Vanderbilt Law Review


Robert D. Rowe

First Page



Recent legal battles in the lender-borrower arena have received widespread attention. The fact that these battles occur merits little surprise because borrowers often seek recourse against lenders when financial commitments go awry. Moreover, recent lender-borrower cases do not introduce any new legal theories. The outcome is the noteworthy feature of these cases. Borrowers increasingly are obtaining judgments against lenders. This Note examines recent lender-borrower cases from a contractual perspective, analyzing the application of traditional contract principles in the lender-borrower context. Part II of this Note contends that courts are trying to address three concerns in the lender-borrower context: maintenance of banking stability through enforcement of written contracts, avoidance of adhesion contracts, and provision of legal recourse to borrowers against abusive lending practices. Part III considers several state legislatures' attempts to deal with these concerns by amending their Statutes of Frauds. Finally, Part IV concludes that the state legislatures' use of the Statutes of Frauds better addresses the concerns of banking stability, adhesion contracts, and abusive lending practices than recent judicial efforts.