Verbal Agreement with Credit Union

keirsmith · Mar 9, 2004

My wife and I belong to a credit union (through her employer). We recently bought a house, and decided to renovate the kitchen. Our credit union verbally agreed that we would be able to get a line of credit, for $26,000 for this purpose. We went ahead and signed contracts with the builder for the work to begin. The CU are now saying that they will not honour the amount originally agreed, based on further investigation into our financial situation.

As we have already entered into a contract based on the information given by the CU, do we have any legal redress? Are we able to 'force' the CU to make good on their original promise?
The manager who originally agreed the amount, is not denying that she did so, if that is of any consequence?

Any help in this area would be most gratefully received, we're in a very tight spot as you may imagine.

Thanks

Keir

Michael Wechsler · Mar 27, 2004

You may be out of luck. I would doubt that the manager won't doubt that she said you would qualify for the loan but will probably say that it was subject to approval process. Why did you rush to renovate before you received the written confirmation from the CU? That was a mistake and I'm not sure that you have any redress since there doesn't seem to be a wrong, perhaps a misunderstanding by you as to the process. With regard to "justifiable reliance" on the CU manager's statement, I'm not sure that without a written agreement your reliance was completely justified. There are many problems, e.g. the statute of frauds, which would be difficult if not impossible for you to overcome the need for this agreement to be in a signed writing or falling within some recognized exception.

Originally posted by keirsmith
My wife and I belong to a credit union (through her employer). We recently bought a house, and decided to renovate the kitchen. Our credit union verbally agreed that we would be able to get a line of credit, for $26,000 for this purpose. We went ahead and signed contracts with the builder for the work to begin. The CU are now saying that they will not honour the amount originally agreed, based on further investigation into our financial situation.

As we have already entered into a contract based on the information given by the CU, do we have any legal redress? Are we able to 'force' the CU to make good on their original promise?
The manager who originally agreed the amount, is not denying that she did so, if that is of any consequence?

Any help in this area would be most gratefully received, we're in a very tight spot as you may imagine.

Thanks

Keir
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Scooter · Dec 10, 2004

Sam Goldwyn has the best quote on this--

An oral contract isn't worth the paper its written on.

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Verbal Agreement with Credit Union

keirsmith Law Topic Starter New Member

Michael Wechsler Administrator Staff Member

Scooter New Member

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