While many assume that the borrower has most of the liability whenever there’s a transfer of funds, the borrower can also hold the lender liable to various issues. These can be problematic, and it’s crucial to have civil litigation services to ensure things work out smoothly. Here’s what you need to be aware of:
Understanding Lender Liability Lawsuits
Lender liability lawsuits focus on two branches of law: Contract law and tort law. Contract claims are simply the breach of terms of the contract or any agreement between the lender and the other party. Tort claims for lender liability defense pose that due to any negligence, fraud, fraudulent concealment, or breach of the implied covenant of good faith, some form of financial damage occurs for the borrower.
Tort Cases
For tort cases, the borrower claims that the initial contract cannot be enforced due to any malfeasance by the lender. A common example would be if the lender agrees to any specific agreement between the two parties and then fails to fulfill it can lead to a lender liability suit against the lender.
Litigating Lender Liability Lawsuits
The first course of action for lenders is to ensure that there’s a forbearance agreement as a contingency to negotiating a settlement signed between the two parties. Generally, these are helpful as the borrower can’t file any action against the lender in a court of law. There is still some exception where a jury trial is valid, so it’s by no means a complete deterrent to all problems.
The Course of Action After a Lawsuit Has Been Filed
Once the borrower files a lender liability suit, the lender should ideally work with a lender liability defense lawyer to work on the case. An attorney will recommend that you preserve all documents regarding the borrower and collect any and all evidence for the case while going over all agreements to find out if an arbitration clause even exists.
Responding to a Lender Liability Lawsuit
Once it’s established that there are no grounds for arbitration, it’s ideal to find out how the case can be dismissed. For tort claims, many lenders approach the case with the argument that the lender owed the borrower fulfilled their end of the contract that the borrower agreed to, having no responsibility to fulfill the claim the borrower is presenting. For cases of fraud or fraud concealment, these aren’t applicable.
Some cases can also be put on third parties contributing to any damages for the borrower, protecting the lender from harm.
The various issues of tort claims, contract breach claims, and other dealings of lender liability defense can be fairly complicated. Having a game plan with the help of a litigation lawyer can make a huge difference. At McLeskey Law Offices, we are a litigation law and creditors rights law firm based in Columbus, Ohio, experienced in civil litigation and probate law, helping out businesses dealing with various issues. Reach out to us today if you seek a litigation lawyer.