In my latest Daily Journal of Commerce Construction column, I discuss the issue of whether a contractor may sue a lender. This occasionally arises when a project’s owner runs into trouble and the construction lender stops funding. The argument that is occasionally advanced is that the lender knew the contractor had started work and, if it did not intend to advance the loan funds, it should have notified the contractor immediately, rather than remaining silent while the contractor proceeded. The contractor can legitimately point out in these circumstances that it was unfair of the lender to stand by silently while the contractor added value to the lender’s collateral.

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