability. The sales agreement signed by the buyer and seller determines whether a sale is a recourse sale or a without recourse sale and thereby determines the respective rights and responsibilities of both parties.
Giving the lender no right to seek payment or seize assets in the event of non-payment from anyone other than the party specified in the debt contract (such as a special-purpose entity).
If the loans are sold without recourse, then the bank has no further potential liability with the loans sold. If the loans go bad, the buyer cannot ask the bank to make up the difference.
Without the lender having any right to seek payment or seize assets in the event of nonpayment from anyone other than the party (such as a special-purpose entity) specified in the debt contract.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March, 2024.
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