Current-limit switches are virtually ubiquitous in system controls. They provide a safe means for regulating the current delivered to a load circuit. The switches allow the load current to increase to a programmed limit but no higher. Typically, the current limit is a function of the voltage across an external resistor, produced by the current from a fixed source internal to the switch IC. This voltage serves as the reference for an internal current-limiting amplifier.

Source : http://www.edn.com/article/CA47125.html