Limit commitment occurs when
A) collateral is required to get a loan.
B) one cannot borrow as much as necessary to conduct business.
C) one cannot be forced to repay a loan.
D) the bank can sell your loan to another bank.

Question

Quizplus · Accepted Answer

Limit commitment occurs when the borrower cannot be forced to repay a loan, meaning they have limited liability. This is often seen in partnerships or limited liability companies, where investors are not personally responsible for the debts of the company.

Limit Commitment Occurs When