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Without Recourse

Definition - What does Without Recourse mean?

Without recourse is a legal appropriation wherein the signer of a contract has no legal ability to sue the writer or the subject within for how things turn out. It is commonly attached to financial investments because there is always a level of risk to an investment. When an investor buys stock in a company, the company must be able to limit their liablity to the buyer if the price decreases contrary to the investor's expectations.

Justipedia explains Without Recourse

The legal differentiation is made due to the fact that sometimes people can take legal action if a matter or investment does not conclude as expected and there are contractual terms in place which dictate the matter. For example, a shareholder's agreement will stipulate a buyout figure that is tied to the price of stock and in most cases clarification will be made which ties the buyer to an amount rather than allowing the seller to receive less than the expected amount. There will be a minimum amount stated and potentially no upper amount.

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