non-recourse

Situation where an obligation is entered into, or a transaction is conducted, under the stipulation that it is without recourse to the borrower, endorser, or seller. That is, he or she is not personally liable (beyond the specific collateral pledged, if any) to the lender, holder, or buyer for any default, loss, or defect. Presence or absence of recourse determines whether a sale is actually a sale for accounting purposes (hence non-taxable) or is a transfer of ownership (hence taxable). See also recourse, sans recourse and with recourse.