When any party to a legal contract does not fulfill any aspect of that agreement, the result is known as a breach of contract. When a party breaches a loan contract, the resulting consequences affect both parties to that contract.
Every loan contract contains language pertaining to breaching that agreement, as well as specifying the rights of the non-breaching party. Sometimes the agreements contain an arbitration clause. The arbitration clause requires the parties to try and resolve differences through arbitration. Should the arbitration not achieve satisfactory results, the party may pursue a legal remedy.
Full disclosure in a loan agreement is required. The terms, conditions, and fees must be clearly delineated in the loan documentation, including:
- Names of the parties
- Loan amount
- Interest rate
- Expiration date
- Details of any special considerations (e.g. fees)
By definition, loan contracts include an implied covenant of dealing fairly and in good faith. The determination of breach of loan commitments, however, is entirely based upon the written contract, not upon personal relationships or handshakes. In most cases, the loan documents “over disclose” rather than “under disclose.” This is why loan documents tend to be lengthy.
If you would like more information about breach of loan agreements, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.
The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation in all collection matters. We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance with your collection matters, please contact us at (480) 584-5660.