Legal Definitions - sans recours

Sans recours is a French legal term that translates to "without recourse." When used in a legal context, it means that a party to an agreement or transaction is released from any future liability or obligation to another party if a specific event or condition occurs. Essentially, it shifts the risk entirely to the recipient or the party accepting the item or agreement. The party accepting something "sans recours" cannot later seek a remedy, compensation, or enforcement from the original party if problems arise.

Here are some examples to illustrate this concept:

• Example 1: Endorsing a Promissory Note

  Imagine a small business owner, Alex, holds a promissory note from a client who owes him money. Alex needs immediate cash, so he sells this promissory note to a financial institution, a factoring company, for a slightly reduced amount. The factoring company agrees to buy the note sans recours. This means that if the client later defaults on the note and fails to pay the factoring company, the company cannot demand payment from Alex. Alex is completely free from any further financial obligation or liability related to that note once he sells it, as the risk of the client defaulting has been fully transferred to the factoring company.

• Example 2: Specific Clause in a Sales Contract

  A property owner, Ms. Chen, sells an old commercial building to a developer. During the inspection, a minor, disclosed structural issue is identified. The developer agrees to purchase the building despite this issue, and the sales contract includes a clause stating that the sale of the building, specifically regarding this known structural defect, is sans recours against Ms. Chen. If the structural issue later proves to be far more extensive and costly to repair than initially estimated, the developer cannot sue Ms. Chen for additional repair expenses; the risk associated with that specific defect was explicitly assumed by the developer at the time of purchase.

• Example 3: Endorsement on a Check

  Sarah receives a check from a customer for services rendered. Instead of depositing it, she needs to use it to pay her supplier, David. Sarah endorses the check over to David by writing "Pay to David, sans recours" above her signature on the back. By doing this, Sarah is transferring the check to David but explicitly stating that she will not be responsible if the check bounces (e.g., if the customer's bank account has insufficient funds). If the check is later dishonored by the bank, David, having accepted the check with this endorsement, cannot come back to Sarah to demand payment; he must pursue the original customer for the funds.