Take It Or Leave It

The Tennessee Court of Appeals recently found that a "take or leave it offer" extended by a lender to a borrower experiencing financial difficulty was not duress.  SK Food Corp., et al. v. FirstBank, No. M2016-01019-COA-R3-CV, 2017 WL 776116 (Tenn. Ct. App. Feb. 28, 2017).

Borrowers met with Lender about refinancing an existing loan with Lender. Id. at *1.  The parties executed a commitment letter specifying that the lender's security interest would be a "first lien deed of trust" and requiring a nonrefundable commitment fee from borrowers. Id.  The loan ultimately did not close due to an existing lien on the security pledged by the Borrowers. Id. The Borrowers filed suit, seeking return of the commitment fee. Id.  The Borrowers alleged, in part, that the commitment fee should be returned because the commitment letter was executed under duress. Id. at *3.  The trial court granted summary judgment for the Lender.  Id.