Notice
16200 Community Court, North Hills in California-state
Please take notice:
When a lender violates trust, there can be legal consequences. Lenders have a duty to act in good faith and fair dealing in their relationship with borrowers, ensuring that their actions do not deceive, misrepresent, or abuse their power. Some typical causes of action for lender liability include breach of contract, breach of the implied covenant of good faith and fair dealing, and economic duress. Borrowers can assert claims based on a breach of a lender's fiduciary responsibilities if they have placed special trust or confidence in the lender. Lender liability claims can arise when a financial institution fails to honor a loan commitment, wrongfully declares a default, interferes with the borrower's activities, or breaches a fiduciary duty assumed towards the borrower. The legal theories of lender liability stem from contract, tort, common law, and statutes, with potential consequences including compensatory damages for breach of contract and breach of the covenant of good faith and fair dealing. If a lender breaches a loan contract or acts fraudulently, legal action can be taken against them.