Legal Question in Business Law in California

I'll overlook the rule violation in naming a possible party and give you a very general answer.

In America, anyone can sue almost anyone else over the greatest or slightest of wrongs, and on very weak pretexts. The practical problem is whether you are sufficiently likely to WIN to make it worth the while to pay a filing fee, probably a lawyer too, and spend the necessary time to pursue your case. There is also the problem that really baseless suits can backfire, with a demand for defense attorney fees or a suit for malicious prosecution.

In your case, a suit against a bank for not sticking to an oral agreement does not look like one that would be easy to win, or one that you're likely to win even with a major, expensive battle waged by a team of lawyers. First, while oral agreements are generally enforceable, there is a law called the "statute of frauds" that requires certain agreements to be in writing, and these include agreements affecting an interest in real estate (which may include a loan modification or short sale) or in many cases, a loan exceeding $100,000.

Second, proof of the existence, and the terms, of the oral agreement is up to the plaintiff, and unless you have witnesses, it will be your word against theirs. When these cases go to trial, the bank's witnesses often will testify, "Yes, we agreed to do so-and-so for Mr. Plaintiff, but only upon condition that he __________ (and you can fill in the blank with any of a zillion things the bank might have inserted as a condition of doing the deal).

Third, the individual with whom you were dealing may not have had authority to commit the bank. Often, authority is legally based upon what a reasonable person would have believed; in other words, a bank "senior vice president-business lending" presumably has authority to commit the bank, and the bank therefore couldn't deny his authority; however, if the title is only "assistant vice presidentand branch manager," most people know that these are relative peons in bank hierarchy, and wouldn't have much authority.

The final problem is the issue of definiteness. For an agreement to be enforced, a court would want to be convinced that it was fairly complete and definite. For example, if the bank were agreeing to lend you $99,000 for a new business, the court in order to find that there was an enforceable agreement would want to be shown that the bank and the customer had agreed, not only that there would be a $99K loan, but also that the bank and the customer had agreed on the interest rate, the loan term, the collateral, and any preconditions to disbursement of the loan proceeds.

So, the short answer is "yes;" but the real world answer is that this is going to be real tough.

The short answer is yes, on then next question is can you prove it? Usually the banks record all their conversations so I would write them a letter demanding a copy of that conversation and that they take steps to preserve that recording.

Last question is it worth it? Depends on the facts which you didn't share with us so I can't answer that one.

Good luck and hope that helps

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