When I was in school, you could fail based on your exam score, your clinical evals, oral exam, or any combination of the three. Generally you could retake the exam once before you actually failed the whole rotation, but that wasn't universally true. Failing based on clinical evals usually only occurred with people who had already had other "difficulties" in school.
For us, everything was individualized, and at the discretion of the Dean and clerkship director. I know of at least one student who was forced to repeat all of third year due to failing two rotations.
My school was pretty notorious for letting people continue as long as they wanted; few people were kicked out, instead they just kept failing until they quit.