Also known as: remedies over · right of remedy over · reimbursement right · recourse
Written by attorneys · grounded in primary & secondary sources — see below
A right of recourse against a third party who bears ultimate responsibility for a loss or obligation. The right arises from indemnification or subrogation and permits the party held liable in the first instance to shift the burden to the ultimately responsible party.
Rising Sun Electronics sold circuit boards to Rocky Mountain Mining. A patent holder sued Rocky Mountain for infringement based on the boards. Rocky Mountain received notice of the suit but failed to notify Rising Sun within a reasonable time. Because Rocky Mountain omitted the required notice, it lost any remedy over against Rising Sun for the liability established in the litigation.
Rhapsody Entertainment granted a security interest in its recording equipment to Redwood Bank. A guarantor paid the bank after default. The guarantor then exercised its remedy over against Rhapsody to recover the amount paid, shifting the ultimate burden to the primary obligor.
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Roberto Reyes guaranteed a loan secured by equipment owned by Renata Russo. When the primary debtor defaulted, the secured party enforced the collateral. Roberto retained a right of recourse against Renata for any amount the secured party collected from him.
Redwood Bank held a security interest in accounts receivable of Rhapsody Entertainment. After default the bank collected from account debtors through an agency. Because the collection efforts were commercially reasonable, the bank remained entitled to charge back uncollected amounts to Rhapsody as its remedy over.
Renee Rogers, owner of a vessel, faced an admiralty claim for cargo damage. She impleaded the cargo handler who had caused the loss. The third-party claim allowed Renee to obtain remedy over against the handler for any liability she ultimately owed the original plaintiff.
Rajesh Rao sold mortgaged property to Rebecca Ross. Rebecca assumed the mortgage obligation. When the mortgagee later sought payment from Rajesh after default, Rajesh retained a remedy over against Rebecca to compel performance of the assumed debt.
The buyer must notify the seller within a reasonable time after receiving notice of the litigation. Failure to give timely notice bars the buyer from any remedy over for liability established by the litigation.
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A right of recourse permits the party held liable in the first instance to shift the burden to a third party who is ultimately responsible. It arises from indemnification or subrogation rather than from the original transaction between the claimant and the primary obligor.
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A secured party that collects from account debtors in a commercially reasonable manner may charge back uncollected amounts or exercise full or limited recourse against the debtor or a secondary obligor.
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Yes. When the transferee assumes the mortgage obligation, the original mortgagor who remains personally liable may compel the transferee to perform so that the transferor will not have to discharge the debt.
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…Although he agrees that the Due Process Clause has substantive content, Mr. Justice White in dissent expresses the fear that our recourse to history and tradition will "broaden enormously the horizons of the Clause." Post , at 549-550. To the contrary, an approach grounded in history imposes limits on the judiciary that are…