What Is Check Endorsement Without Recourse?

What Is Check Endorsement Without Recourse?

Check endorsement without recourse keeps a bank from withdrawing the amount of the check, as well as any fees, from a depositor's account even if the deposited check bounces for insufficient funds. The term "without recourse" transfers liability to the bank rather than the depositor.

It is unusual for a bank to accept a check that has the words "without recourse" in the endorsement section on the bank, along with the depositor's signature, because banks are often unwilling to accept that risk. This term applies to any financial instrument that could result in liability. Within the realm of litigation, the term "without recourse" keeps potential litigants for filing suit or obtaining any sort of relief.