Limited recourse

Of a contract, that the obligor’s obligations under it are limited to a defined pool of assets. Usually the limitation of a claim in this way goes hand-in-hand with a security interest over the defined pool of assets.

Security and limited recourse are fundamental structural aspects of contracts with special purpose vehicles and investment funds, so if you feel the urge to challenge these contracts, do yourself and everyone else on the deal a favour: save your breath.

See also

• Bankruptcy remoteness