Source: Warhammer Fantasy: 8th Edition

Nowhere to Run, Nowhere To Hide
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A character cannot refuse a challenge if his model cannot be placed so that he is not in base contact with an enemy model – he can't evade his opponent and so must fight for his life. This most commonly happens if a lone character is the subject of a challenge, or if his unit is small and engaged on all fronts, so that every model in the unit is in base contact with an enemy.

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