Bank's Good Faith in the Lender-Borrower Relationship
Proceedings of Northeast Business and Economic Conference, p. 42, 1987
2 Pages Posted: 4 May 2010
Date Written: May 4, 1987
The author describes the newly created fiduciary relationship of a lender-borrower in this case, between a bank and its lender. Noting that this involves a secured transaction, courts recognize the special relationship between the parties and in order to encourage high standards of good faith and fair dealing, they imply into the transaction this fiduciary duty. The author cites several cases as well as authority in support of this rule, noting that there should be appropriate limits to liability as well.
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