A number of previous approaches to linguistic borrowing and contact phenomena in general have concluded that there are no formal boundaries whatsoever to the kinds of material that can pass from one language into another. At the same time, various hierarchies illustrate that some things are indeed more likely to be borrowed than others. Linguistic Borrowing in Bilingual Contexts addresses both, by examining claims of no absolute limits and synthesizing various hierarchies. It observes that all contact phenomena are systematic, and borrowing is no exception. Regarding forms, the determining factors lie in the nature of the morphological systems in contact and how they relate to one another. Two principles are proposed to determine the nature of the systematicity and interaction: the Principle of System Compatibility (PSC), and its corollary, the Principle of System Incompatibility (PSI). Together, these principles provide a consistent account of the possibilities and limits to borrowing.