|No Cause of Action for Alleged Breach of Oral Credit Agreement in Louisiana|
|Description||The Louisiana high court held that the state's Credit Agreement Act expressly precludes any cause of action based on an alleged oral promise to extend credit.|
|Topic||Negotiable Instruments and Credit|
|Key Words||Oral Credit Agreement; Breach of Contract|
|C A S E S U M M A R Y|
|Facts||Jusco Construction sought a $17.7 million loan from Bank of America. Testimony conflicted as to what happened during the application process. Jesco contends everything was approved and ready for signing and that it was told the loan was a "done deal." The bank contended that the appraisal work indicated that Jesco was worth less than claimed, so it refused to move forward. Jesco sued, contending that the credit had been promised and the promise had been breached. The federal court certified a question to the Louisiana high court as to the application of the Louisiana Credit Agreement Act in such a case.|
The Credit Agreement Act precludes all actions for damages by a borrower against a lender that arise from alleged oral credit agreement to lend money. Hence, Jesco has no cause of action against the bank.
|Citation||Jesco Construction Corp. v. Nationsbank Corp., 2002 WL 31399658 (--- So.2d ---, Sup. Ct., La., 2002)|
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