Lenders Can Pull Financing if Borrower Cannot Show It Is Ready, Willing and Able to Perform All Conditions Required for Loan

Boise Tower Assocs. LLC v. Wash. Capital Joint Master Trust, 2007 WL 1035158 (D. Idaho Apr. 2, 2007)

In this case, the federal court sitting in Boise applied Washington law in delivering a win for a lender who refused to lend to the plaintiff developer.  The lender agreed to provide financing, but only if four conditions precedent were met, including an agreement to use union labor.  The developer agreed, but later took steps to have his contractor use non-union labor.  The lender refused to loan, prompting a lawsuit by the developer.  The court held that the lender was entitled to refuse because the developer had not demonstrated that it was willing and able to perform the conditions precedent.  A party, here the developer, that claims to have been damaged by a repudiation must show that it was ready, willing and able to perform its obligations under the contract before the repudiation, and that it would have rendered the agreed performance if the defendant had not repudiated.  The developer could not do so here, so the court excused the lender from making the loan.

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